Token burn

A token burn permanently removes tokens from circulation, usually by sending them to an address from which they can never be spent, or by destroying them through a smart contract. Burning reduces supply, which projects often present as a way to support the price.

Burns happen in different ways. Ethereum burns the base fee of every transaction under EIP-1559. BNB has a scheduled "auto-burn" that removes tokens each quarter. Some projects use part of their revenue to buy back and burn their own tokens, which works like a share buyback. Others announce one-off burns as marketing events.

A burn is only meaningful relative to issuance and demand. Burning a large share of a token whose team still holds most of the remaining supply, or that is issuing new tokens faster than it burns them, may change little. Burns of tokens that were never in circulation, such as unallocated treasury tokens, do not reduce the supply available to the market.