Burn or burning of coins or tokens means permanently removing that digital asset from circulation, effectively reducing the total supply of the asset.

Think of it as destroying assets that can never be brought back.

Burning is performed by sending the coin or token to a burn wallet or address, from where the coin or token can’t be retrieved.

The motive behind burning coins or tokens is that the value of the remaining supply will increase because the total supply of the digital asset falls and becomes more scarce.

Some projects actually build into their code an automatic schedule of burning.

Again, the motive here is that the future supply of a currency will actually go down, or not grow, reducing fears of inflationary effects on the price of the asset.

This makes investors and hodlers happy!