Coin burning has been around for quite some time now. In the highly volatile crypto market, the developers of various coins burn them to prevent the coin from devaluation. This concept is used only in the crypto industry and has proven helpful for many tokens and coins.
When a coin is said to be burned, it means that the coin will be pulled out of the circulating cycle. In the process of coin burning, a particular set of coins are intentionally sent to a “black hole” or “eater address.” These addresses are unattainable. Thus, the coins sent here are useless and are eliminated permanently from circulation.
There are two categories of coin burning:
LCX also participates in token burning through TIA tokens
TIA tokens are distributed on the purchase of “TIAMONDS-the tokenized diamonds” to its owners. Now, to stabilize its supply in circulation, the tokens need to be burned. So, LCX burns 2.5% of its TIA token on every on-chain transaction. About 170,279.167 TIA tokens have already been burnt as of writing.
Many organizations have opted for a periodic coin burning mechanism, and many ICOs have declared that they will use the coin burning mechanism at the end of their token sale for the unsold tokens. This approach of burning the coins for the greater good comes with lots of features. Coin burning can soon be used as a vital step in preserving the wealth of the community.
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