How Does a Smart Contract Handle Token Burning?
Token burning is the permanent removal of tokens from circulation, typically by sending them to an inaccessible "burn address" (a wallet with no known private key). The smart contract implements a specific function that updates the total supply and the sender's balance, effectively destroying the tokens.
This is often used to manage token supply or implement deflationary mechanisms.
Glossar
Smart Contract
Code ⎊ The contract is fundamentally self-executing code deployed on a distributed ledger, embodying the terms of the agreement in an immutable format.
Token Burning
Burn ⎊ The deliberate and permanent reduction of tokens within a cryptocurrency ecosystem represents a mechanism designed to influence supply dynamics and potentially enhance the value of remaining tokens.
Total Supply
Circulation ⎊ Total Supply within cryptocurrency defines the amount of a given token or coin currently available to the public for trading and use, representing a critical metric for assessing market capitalization and potential price dynamics.