Token Burn is the process of permanently removing a certain number of cryptocurrencies from circulation, often by sending them to a non-recoverable address. For BNB (Binance Coin), the token burn has direct and indirect effects on its value.

🔥 How does the burning of BNB affect its value?

1. Supply Reduction

- Every burn reduces the total number of BNB coins available in the market.

2. Enhancing trust in the project

- Regular burns demonstrate Binance's commitment to achieving long-term value for BNB holders.

- It gives the impression that the team is working to reduce inflation and improve the currency's economy.

3. Increasing Scarcity

- Over time, BNB becomes more scarce, which may make it more attractive to investors.

- This is somewhat similar to gold: the rarer it is, the more valuable it becomes.

4. Stimulating Demand

- Investors may see the burn as an opportunity for future profits, increasing demand for BNB.

- This can lead to a price increase even before the actual burn, based on expectations.

📊 Practical Example: BNB's Quarterly Burn Program

- Binance burns BNB every quarter based on trading volume on the platform.

- The ultimate goal is to reduce the total number of BNB from 200 million to 100 million.

- This policy has helped support the price of BNB in the long term, especially during bullish market periods.