Hello everybody.

Welcome to this post. I hope that all of you will be happy and good and enjoying your precious health with the grace and blessings of Almighty Allah. Today, I am going to be a part of the Week 4 contest in the SteemitCryptoAcademy and the topic of discussion is Token Burn. So, let's start the discussion without any wastage of time.

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We all know that the burning process in our daily lives mean that we are supposed to destroy the nature of a item or thing permanently. The things that are burnt cannot be restored or reused again in the future. Thus, it is the permanent destruction of a matter object. The same is a phenomenon that happens in the cryptocurrency space and is known as 'Token Burn'.

Token Burn is a process in which some of the cryptocurrencies are destroyed permanently and removed from the circulating supply of that token or coin. The tokens that are burnt are actually those that are made non functional and cannot be used again or added to the market for the circulation. Through this process, we destroy the tokens that no longer remain the part of its circulation supply or cannot be exchanged/traded again.

In order to burn the tokens, there are particular address that are actually designed by the developers of a blockchain that are known as dead or null wallets or addresses. These address are just like the black hole in the blockchain as the tokens that are sent to these address are completely removed from the circulating supply.

The dead addresses are actually those wallets or addresses that only have the public key, so they can only receive the tokens. While, they don't have any private key thay can be used to access them. Thus, they are unaccessible and all the assets that are sent to them are permanently locked and never be used again for any purpose.

Reasons For Token Burn

We all know that the price of a token is based on the supply and demand of that particular asset in the market. The more the supply of a token, the lesser will be its price and vice versa. Similarly, the high demand of an asset in the market also leads to the increase in the price of that asset in the market.

Every blockchain user and its developers want their token or coin always on the peak value. For this purpose, the supply of that token is reduced through Token Burn and thus the price of that token is made balanced. This is very similar as there is a fact in the real life market.

Suppose, there is a great supply of potatoes in a country and the production was very high that year. So, to improve the price of potatoes in the country, the government of that country can export potatoes so that the supply within the country can be reduced and hence the price can be maintained. This is the simple illustration of the Token Burn.

How Token Burn Works?

As we have already discussed that the Token Burn can be done by sending or transferring the tokens that are supposed to burnt to the dead or null addresses. These addresses are already revealed by the developers when a blockchain is been developed.

The Token Burn can be carried out by an individual or the the developers team by themselves. When an individual wants to burn the tokens, he simply has to send those tokens to the dead or null address. Thus, a smart contract is signed and the transaction of this burning is recorded on the blockchain to keep the record and proof of Token Burn.

There are some blockchains that use the automated Token Burn process. One of these blockchains is the Ethereum Chain. In this case, a particular amount of the transaction fee/gas fee is reduced from every transaction and then these tokens are automatically sent to the dead wallets, hence Token Burn happens.

In some blockchains like Binance Network, the Token Burn is happened just like an agreement between the users and the company. The users who want to burn the tokens, fix the amount to be burnt and these tokens are automatically sent to the dead wallet by the company developers on regular intervals. Some blockchains also reward their users who do the Token Burn. So, these are some ways for Token Burn.

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The process of the Token Burn is discussed in detail in the above sections. Now, we are going to discuss the benefits of the Token Burn that are many in number. Some important advantages of Token Burn are as follow.

Reduction of Supply

The first and the most important advantage of the Token Burn is that it is the process in which the circulating supply of a token is reduced and this thing can benefit the ecosystem so much. As the supply is reduced, the worth of the tokens is improved and hence this thing proved to be profitable for the Blockchain and the users as well.

Increase in Demand

Another benefit of the Token Burn is that it can also improve the demand of a token in the market. This case is applicable in the blockchains that appreciate their users to burn the tokens. So, the users buy that token in order to burn them, hence when a high buying pressure exerted on a market, the demand is increased.

Maintenance of Price

Another important advantage of the Token Burn is that it can be done to maintain or balance the price of a particular token in the market. When the supply is limited and the demand is increased in the market, the price is increased impressively that can benefit both the company and the users as well.

