Token Burn
The deliberate destruction of a quantity of tokens by sending them to an unspendable wallet address. Token burns reduce the circulating supply, which can increase scarcity. Some protocols conduct regular token burns as part of their tokenomics model.
Why It Matters
Token burn refers to the process of permanently removing a certain number of tokens from circulation, often to create scarcity. This is significant for investors as it can impact supply dynamics and potentially increase the value of remaining tokens.
Example
If a cryptocurrency has 1 million tokens and regularly burns 10,000 tokens, the total supply decreases over time. This reduction in supply may lead to increased demand and potentially raise the token's value.
Beginner Context
For beginners, understanding token burns introduces the concept of supply management in the crypto world. It emphasizes how projects can influence their market through strategic decisions on circulation.
Mike Starr
Founder, CryptoWizardTools · M.S. Organizational Management
Last reviewed: August 2026
Related Terms
Bull Market
A prolonged period of rising prices across the market, characterized by optimism, investor confidence, and expectations of continued growth.
Custodial Wallet
A wallet where a third party (usually an exchange) holds the private keys on your behalf. Custodial wallets are convenient and allow password recovery, but mean you do not truly control your funds — "not your keys, not your coins."
Slippage
The difference between the expected price of a trade and the actual execution price, often caused by low liquidity or high volatility.
AMM
Automated Market Maker. A decentralized exchange protocol that uses mathematical formulas to price assets, allowing users to trade without traditional order books.
Memecoin
A cryptocurrency inspired by internet memes or jokes that typically has no inherent utility. Examples include Dogecoin, Shiba Inu, and Pepe.