Despite a token-burning event that removed 1.69 trillion BONK tokens, worth over $51 million, from circulation, the dog-themed memecoin Bonk failed to break out of a broader crypto slump.

In late November, the team behind the Solana-based memecoin Bonk proposed burning 1 trillion tokens under a plan called “BURNmas.” The plan involved burning 1,000 BONK for every X post with the #LetsBONK hashtag and 10,000 BONK for every new follower on Instagram and TikTok. BURNmas was initially scheduled for December 25.

However, it exceeded the target, and BonkDAO members voted in favor of an updated proposal to burn 1.69 trillion BONK tokens on December 26 at 5:40 pm UTC.

This represents 1.85% of the 90.97 trillion BONK tokens currently in circulation, down from 100 trillion, according to CoinGecko data.

BONK Price Declines

Token burning is a common strategy to increase token prices by creating a more favorable supply and demand dynamic.

However, despite this strategy, the token has failed to replicate the success it saw from the burning of 100 billion BONK tokens on November 13. During that period, the token price increased by 56%, reaching a new all-time high market cap of $4.38 billion within a week.

Since the December 26 burning event, the token has decreased by 7.2%, with its market cap falling to $2.3 billion. This has occurred amid a broader market downturn.

While the reason for the sell-off is unclear, some Bonk enthusiasts expressed frustration with the Bonk team for failing to execute the burn on Christmas Day as promised.

Hours before the burn event on December 26, X user BestBets told Bonk core contributor Nom:

“The price continues to drop because you guys didn’t keep your word and didn’t communicate well.”

BestBets added, “You will lose a lot of progress and coin holders by lying to the community.”

X user PootieCoin commented, “I’m losing trust.”

Despite the price drop, BONK remains the fourth-largest memecoin in the growing $105 billion market, trailing only Dogecoin, Shiba Inu, and PEPE, according to CoinGecko data.

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Designed for reasonable purposes, the “Permanent Delegate” feature allowed for access to be revoked or token retrieval from inadvertent transmission. But the program also allows unscrupulous actors to burn or move tokens without the user’s awareness, therefore facilitating frauds. One such fraud saw a consumer buying a token named “RED,” just to have the fraudster burn it in a matter of seconds.

Scammers have discovered original ways of using this extension. Sometimes they only want to bring anarchy, while other times they want to control the supply of the token. Scammers may pretend to preserve or boost the price of the remaining tokens by burning tokens, therefore assuring they benefit from even modest-sized frauds. Slorg observed that burning tokens from many victims allowed some fraudsters to generate thousands of dollars a week.

Experts in security, notably Peck Shield and Beosin, have noted that con artists might be focusing on the tokenomics of certain cryptocurrencies, therefore altering the supply chain for their own benefit. Scammers may create a false scarcity by burning tokens owned by others, hence perhaps driving values on DeFi platforms linked to these tokens to rise.

Reacting to this fraud, websites like Jupiter and RugCheck have created tools to detect whether a token’s “Permanent Delegate” extension is turned on. Slorg advised consumers, particularly with younger tokens that could have such latent powers, to be careful and perform due diligence before completing any transactions.

The fraud draws attention to the dangers of engaging with strange tokens in the ever changing crypto scene. Users should be especially careful to guard their holdings from such harmful behaviors when new token functionalities develop.

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