The Fire (XFR): A Fiery Crypto Experiment or a Fizzling Financial Illusion?
Inflation has been described in a variety of ways over the past century. One thing that no one has claimed is that inflation is good – it’s almost universally considered bad. The buying power of currency decreases over time.
It’s just not good.
Anyway, there have been solutions proposed. None of the solutions have caught on in any meaningful way, though.
One solution that has been proposed is a cryptocurrency called The Fire (XFR). This article will cover everything you need to know about The Fire (XFR).
What is The Fire?
The Fire is a cryptocurrency project on the Binance Smart Chain. The project itself issues a BEP-20 token named Fire (XFR). This token has some of the wackiest tokenomics we have ever seen of a cryptocurrency.
100 trillion XFR tokens were pre-mined at the start of the project. The goal is to have 100 Fire tokens in 12 years.
That means the team will burn over 99 trillion Fire tokens in the next 12 years.
Of course, this means that tokens held in wallets will be burned. But the burn will be proportional across all wallets, so the total supply will decrease. The exact percent is around 0.6% per day.
In other words, the number of tokens in your wallet will decrease. The actual value of the tokens should stay the same because the total supply is reduced proportionally.
This is much different than other deflationary cryptocurrencies. Those cryptocurrencies typically charge a percent for each transaction.
That’s not really deflationary, though. It’s just charging a fee to use the token, which only hampers the growth of the cryptocurrency.
Those cryptocurrencies all end up failing in the long term. No one wants to pay 5% to send tokens to another wallet.
With all that said, we have some major issues with The Fire surrounding the economics of this token. The next section will cover these problems.
The Problems with The Fire
The Fire has some major problems with it. These problems will, in our opinion, cause the failure of the project.
These problems are listed in no particular order.
Reducing Supply Doesn’t Make The Price Go Up
The first issue we have with The Fire is that the founding team seems to have this idea that reducing token supply is the sole factor in increasing the price.
Actually, we doubt the team actually believes this because the person that wrote the whitepaper is very intelligent.
Anyway, the problem is that reducing supply does not mean the price of the token will go up. Yes, the nominal price of the token will go up. However, will the real value of the tokens increase?
It depends. The real value will increase if there is more demand for the token. Reducing supply does not change anything if there’s no demand.
It’s a little ridiculous that the whitepaper does not touch on this.
That is, in our opinion, the biggest problem with this cryptocurrency.
It’s on Binance Smart Chain
Another problem we have with The Fire is that the project is built on the Binance Smart Chain.
Binance Smart Chain itself is a perfectly fine blockchain. Sadly, it has become the go-to blockchain for scammers to launch a project. The reason is pretty simple – the fees are low.
Unfortunately, most serious investors do not take projects on the Binance Smart Chain seriously. Industry experts often refer to it as the Binance Scam Chain because there are so many scams on the blockchain.
It really does seem that every project on Binance Smart Chain is a scam.
Now, we are not saying The Fire is a scam, but it’s difficult to view it as anything else than that when 99% of the projects on that blockchain are scams.
We Can’t Find The Economics PhD That Advises This Projects
The Fire claims an economist designed the tokenomics of the project. They don’t list any of the economists that worked on the project.
There is a person named Simon Ford listed as the economics advisor, though. The Fire claims that Ford has a PhD in Economics from the London School of Economics. However, there is no LinkedIn profile available for Dr. Ford nor can we find any information about an economics PhD from the London School of Economics named Simon Ford.
It’s very strange. They claim the project was conceived by expert economists, so we would like to see these economists justifying this project.
Is The Fire (XFR) a Good Investment?
We would not consider XFR a good investment. The tokenomics of this token are a little gimmicky for our taste.
More importantly, there’s no actual use case for the token.
The team literally advertises this token as a token that only goes up.
If the extent of your project is, “The token price goes up because we figured out a way to game the system,” then that’s a really bad sign for your project.
To further this point, the token only has a market cap of $80,000 and the 24 hour trading volume is under $20.
We are apparently not the only ones that think this project is a bad investment.
To summarize, The Fire is a gimmicky token that does not offer anything technologically unique or innovative. It’s basically a team that came up with a way to game tokenomics to make the nominal price increase.
It’s not the type of project we would deem investment worthy.