Buy Out and Burn: Is It a Tokenomic Mechanism to Boost the Token?

The concept of Buy Out and Burn (BnB) is everywhere now. Crypto investors see it constantly. It seems that tokens with this mechanism grow a lot. Let's see what is behind it.

1. What is Buy Out and Burn?

Basically, a project buys out its own tokens and destroys them. It sends them to "dead" wallets. 🔥

They use their income for this. Or their reserves.

They didn't invent anything new here. It's like what traditional companies do:

• Buy out: more liquidity, more activity 📈
• Burned: fewer tokens, less inflation, more security 🛡️

There are two variants:

• Buy out and Save: to use later
• Buy Out and Burn: total destruction, less supply 🌋

2. Does the price really go up?

Not always. It depends on the real money behind it.

If they generate real income and use it to burn tokens, then yes. Fewer tokens = more value. Basic logic. 🚀

But sometimes it's a trick. They use reserves. It doesn't last.

In reality, three things matter:

• Solid business
• Trust
• Real demand

It's somewhat complicated, not as simple as it seems.

3. Real examples

3.1 Those who won

Hyperliquid ($HYPE)

• Use up to 100% of your fees ( like $600M/year ) for buy out
• They don't do it automatically. They are smart.
• Result: +300% in 2024. Not bad at all. 🌕

3.2 Those who lost

Messari data that is somewhat concerning:

• $RAY: Spent $175.8M → Now worth $118.8M (−32%)
• $GMX: $12.42M → Now $7.5M (−39%)
• $GNS: $7.9M → Now $4.6M (−41%)
• $SNX: The worst. Spent $562K → Remained at $234K (−58%) 📉

3.3 Why did they fail?

They bought out expensively. Simple.

Automatic buy outs. Bad idea.

And they represented a little of the total value.

4. Keys for it to work

4.1 Real growth

• Some grow because they have real users
• Others fall because... they have nothing
• Always verify actual income. 💹

4.2 Buy outs with brain

• Those who failed: buy out at high prices, automatically
• $HYPE: they let people decide = +300%
• Some only burn when there are surpluses. It seems to work better.

4.3 Trust

• Good teams + strong communities = good signal 🤝
• Doubtful teams... you know
• Sentiment matters a lot

It seems that in 2025, the crypto community has changed quite a bit. Figures like Vitalik and CZ have a significant influence on how these mechanisms are perceived.

4.4 Value Distribution

Not everything has to be burning:

• Some buy out stables/ETH and distribute it. Quite smart.
• Others burned a lot and still fell.

The important thing: real growth, smart buy outs, reliable teams. No flashy ads. 💯

5. Conclusion

BnB can work short term. It generates excitement. But it does not guarantee lasting value. Look beyond the "burned" ads. 🔍

In 2025, an interesting correlation is noted between positive sentiment and the prices of Bitcoin, Ethereum, and Solana. Volumes rise after messages from important influencers. It is not entirely clear whether it is a cause or a consequence.