Yes, you’re correct! In Signum’s updated consensus, they introduced a burning mechanism as part of the BSIP-18 proposal, which was implemented to enhance the sustainability and long-term value of the network.
The burning mechanism works by permanently removing a portion of SIGNA from circulation under certain circumstances, such as:
1. Transaction Fees: A part of the transaction fees is burned. This helps to reduce the total supply over time.
2. Special Features or Services: Burning can occur when using specific features or services on the network, like asset creation or token usage.
3. Smart Contract Execution: Some smart contracts may include burning of SIGNA as part of their execution to maintain balance between resource usage and reward mechanisms.
Although the total supply cap remains at 2,097,152,000 SIGNA, the circulating supply can decrease over time due to these burn events, which could potentially make SIGNA more scarce and valuable in the long term. This burning mechanism introduces a deflationary aspect to the cryptocurrency.
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