What is Token Burn How to Remove Cryptocurrencies from Circulation?

**Token Burn** means removing a digital asset from circulation indefinitely and consciously reducing its supply. This process is commonly performed with cryptocurrencies and NFTs. Here is a more detailed explanation.

- **Why Token Burn?**
- Supply Control: Token burn adopts a deflationary approach by reducing the total supply. This may contribute to a particular cryptocurrency becoming rarer and increasing in value.
- Project Strategy: Some projects use token burn according to their own strategy. This can be done to shape the project's ecosystem and create value for users.

- **How to do it?**
- Burning of cryptocurrencies and NFTs occurs by sending them to an unusable wallet. No one can access this wallet and the sent assets disappear, never to be used again.

Token burn is used by cryptocurrency projects for different purposes and generally aims to control supply and increase value.
How is token burning performed?

**Token Burn** is a common transaction in the cryptocurrency ecosystem. This process is done with the aim of permanently removing a certain amount of cryptocurrencies from circulation and reducing the total supply. Here are the steps on how to perform token burn.

1. **Wallet Selection**: Select a wallet that cannot be used for token burning. No one can access this wallet and the assets inside are lost, never to be used again.

2. **Send Tokens**: Send cryptocurrencies to this unavailable wallet. This process is done to remove tokens from circulation.

3. **Confirmation**: The assets in the wallet you made the transaction are now removed from circulation.

This process is used according to the supply control and value increase strategies of the projects.
What is Token Burn in NFTs?

In NFTs, “token burn” refers to the permanent destruction of an NFT’s token. This transaction aims to reduce the supply of the NFT and generally increase the economic stability of the project or the value of the token. Token burning can be done on a specific NFT project or platform and is usually done in the following ways.

1. **Direct Burn:** The NFT project can directly burn a certain amount of NFT tokens. This process may be controlled by the project's developers or administrators and is usually determined by a specific process or community vote.

2. **Burning via User Interactions:** Users can burn NFT tokens in exchange for a specific transaction or interaction. For example, some of the tokens may be destroyed as a result of transactions such as purchasing or transferring an NFT.

3. **Targeted Burn:** An NFT project can use token burn to achieve a specific goal or trigger a specific event to occur. For example, a portion of tokens may be destroyed when a certain community goal is reached or within a certain time period.

A token burn causes the supply of NFTs to decrease, which can often lead to an increase in the token price or an increase in the value of the token. However, the impact of a token burn on the long-term success of the project will depend on the economic structure of the project, the needs of its community, and other factors. Therefore, the token burn must be carefully planned and aligned with the long-term goals of the project.