Token Burn
A token burn permanently removes tokens from circulation, usually by sending them to an unusable blockchain address.
A token burn is the deliberate destruction of cryptocurrency tokens so they can no longer be used or traded. In practice, a project sends tokens to a “burn address,” a wallet with no known private key, making the tokens permanently inaccessible. The transaction is usually visible on the blockchain, so the burn can be independently verified. Burns can involve tokens held by a project team, tokens collected as fees, or tokens bought back from the market before being removed.
Token burns matter because they reduce circulating or total supply, which can affect a token’s scarcity and its economic design. Projects may use burns to manage inflation, offset newly issued tokens, share protocol activity with holders indirectly, or remove unsold tokens after a launch. For example, a network might burn a portion of transaction fees, similar to how a company might retire shares, though tokens and shares have different rights and risks. A burn does not guarantee a higher price; demand, utility, liquidity, and broader market conditions still matter.
Other terms in Tokenomics & Launches
Airdrop
A token distribution method where a project sends free tokens to users, often to reward early activity or broaden ownership.
Cliff (Vesting)
A cliff is the initial waiting period in a vesting schedule before any allocated tokens can be unlocked or claimed.
Emission Schedule
A plan that defines how and when new tokens are created, released, or unlocked into circulation.
Fair Launch
A token launch model that aims to give the public equal initial access, with no special early allocations for insiders or private investors.