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Token Burning Explained: Is it Bullish?

Token burning is the process of permanently removing coins from the circulating supply. This is usually done by sending the tokens to a 'burn address' (a wallet that no one has the keys to).

Common Burn Strategies

1. Buy-back and Burn: The project uses protocol revenue to buy tokens on the open market and burn them.
2. Transaction Fee Burns: A small percentage of every trade is automatically burned (like Ethereum's EIP-1559).

The Deflationary Narrative

In theory, reducing supply while demand stays the same should increase price. However, burning tokens doesn't automatically create value if the project lacks utility.

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