What is Token Burning?
The process of permanently removing a certain amount of cryptocurrency tokens from circulation.
Key details
- Deflationary
- Can create scarcity and potentially increase token value.
- Verifiable
- Burns are typically done by sending tokens to an unspendable address.
- Strategic
- Often used as part of tokenomics models or governance decisions.
- Permanent
- Burned tokens cannot be recovered or reused.
Examples
- 01Binance's BNB quarterly burns based on trading volume.
- 02Ethereum's EIP-1559 implementation that burns a portion of transaction fees.
- 03Project-specific burns to adjust token supply or distribution.