🔥 What Is a Token Burn?

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Today, we’re learning about how crypto projects control supply—and boost demand. Let’s dive in!

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What Is a Token Burn?

In the world of crypto, “burning” a token doesn’t involve fire, but it does mean taking that token out of circulation permanently. It’s a deliberate move by a project to reduce the total supply, often to help support or increase the value of the remaining tokens. Think of it like a company buying back and retiring shares—fewer tokens available, more scarcity.

So, how do token burns actually work? Projects send tokens to a special wallet address that no one can access, often called a “burn address.” Once sent there, those tokens are gone for good. It’s a one-way trip. This action is recorded on the blockchain, so anyone can verify that the burn really happened.

But why burn tokens in the first place? One big reason is economics. Reducing the supply of a token can create upward pressure on its price—especially if demand stays strong or grows. It’s a move that signals confidence, and often rewards long-term holders by making their remaining tokens more valuable.

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Some projects build burns directly into their mechanics. For example, tokens might be burned with every transaction, during staking, or after a token swap. Others burn tokens manually—after major milestones, revenue surges, or governance votes. Either way, it’s a strategy that plays with scarcity to strengthen a token’s position in the market.

It’s not just about price, though. Burns can also reflect a project’s alignment with its community. By destroying tokens, teams show they’re not hoarding supply or flooding the market. It becomes a kind of trust signal—one that says, “We’re in this for the long game.”

TOKEN BURNS = SCARCITY + SIGNALS

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