Token Burn

A token burn is the permanent removal of tokens from circulation. The tokens are sent to a special address that no one holds the keys to, so they can never be spent again.

How it works

To burn tokens, a project transfers them to a verifiable “burn address” — one provably without a private key — or calls a burn function in the token’s contract that destroys them. The transaction is public, so anyone can confirm the supply has been reduced. Burns may be one-off events or built into a protocol to happen automatically.

Why it matters

By reducing supply, burns can make a token more scarce, which projects sometimes use to manage tokenomics or share value with holders. A burn does not guarantee a price rise, though — that still depends on demand. Some networks burn a portion of transaction fees as a structural part of their design.

Example

A project might burn a share of its tokens each quarter, steadily shrinking the circulating supply.