SolStack

Token Burns

In Tokenomics & Economics

Plain English

Permanently removing tokens from circulation by sending them to an unspendable address. Like companies buying back stock and destroying it. This reduces supply, potentially increasing value of remaining tokens if demand stays constant.

Technical

Deflationary mechanism permanently removing tokens from circulation through smart contract burns or sends to unrecoverable addresses. Burns can be programmatic (fee burns), governance-decided (treasury burns), or event-triggered (revenue burns). Reduces supply to create scarcity value, but effectiveness depends on burn rate relative to usage and adoption.