Burning (Crypto)

The permanent removal of cryptocurrency tokens from circulation by sending them to an inaccessible wallet address. Token burns reduce total supply and, all else being equal, create deflationary pressure on the remaining tokens. Ethereum's EIP-1559 upgrade introduced a burn mechanism for base transaction fees, sometimes making ETH deflationary during periods of high network activity. Projects also use scheduled burns as a tokenomics tool to signal scarcity.