global.gerbangindonesia.org – Ever Heard of the Term Burn in Crypto? Turns out this means
Just like investing in other assets, in the crypto world there are terms that need to be understood before deciding to invest in crypto.
One example is Coin Burn or many call it Burning or Burn. Literally Burn is an English word which when translated into Indonesian means burning.
As for Coin Burn, it means burning coins. So what is the meaning or understanding of Coin Burn in the crypto world? Check out the discussion as follows:
What is Coin Burn?
Coin Burning is an intentional burning process to eliminate coins, so that they cannot be reused. The way the Coin Burning process works is by involving the developer who issued the digital asset or coin, reported by Zipmex, Sunday (27/3/2022).
To do so, the signature token will be entered into the Wallet which cannot be retrieved. This wallet is called an “eater address” which will be visible to all stains, but will be frozen on order. Furthermore, the status of this coin will later be published on the blockchain.
Meanwhile, according to Litedex Protocol’s Chief Marketing Officer, Andra Burn token is a scheme to maintain the supply of tokens in the market, by burning or eliminating it through a blockchain smart contract mechanism.
Ways in the Burning Process
There are several ways in the Coin Burning process, the methods vary and are determined by the purpose of burning it. Some developers, will use a one-step burn after the Initial Coin Offering (ICO) is complete to remove coins from an unsold token from circulation.
Then, there are also those who prefer to do it in several stages. Like Binance for example, which processes Coin Burning every three months, this burning is part of Binance’s commitment to reach 100 million BNB tokens which will later be burned.
Although the mechanism used will vary, coins that have gone through the burning process cannot be recovered and cannot be reused. These coins will be effectively removed from circulation and publicly listed and definitely verifiable on the blockchain.
Is Every Coin Must Burn?
Is every coin or crypto Token Mandatory Burn ?
In this case, Andra explained, the Burn process or mechanism is not mandatory for every crypto or token project.
“Not mandatory, depending on the policy of each developer, but burning is important when the supply of tokens is too much so that the token price becomes low,” wrote Sunday (27/3/2202)
Excess Tokens or Coins Burning
Andra said, the advantage of cryptocurrencies that carry out the Burning process is that the value or price is maintained in the market.
“Tokens that are burned will be maintained in value, because supply in the market is maintained. Meanwhile, those that are not burned, the potential for prices to fall is very easy because no one controls the supply of tokens,” concluded Andra.