What Is the Difference between a ‘Token Burn’ and ‘Token Lockup’?
A token burn is the permanent, irreversible removal of tokens from the circulating supply by sending them to an unspendable address. A token lockup is a temporary measure where tokens are made inaccessible for a specific period, usually through a smart contract, but they are not permanently destroyed.
Lockups are often used for vesting or staking, while burns are for deflationary control.
Glossar
Lockup Period
Constraint ⎊ Lockup periods, within cryptocurrency, options, and derivatives, represent a contractual restriction on the transfer of assets, typically following an initial offering or allocation event.
Token Lockup
Governance ⎊ A token lockup, within the context of cryptocurrency and decentralized finance, represents a contractual commitment to restrict the transferability of tokens for a predetermined period, fundamentally impacting governance mechanisms.
Token Burn
Process ⎊ A Token Burn is the intentional, cryptographic destruction of a quantity of digital assets, executed by sending them to a publicly verifiable, non-recoverable address on the blockchain.