Definition
A burn removes coins or tokens from practical circulation or recorded supply. A token contract may explicitly reduce balances and total supply, while another design may send assets to a provably or conventionally unspendable destination. These approaches should be distinguished because their accounting and verification differ.
How It Is Used
Protocols can burn a portion of fees, allow holders to redeem and destroy tokens, or run discretionary burn programs. The event may be visible through contract records or other on-chain data. A transfer labeled burn by a website does not alone establish that the receiving address is inaccessible or that a supply counter was reduced.
Key Considerations
Burning some units does not guarantee that total supply decreases if new issuance exceeds the amount removed. It also does not guarantee a price increase, because demand and market conditions still matter. Assess who controls the process, whether new units can be minted and which supply measure changes. A burn is not the same as a temporary lock, a transfer to a treasury or a lost password.