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SHIB burns tokens, MOXIE burns tokens. 🔥🔥🔥
But what does it really mean to “ burn “ tokens ? 🧐
A "burn address" is designed to be permanently inaccessible, meaning no one, including the sender, holds the private key to it. Sending cryptocurrency to a burn address effectively destroys the tokens, as they are permanently removed from circulation.
The Ethereum burn address is a well-known example, 0x0000000000000000000000000000000000000000.
Token burns are deflationary events. They help manage inflation by preventing an oversupply that could devalue the token. By reducing the total supply, token burns can create a scarcity of an asset, which can potentially increase the value of the remaining tokens.
Token burns can be used to enhance network security by preventing spam and malicious activities. By requiring a small number of tokens to be burned as part of transaction fees, blockchains can deter unnecessary or harmful transactions, making it costly for attackers to spam the network. 3 replies
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