Coin burning refers to the process of permanently removing a certain amount of cryptocurrency from circulation. This is typically done by sending the coins to an unusable address, effectively taking them out of the total supply.
One common reason for coin burning is to create scarcity and increase the value of the remaining tokens. By reducing the overall supply of a cryptocurrency, the demand for it may increase, potentially driving up its price.
Coin burning can also be used as a way to reward existing holders of a particular cryptocurrency. By reducing the supply, those who hold onto their coins may see an increase in the value of their holdings.
Additionally, coin burning can be a strategy to combat inflation or to control the supply of a cryptocurrency in the long run. This process is often carried out by the developers of a project, who decide on the amount of coins to be burned and the method of burning.
