Although token burns can increase the scarcity of a token, they are not without risk:
- Overuse: If token burns are overused or if the project relies too heavily on them to drive up value, it can create instability in the market.
- Misuse: Token burns can be misused by projects to manipulate token value artificially, without creating any real underlying value or utility for the token.
- Irreversibility: Once tokens are sent to a burn address like "0x000000000000000000000000000000000000dead," they cannot be retrieved, even if the burn was done accidentally.