How Does the Burning Mechanism Impact Miner or Validator Revenue?
The burning mechanism reduces miner/validator revenue because the base fee, which constitutes the majority of the transaction cost, is destroyed instead of being collected by them. They only receive the optional 'priority fee' (tip) and the block reward.
This shifts the revenue structure and slightly reduces the total income from fees.
Glossar
Burning Mechanism Impact
Deflation ⎊ The mechanism inherently reduces the circulating supply of the native token, creating scarcity which can exert upward pressure on its market value.
Burning Mechanism
Deflation ⎊ Reducing the total quantity of a digital asset through deliberate destruction creates a contraction in the available supply.
Revenue
Yield ⎊ Revenue within cryptocurrency, options trading, and financial derivatives represents the economic gain derived from deployed capital, factoring in both explicit payouts and implicit benefits like optionality value.
Validator
Role ⎊ A validator is a critical network participant in a Proof-of-Stake blockchain responsible for proposing, verifying, and attesting to new blocks of transactions to maintain consensus and secure the distributed ledger.