Token Burn

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A Token Burn or Coin Burn is an event where a token issuer removes an amount of tokens from circulation, often by transferring a number of tokens to a burn address (a cryptocurrency address that is factually inaccessible).


When tokens are burned, the circulating supply of that token decreases.

A lower circulating supply means the token's total market capitalization (price of one token * tokens in circulation) decreases as well.

For a token to maintain the same market capitalization that it had pre-burn, the price of one token must increase. Therefore, holders of the token generally benefit from tokens being removed from circulation.