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What is a token burn?
A token burn is the permanent removal of tokens from supply, so they can never be used again. Some tokens have a burn function in their contract, and Ethereum destroys the base fee part of every transaction fee.
What it means for you
A burn lowers the number of units, but on its own it says nothing about whether the remaining tokens keep their value. Tokens you burn yourself, or send to a burn address by mistake, cannot be recovered.
How it works
Some token contracts include a function that destroys units and lowers the recorded total supply, and the SEC lists any process for redeeming, retiring, freezing or burning as a supply rule an offering is expected to disclose. On Ethereum, EIP-1559 burns the base fee of every transaction: it is destroyed by the protocol rather than paid to the block producer. Because the base fee rises by up to 12.5% per block when blocks are fuller than the target, more ETH is burned when the network is busy.
An example
Say a transfer uses 21,000 gas while the base fee is 10 gwei and the tip is 2 gwei. Of the 252,000 gwei fee, 210,000 gwei is burned and only 42,000 gwei goes to the validator.
Sources: EIP-1559: Fee market change for ETH 1.0 chain, SEC: Statement on Offerings and Registrations of Securities in the Crypto Asset Markets · checked 4 October 2026
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