What the numbers tell us about our 20 Protect & Burns

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It has now been a little over a year since our first Protect & Burn in May 2020, when we burnt 97,000 CHSB. We have now run 20 burns, valued at $6.8 million, and at the time of writing we have over $500,000 in the burn pool.

Now we find ourselves in a very different market environment to when we ran our first burn, raising the question - how have our burns influenced the price of CHSB?

Some background on the Protect & Burn mechanism

Every month we add 20% of the revenues made from fees in the SwissBorg app to our Protect & Burn balance. 

These fees are generated from exchanges, as well as from the yield earned in our Smart Yield wallets, meaning the more users we have in the app, and the more active they are, the more fees will be generated. Therefore, the larger our community, the more power we have to protect the price of CHSB.

When CHSB’s price moves into a bearish zone, we place orders to buy back tokens from the market. These tokens are then burnt, permanently reducing the total supply of tokens.

While the Protect & Burn mechanism reduces supply, our Premium account benefits, CHSB Yield Program and the growing size of our community are all factors that increase the demand for our token, which should lead to price appreciation in the long term.

How is Protect & Burn different from buyback and burn?

What makes Protect & Burn different from most buyback and burn programs is that traditional token burning programs accumulate tokens and initiate burning according to a publicly shared schedule. This means short-term speculators can game the system by purchasing tokens before the buyback and selling them immediately after once the price has increased. This doesn’t provide any real benefit to loyal token holders.

At SwissBorg, because we only place orders when the price of CHSB enters a bearish zone, it’s more difficult for speculators to predict when this will take place to take advantage of short-term price volatility. This acts as an incentive to continue to hold CHSB as the Protect & Burn balance accumulates, as well as rewarding long-term CHSB holders as their investment is protected over time.

You can see each time we initiated a protect and burn in the chart below:

For real-time information, remember to check the CHSB overview page, which shares the latest information about the SwissBorg token, including price, the number of CHSB staked, the number of CHSB in the CHSB Yield Program, the Protect & Burn pool, and a list of all burn transactions.

What were the results of 20 Protect & Burns?

The main element people consider when determining the success of a token burning program is the token’s price - has it increased or held its value over time?

First, let’s look at CHSB’s price. If we review the historical price chart, CHSB’s price was $0.02 when we had our first burn in May 2020, and at the time of writing it is currently $0.50, an increase of 2,500%! Admittedly, the token has fallen from its all-time high of $1.65, however, this is at a time when the crypto market as a whole has fallen, so this isn’t reflective of CHSB in particular.

Second, our data team analysed CHSB’s price action following each of our 20 burns and we found that in 60% of burns, the price of CHSB was higher in the week following the burn than before the burn. In 10% of burns, the difference was negligible, while the most recent one saw a significant price drop, but this was indicative of the market environment.

The future is bright

While the crypto market has some work to do to recover all-time highs from earlier in 2021, we believe the future for cryptos and CHSB is bright. 

On our side, our community of SwissBorg app users is approaching 420,000 and the net flow of funds into the app is positive. Our users are making 13,000+ exchanges a day and over 100,000 of them have yield wallets, which allow them to earn a passive return on their holdings, regardless of the market environment.

And when it comes to the Protect & Burn mechanism, this is getting stronger all the time due to the growth of our community and use of the SwissBorg app. Keep up to date with the latest Protect & Burn numbers here.