Token Burn
Definition
A token burn permanently removes tokens from circulation by sending them to an unspendable address (often 0x0...000). Burns reduce total supply, creating deflationary pressure. Ethereum burns a portion of every transaction fee since EIP-1559 (2021), making ETH net-deflationary during high activity. BNB conducts quarterly auto-burns based on trading volume. Burns are often used to support price during bear markets or to share protocol revenue with holders.
Why Does This Matter?
Understanding Token Burn is essential for anyone investing in cryptocurrencies or working with blockchain technology. This concept directly influences how projects are valued, how markets behave, and what risks and opportunities exist for investors.
How Does CryptoValue Use This?
At CryptoValue, fundamental concepts like Token Burn feed into our proprietary Value Score — a rating from 0 to 100 based on 10 on-chain and market metrics. Our goal is to help you identify undervalued and overvalued coins, rather than just looking at price.