Attracting More Stakeholders

One important factor behind the growth and success of a blockchain is the investors or stakeholders of the platform. We know that the big investors mostly invest in those tokens that are on high ranking or have good worth. So, the increase in the price of a token by burning can attract the new stakeholders and investors to that platform that is very much beneficial.

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The main purpose behind the Token Burn is to maintain the price of the token by reducing the supply of the token. When the supply of a token is reduced, its worth increases and the demand of that token is also increased accordingly. Thus, this could be the main purpose behind the Token Burn.

The more the tokens are burnt, there will be the increase in the price of that tokens that strengthen the platform on which that token is based. So, the blockchain are always ready to burn the tokens and appreciate their users to burn the tokens by sending them to the dead or null wallets. Let's have an example of the blockchain that used to burn its tokens.

Shib Inu Burn

One of the most popular and the most successful Blockchain that is consistent towards the burning of its tokens is the Shiba Inu. Now, they have created a special portal website where all the necessary information about the burning of SHIB are shared.

The ShibBurn website is designed to have a constant eye on the burning of the SHIB tokens. The circulating supply, market capitalization, staked tokens, burnt tokens, and all other important information related to the burning are present on the portal. Have a look on some screenshots in this regard.

_{Status of SHIB Burning - ShibBurn}

In the above screenshot, you can see that the current circulating supply of the SHIB token is 561,192,877,406,122 that is continuously varying. Also, it is noted that the SHIB burning rate has been increased significantly. In the last 24 hours, 93,770,165 SHIB have been burnt. Now, have a look at the latest burning of SHIB.

In the above two screenshots, you can see that the last burning of SHIB token was happened 5 minutes ago and in the right image, you can see that the price of the SHIB coin reacted to that burn steadily and pumped a bit.

There are actually these dead addressed that can be used for the burning of the SHIB coin. These are based on the Ethereum ecosystem and these addressed are listed below.

Latest Transactions of Shib Burning (left)	Result of the latest burning (right)

1.	0xdead000000000000000042069420694206942069
2.	0x000000000000000000000000000000000000dead
3.	0x0000000000000000000000000000000000000000

These addresses are actually those dead addresses that can be used for the burning of SHIB tokens.

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The burnsteem25 is an initiative that was introduced by one of the active user on the platform, @rosz. She presented this idea in a post for the Engagement Contest. Her idea was highly appreciated and officially accepted by the Steemit team to ensure the growth of the platform and beneficial for the ecosystem.

According to the scheme, 25% of the authors rewards are set to the dead account of the Steem Blockchain, @null. This is the dead address that is no in the use of any person, team, and the company by itself as well. The Steem tokens that are thus sent to this wallet are considered as burnt and are removed from the circulating supply permanently. Have a look on the dead account of Steemit.

_{Steemit Dead Account}

_{Steemit Dead Wallet}

In the above screenshots, you can see that the @null account has zero worth in the platform because it is the dead account that is designed to do the Steem Burn. Users set 25% beneficiary of their posts to use the #burnsteem25 tag. They can also send STEEM and SBD directly to this wallet in order to burn them manually.

My personal opinion regarding burnsteem25 company is very much positive. I believe the price of the STEEM can be made impressive by adopting this campaign. The more the users send their STEEM to this address, the more will be the reduction in the supply of STEEM, and hence the price can be increased impressively.

If we talk about the long-term benefit of this innovation, then I would like to say that STEEM has no max supply, so there is less possibility for the great effect of this. For great results, we have to adopt this campaign and also look for the limiting the supply of STEEM token. However, this innovation helped STEEM a bit to maintain its price during huge dump in overall market recently.

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Token Burn is actually a process in which the respective tokens are burnt, or made completely and permanent inactive. Tokens can be burnt be sending them to the dead wallets. This process reduce the circulating supply of the tokens and hence, the price can be improved significantly.

There are many advantages of burning the tokens like improvement of price, maintenance of ecosystem, attract more investors in the blockchain, etc. On the Steemit blockchain, the @null account is a dead wallet that can be used for the burning of Steem tokens. It is very much beneficial for the maintenance of price of Steem.

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I would like to invite my friends @growwithme, @chant, @minikay to take part in this beautiful contest.

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