If the Redenomination of Cryptocurrency Tokens is going to apply, there will likely be pros and cons when applied, the benefits and losses are shared by the parties involved in the process when the token redenomination is carried out. The impact that will await after redenomination is also likely to have been prepared by related parties.
The following are the advantages and disadvantages of Token Redenomination:
Pros
1). Service Updates and Improvements
Redenomination can be said as an improvisation made by the token party to improve or improve the quality of their token to attract new investors with the possibility of increasing supply of the Token. With updates made in the hope of increasing the interest of token holders and investors to remain loyal to the token.
2). Market Capitalization that will Increase
If the Redenomination of a Token is successfully applied without any obstacles during its implementation, and new investors start coming, increasing the market capitalization will likely be a green light for the token party. Several examples of Redenominated Tokens like Sun (new) and Pundi X managed to reach the 200s ranking via the Coimarketcap.com website.
3). Strengthening the relationship between related parties
After successful Redenomination, the trust of investors and token holders in the token party will be better. For example, when Sun Token redenominates, the CEO of Tron, Justin Sun, announced that after the Sun Token Redenomination was operated, the parties involved would be rewarded for the success of the Redenomination and also the Tron network would always provide the best service for all parties involved in it.
Cons
1). Token's popularity may drop
When performing token redenomination, the nominal value of the token is changed to a fixed value, and investors will likely feel confused and assume that the token is a scam or that they are doing token burn which results in a decrease in token popularity due to public ignorance of Token Redenomination or lack of socialization from the token party before committing. Redenomination.
2). Token Redenomination in Cryptocurrencies is still not familiar
Crypto traders or investors generally still don't understand what token redenomination is because of the lack of information about it, I can say Redenomination is still a layman and needs planning before implementing token redenomination.
3). The risk awaits
Redenomination of tokens will cause unexpected risks after the redenomination is complete. The worst possibility is that token holders and investors will feel that there will be no short-term profit when a new redenomination is applied, and it is possible that the token will be abandoned.
Final Thought
I think a crypto project will do Redenomination if it is needed, for example, a token that wants to reduce the nominal amount of Market Capitalization so that the numbers become more concise and also want to update the token system. For crypto projects that are stable and do not have technical problems that require them to redenomination tokens, I don't think this is necessary because it will cause pros and cons.
Maybe a few years later a new crypto project will require Redenomination because the nominal number continues to grow, all crypto projects will likely Redenomination to cut the amount that is not needed without the need to reduce the selling price of the token/coin.