Coin burn, an interesting term of crypto ecosystem
This term of the crypto market is intended to eliminate a part of the total crypto assets available in the ecosystem
The coin burn is the procedure to reduce a specific volume of cryptocurrencies in the ecosystem. In this way, the crypto assets in circulation are permanently eliminated and for this they are sent to a public address where they can never be spent, because their particular keys cannot be recovered.
Generally, coin burn is used to:
- Create new currencies
- Give rewards to coin providers
- Destroy coins or tokens that were not sold after an ICO sale
However, its usefulness also varies around other reasons, such as: maintaining a stable value of the currency and encouraging merchants to maintain their crypto assets, in addition to acting as a deflationary action.
In general, the cryptocurrency carrier activates the burn function by indicating the amount of coins that you want to burn, the contract verifies that the bearer actually has the amount of coins that you want to burn in your wallet and that the balance is positive.
The Binance exchange platform periodically burns coins through the smart contract function. This computer program is scheduled for execution quarterly where about 50% of the circulating coins are burned.
K.Villarroel
Source: infocoin
