Source: Cointelegraph
Original: “Nearly 60% Destroyed in Five Years! How GateToken (GT) Shapes Scarcity Value Through Continuous Reduction?”

On May 14, the on-chain destruction of Gate's platform token GateToken (GT) was officially completed for the first quarter of this year. According to the official announcement, approximately 1.54 million tokens were destroyed, with a destruction value exceeding $33.84 million. As of now, a total of approximately 178.63 million tokens have been destroyed, with a cumulative destruction value of about $3.92 billion based on current prices, significantly reducing the total token supply from the initial 300 million by nearly 60%.

GT's market capitalization exceeds $2.6 billion, firmly ranking among the top 50 cryptocurrencies globally.

The destruction mechanism for GT began in 2019, initially reducing circulating supply through manual buybacks and token destruction. With technological advancements, Gate plans to introduce an automatic destruction mechanism that will dynamically destroy a portion of tokens based on on-chain activities, achieving a more efficient deflationary strategy. The implementation of this mechanism has reduced GT's total supply from the initial 300 million to the current approximately 120 million, significantly enhancing the token's scarcity.

Driven by the continuous token destruction mechanism and the expansion of the platform's ecosystem, GT has performed excellently in 2025. In January of this year, the price of GT reached a historic high of $25.96, an increase of over 300% since the beginning of the year. As of May 20, the price of GT stabilized around $22. Meanwhile, GT's market capitalization has grown from less than $1 billion at the beginning of 2024 to the current $2.6 billion, successfully entering the top 50 in global cryptocurrency market capitalization, ranking 39th.

The prosperity of the GT ecosystem boosts market capitalization potential, with expected growth space compared to BNB.

However, despite the significant rise in GT's market capitalization, there remains a valuation gap compared to the industry-leading Binance Coin (BNB).

Market analysis indicates that GT's long-term growth potential still exists, especially as the Gate platform continues to expand its ecosystem and user base.

Rapid Growth in User Numbers and Trading Volume

According to Gate's 2024 annual report, the total number of platform users has surpassed 20 million, an increase of over 50% from the previous year. During the same period, trading volume reached $3.8 trillion, a year-on-year increase of 120%, with spot trading volume exceeding $1.8 trillion and contract trading volume reaching $2 trillion. This growth reflects Gate's continuous expansion in the global market and the attractiveness of its products.

Building a Diversified Ecosystem

In 2024, Gate launched 873 new tokens, of which 437 were launched for the first time on the network, providing users with diverse investment options. Additionally, the platform continues to introduce innovative features through the Gate Startup program, with airdrops valued at nearly $30 million and a cumulative airdrop value exceeding $120 million. These initiatives not only enrich the platform's ecosystem but also enhance user engagement and loyalty.

Strategic Partnerships and Enhanced Brand Influence

Gate has established strategic partnerships with well-known brands in various fields, such as its collaboration with Inter Milan Football Club, further expanding its influence in the global market. Additionally, the platform actively participates in global charitable activities and blockchain education, demonstrating its commitment to social responsibility.

Changelly predicts that this year, GT's price will range between $25.88 and $30.97, with an average trading price of approximately $26.72. This indicates about a 23% upside potential compared to the current trading price.

Token Destruction Mechanism Comparison: GT, BGB, and BNB

| Project | GateToken (GT) | Bitget Token (BGB) | Binance Coin (BNB) | |---------|----------------|---------------------|---------------------| | Total Issuance | 300 million (initial) | 2 billion (initial) | 200 million (initial) | | Quantity Destroyed | Approximately 178.6 million (as of May 2025) | Approximately 120 million (as of April 2025) | Approximately 1.77 million BNB (as of November 2024) | | Destruction Ratio | Approximately 59.5% | 40% (initial destruction) + approximately 3% (quarterly destruction) | Approximately 88.5% (including automatic destruction and buybacks) | | Destruction Mechanism | Manual buyback + automatic destruction (driven by on-chain activities) | Initial destruction + 20% profit buyback destruction each quarter | Automatic destruction (BEP95) + quarterly destruction (based on block generation quantity) | | Destruction Transparency | High (on-chain verifiable) | High (on-chain verifiable) | High (on-chain verifiable) |

Token destruction: A deflationary strategy and value management tool in the cryptocurrency ecosystem

Token burn refers to the permanent removal of a certain number of cryptocurrency tokens from circulation, making them unusable or tradable again. This process is typically achieved by sending tokens to an inaccessible "black hole address," which has no private key, ensuring that the tokens cannot be retrieved or circulated again, and the act of destruction is also irreversible.

In general, the main significance of token destruction lies in:

By reducing the supply of tokens in the market, token destruction helps control inflation. Under the influence of supply and demand, a decrease in supply while demand remains unchanged or increases may lead to a rise in token prices, thereby enhancing the asset value for holders.

Token destruction can be part of a project's economic model, used in incentive mechanisms, fee structures, and more. For example, some projects allocate a portion of transaction fees for buybacks and token destruction to incentivize user participation and maintain the healthy operation of the ecosystem.

Regular token destruction plans demonstrate the project team's commitment to the long-term development of the ecosystem, helping to enhance investor confidence. This indicates that the project team is dedicated to maintaining the value of the tokens and the stability of the ecosystem.

Summary:

Token destruction, as a core means of the platform token's deflationary model, essentially enhances token scarcity by reducing market circulation, thereby increasing its value support. However, meaningful destruction must be based on real business growth and profit return. Only when the destruction mechanism is closely tied to the platform ecosystem can a positive cycle of token value and platform development be achieved, avoiding becoming a tool for short-term speculation.

Related: From Gate.io to Gate.com: The Ambition Behind a Brand Upgrade in the Crypto Empire

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