Sounds absurd, right? Imagine someone taking a stack of money and setting it on fire... But in the crypto world, it's not madness, it's a well-thought-out strategy!
Let's figure out what this means, who does it, and most importantly — why?
💡 What is 'coin burning'?
Coin burning (from English coin burn) is the permanent removal of a portion of cryptocurrency from circulation. Coins are sent to a special non-recoverable wallet (also known as a 'black hole address'), from which nothing can be transferred back. It's like throwing the key to a safe into the ocean.
Why burn coins?
1. Reducing supply.
The fewer coins in circulation, the higher the value of the remaining ones (according to the laws of supply and demand). This helps maintain or even increase the token's price.
2. Motivation of holders.
The burning process makes the asset scarcer, and therefore more valuable to investors. Essentially, it is a reward for patience for those who HODL (hold tokens long-term).
3. Compensating for inflation.
Some blockchains release new coins regularly (for example, through mining). Burning helps balance inflation so that the coin does not lose value.
4. Increasing trust.
Burning shows that developers are serious: they sacrifice part of the profits for the sustainability of the project.
👨💻 Who burns cryptocurrency?
1. Developers.
For example, Binance regularly burns tokens $BNB every quarter — part of the company's profits goes towards this.
2. DeFi and DAO projects.
Burning mechanisms are often built into smart contracts — for example, with each transaction or during exchanges.
3. Miners / validators.
In some networks (for example, Ethereum after the EIP-1559 update), part of the transaction fees is simply burned!
Examples of burning:
Binance #BNB : Over 50 million BNB have already been burned, which is almost $20 billion!
Ethereum: Since the EIP-1559 update, billions of dollars worth of #ETH have been burned!
Shiba Inu: The community #SHİB organizes burns themselves to increase the value of the token.
Important: burning ≠ guarantee of price increase! Burning is a tool, not magic. If there is no real value or demand for the project, no amount of 'bonfires' will save it.
$BNB $ETH 
