Scarcity Development Tutorials, Guides & Insights

For example, in token burn events, project developers often send tokens to this address to signal to the community that those tokens are now out of circulation. This is usually followed by a public announcement, detailing the number of tokens burned and the reasons behind the burn.

Token burns are typically done to increase scarcity, and scarcity can lead to a higher token value if demand remains the same or increases. The basic principle of supply and demand comes into play: when the supply of an asset is reduced, it becomes more valuable (assuming demand holds steady).