What is burn?

The permanent removal of tokens from circulation by sending them to an address no one controls.

Projects burn tokens to reduce supply, which is sometimes marketed as supporting price but has no guaranteed effect.

There are two very different things called burning. One is a protocol rule that destroys value automatically as a side effect of use, such as Ethereum's base fee. The other is a discretionary act by an issuer, announced in advance and often timed for attention. Only the first is structural.

How it works

The simplest method sends tokens to an address whose private key does not exist and cannot be derived, commonly an address of all zeros. The tokens still appear on chain but nobody can ever move them, which is why supply figures usually exclude them.

A cleaner method uses a burn function in the token contract that reduces total supply directly, so the units cease to exist rather than sitting at an unreachable address. erc 20 tokens that support this expose it explicitly.

Protocol-level burning is different in kind. Under EIP-1559 the base fee on every Ethereum transaction is destroyed rather than paid to anyone, which the specification states plainly (source: EIP-1559). That means network usage removes ether from supply continuously, with no announcement and no discretion.

A buyback and burn program sits between the two: revenue is used to purchase tokens on the open market and destroy them, so the burn is discretionary but funded by actual cash flow.

Every burn is verifiable. The transaction is on chain, so a claimed burn either happened or did not, and checking takes a minute on an explorer.

Example

Illustrative: a token has 1,000,000,000 units outstanding and the issuer burns 100,000,000 held in its own treasury. Circulating supply is unchanged, because treasury tokens were never circulating. What changed is the maximum that could ever circulate, which removes future dilution rather than current supply. If instead the issuer had bought 100,000,000 tokens on the open market and burned those, the buying itself would have been real demand and the burn would have reduced tokens actually held by the public.

Why it matters when you buy

Burns change supply numbers, and supply numbers change market cap and fdv figures that people compare across assets. What matters is which supply was destroyed: tokens that were never going to circulate soon, or tokens bought from the market with revenue. Check the schedule of what is still due to be released at the unlock pressure view.

Related terms

• buyback and burn — burns funded by purchasing on the market
• base fee — the automatic protocol burn on Ethereum
• circulating supply — what a burn may or may not reduce
• fdv — valuation using fully diluted supply
• emission schedule — issuance running the other direction
• fee switch — the revenue that can fund a burn

Questions

Can burned tokens be recovered?

No, and that is the point. Tokens sent to an address with no key are unreachable by anyone, and tokens destroyed by a contract function no longer exist in the supply record.

Does burning make the remaining tokens more valuable?

It reduces supply, which is one input among many. Price depends on demand too, and there is no mechanical relationship between a burn and a price. RampAtlas does not forecast prices.

How do I verify a burn actually happened?

Look up the transaction on the chain's explorer and check the amount and destination. Compare the resulting total supply against what the project claims.