2022-06-07 17:15:54
What is "Token burning"? Why is this necessary? And what is this procedure? Burning tokens is the deliberate destruction of a certain number of coins to reduce their total volume.
In fact, the creators of the project send tokens to a non-existent blockchain address, where the tokens simply disappear.
Why are tokens burned?Every currency has inflation, and in order to avoid it, tokens are burned. After all, with an increase in the capitalization of the cryptocurrency and the appearance of new users, the coin becomes less rare, therefore, it falls in price. Burning is a direct effect on the coin's trade balance. With the help of its withdrawal from circulation, it is possible to maintain the price and avoid inflation.
How do I understand that the team is burning tokens, and not taking them for themselves?When tokens are burned, project developers always post a burning transaction as proof. With the help of the blockchain, everyone can look there and make sure that the creators of the project are honest.
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