Burn/Burned

Burn/Burned

When a cryptocurrency token has been purposely removed from the circulating supply then they are considered Burned. Compared to when the assets are accidentally lost, for example if it was sent to the wrong address with no owner or if the owner has lost their crypto wallet. Burning can be done with different goals in mind, but most often it is used for deflationary purposes: the decline in supply tends to drive up the price, incentivizing traders and investors to get involved.

The development team are usually the ones that take charge to token burning. It can be done in several ways, most commonly by sending the coins to a so- called "treasure pot". The current balance of this pot is not publicly visible on the blockchain, but ac countably decreasing over time. Another important use case for token burning is to maintain the price peg of stable coins (cryptocurrencies whose value corresponds to another asset). When you burn or mint new tokens as necessary, the controlling authority can influence the asset's price.

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