It is the process of removing a specific amount of cryptocurrency from circulation to improve the currency's economy.

This is done by sending these coins to inactive special addresses, so they cannot be used again.

Why is Token Burn done?

  • To improve the currency's value: By reducing the number of available coins, demand may increase and value may rise.

  • To increase investor confidence: The process reflects the team's commitment to a long-term plan.

  • To adjust supply and demand: Some projects resort to this to limit inflation or market fluctuations.

Example from BNB and Binance:

  • The Binance platform periodically reduces the number of BNB coins available for trading, as part of a studied plan to support the currency's stability in the long term.

Does Token Burn always guarantee a price increase?

  • Not necessarily, because the market is also affected by:

  • Demand size

  • Project developments

  • General news

  • Economic conditions

In summary:

Token Burn is an economic tool used by some projects to support the currency, but it does not always guarantee consistent results.

Stay informed and think carefully before making any investment decision.

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