Why Crypto Projects Burn Tokens?

Adekunle Joshua

To maintain asset prices, some crypto projects use "coin burn" to manage supply by removing tokens from circulation

In token burn, coins are sent to a burn address, rendering them inaccessible and permanently removing them from circulation

Token burning can be voluntary or implemented through smart contracts or protocols

Reasons for token burning include proof-of-burn for network security, increasing value by reducing supply, and managing price fluctuations

Pros of burning tokens include curbing inflation, maintaining or increasing value, and creating deflationary effects.