Wondering what is meant by burning in crypto space? Burning in the crypto industry is the process by which users remove the tokens from circulation thereby reducing the total number of coins being used. To burn a token or a crypto asset, the tokens are sent to a wallet address that can only receive tokens but cannot send them. Since the wallet is outside the network, the tokens can no longer be used.
The wallet addresses where tokens are burned are called eater or burner addresses. The process of burning permanently removes a certain number of tokens from circulation, thereby increasing the demand and decreasing the supply. Burning is the process used in the crypto space to make an asset deflationary. Crypto assets often undergo intentional burning to increase their value of the same. This also improves the performance of the crypto asset in the long run.
Burning in the crypto space takes out tokens from the circulating supply. It can be beneficial or can prove disastrous for an asset depending upon the investors and the trading sentiment.