Significance of Decreasing APY Rewards on the price of the Biophilia token?
Last updated
Last updated
The Biophilia Annual Percentage Yield (APY) functions similarly to the interest you earn for holding the Biophilia token (BPL). It decreases by 10% each year from its initial rate of 70%, with a base or lowest APY of 10%. This approach is somewhat comparable to how Bitcoin operates with its "halving" events.
You might be wondering if this reduction in rewards is necessary. Well, the answer is a resounding "yes"! Let's look at Bitcoin's history for some valuable insights. When Bitcoin experienced its halving events, it initially created some uncertainties and fluctuations in its value. However, these fluctuations were followed by substantial increases in value. For instance, in 2020, Bitcoin's value surged by 40%, and from its all-time low just before the halving event, it increased by a remarkable 85%. These deflationary occurrences have historically marked the beginning of Bitcoin's most significant bullish runs, although not without initial periods of decline. According to Reuters, from 2012 to 2014, Bitcoin's value increased by a whopping 10,000%, and from mid-2016 to the end of 2017, it grew by nearly 2,500%.
In addition to Bitcoin, the Biophilia decrease of 10% APY annually also plays a vital role in driving up the price of the coin. This happens because, with each reduction in APY, the number of Biophilia tokens in circulation decreases, leading to a reduced supply or a "shortage" of tokens. Consequently, the demand for Biophilia tokens increases, resulting in a notable appreciation in their value.
In essence, just like Bitcoin, we anticipate that the value of the Biophilia token (BPL) will appreciate over time. This trend is supported by historical data and is illustrated in the chart below. By implementing this approach, Biophilia aims to ensure the long-term sustainability and value growth of its token, aligning with its vision of merging innovation with nature's wisdom in the world of cryptocurrencies.
Just like Bitcoin, we expect that the value of $BPL token will appreciates on its value over time. Please see chart below as reference.