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Author: Admin | 2025-04-28
The token burning process, it'll be permanently eliminated from the provided wallet address. This irreversible nature of token burn can pave the way for individual holders to regret once the price of the burned token surges. Market Volatility: Token burning process and announcements are celebrated by the projects and their communities on major social media platforms. This rise in popularity might lead to short-term price volatility. Less Impact: Individual or small coin burning by projects doesn't have any positive impact on the crypto. For example, burning a few hundred a token for a project with over 100 billion circulating supply creates negligible impact. How Token Buring Impacts the Crypto Price?Token burning is considered a positive event in the crypto space, encouraging more projects to execute this burning mechanism. However, the positive sentiments towards token burning don't fully guarantee a positive impact on the token's price. The price variation of tokens depends on numerous factors, such as overall crypto market sentiments, project development, and more. However, sustainable projects with token burning mechanisms surely have a positive impact on the token's tokenomics and price from a long-term perspective. There are also instances where the token price surges when projects announce token-burning-related activities. For example, following the Injective (INJ) token burn event on June 12, 2024, the INJ token surged over 18%. Source: FXEmpireThe sudden demand in the market can positively impact the price rise when projects burn or plans to burn their tokens. However, buying tokens at market peak impulsively based on FOMO can potentially lead to huge losses. Notable Examples of Token BurningBNB Token BurnDuring the launch of BNB in 2017, Binance committed to removing 100 million coins from its total supply of 200 million BNB. Binance's whitepaper also clearly mentions using 20% of their quarterly profit to buy back BNB and burn them until their commitment towards destroying 100 million BNB tokens is fulfilled. In the first quarter of 2024, Binance executed its 27th BNB burn, resulting in the removal of almost 2 million BNB from the supply worth ~$1.2 billion at that time. Following the 27th token burn, Binance succeeded in burning over 54 million BNB since its launch, lowering the circulating supply to around 147 million BNB.Source: BNB BurnBNB token burn details are available on platforms like BscScan so users can verify the coin burning transactions and wallet addresses. This real-time BNB burn data adds more trust to the community. ETH Token BurnEthereum implemented the EIP-1559 in August 2021 as a part of its London Hard Fork. This Ethereum proposal forwarded the restructuring of the Ether fee model, which includes the burning of ETH with each token transaction.The changed protocol ensures the burning of a part of the
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