All terms
Permanently removing tokens from circulation by sending them where nobody can spend them.
Burning sends tokens to an address with no known private key, or calls a contract function that destroys them outright. Either way the supply falls and nobody can retrieve them. The transaction is public, so any burn can be verified rather than believed.
Burns are often presented as automatically bullish. They are not. Reducing supply only matters if demand is unchanged, and burning tokens that were never going to be sold changes very little. A burn of allocated, unlocked, about to be sold supply is meaningful; a burn of tokens nobody was going to release is theater.
Always check the burn onchain. Announced burns that never happened are common.
A project sending a quarter of its treasury allocation to a burn address, with the transaction hash published so anyone can confirm it.
That burning tokens raises the price. It reduces supply, which changes nothing on its own if demand falls with it. Burns funded by real revenue mean something; burns from a treasury that minted the tokens are theater.
Common questions
Does burning tokens raise the price?
How do I verify a burn happened?
Where to go next
More defi terms
Want this explained out loud?
Some of these land faster in conversation than in writing. Sessions are one to one and you can ask anything, including the things that feel too obvious to ask.