In Tokenomics, What Is the Role of a ‘Burning’ Mechanism?

A burning mechanism permanently removes tokens from the circulating supply by sending them to an inaccessible address, often called a 'burn address.' Its role is to reduce the total token supply, acting as a deflationary force to potentially increase the value of the remaining tokens. Burning can be funded by transaction fees, protocol revenue, or discretionary actions, and it signals commitment to long-term value.