Bryan
Bryan

Burning

Definition

Burning happens when a cryptocurrency token is intentionally sent to an unusable wallet address to remove it from circulation. This practice often occurs to decrease the supply to raise the price of a cryptocurrency as manipulating the supply and demand dynamics can benefit current holders.

Examples of Usage

  • “The co-founder of Ethereum, Vitalik Buterin, has burned 90% of his Shiba Inu tokens.” 
  • “The EIP-1559 protocol modified the Ethereum fee market by introducing a burn feature that removes a percentage of the blockchain’s transaction fees from circulation.” 
  • “Binance has multiple major burn procedures for its BNB tokens at the moment. A percentage of the gas allowance spent on BSC, for example, is immediately burned. BSC also burns roughly 860 BNB tokens per day. Finally, every quarter, BSC burns a certain number of tokens”. 

Origin of the term “Burning.”

Iain Stewart first introduced the idea of Proof-of-burn in 2012. PoB is a system that enables the irreversible and provable destruction of a cryptocurrency. Coin burning went from an eccentric act to a more accepted protocol procedure after more evidence showed that it could be helpful.

Source: https://eprint.iacr.org/2019/1096.pdf

Bryan
Bryan

Bryan indulges in every bit of crypto-related news and material he can lay his hands on. As such, he often shares his views and advice through the onXRP content platform. He is a firm believer in crypto’s potential in the financial and economic world. With 5 years of experience in investing and trading Bryan brings excellent insights to the table. He is excited to bring much of this knowledge and many of his skills to the onXRP platform.