After upgrading, the base NFTs are burned. Since the number of ZONE NFTs are hard-capped, this creates deflationary pressure on the NFTs of a given tier and type by taking them out of circulation.
While the higher tier NFT cards are desirable for obvious reasons, the base level NFT cards also become desirable due to their rarity in the ecosystem and their virgin properties.
It will also create a marketplace for these NFTs based on power-up hierarchy and how few remain in existence. Thus, this deflationary mechanism ensures that any upgrade creates value for all ZONE NFT holders.