Token Burn
Permanently removing tokens from circulation by sending them to an inaccessible wallet address.
Explained Simply
Token burning is a deflationary mechanism where tokens are sent to a 'burn address' — a wallet with no known private key, making the tokens permanently unspendable. Burns reduce total supply, potentially increasing the value of remaining tokens. Ethereum burns a portion of transaction fees (EIP-1559), BNB conducts quarterly burns, and many memecoins use burns for marketing. Burns only affect value if demand remains constant or grows. A burn alone doesn't make a token a good investment.
Example
Ethereum has burned over 4 million ETH since EIP-1559, sometimes burning more ETH than is created, making ETH temporarily deflationary.
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This content is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult a qualified professional for advice specific to your situation.