Coin burning was around long before Bitcoin (BTC). It’s extremely similar to stock buybacks, and was probably inspired by them.
In 2017 and 2018, many cryptocurrencies, including Binance Coin (BNB), Bitcoin Cash (BCH), and Stellar (XLM), burnt tokens to reduce supply and raise prices. It is becoming more typical with emerging cryptocurrencies that start with ample token supplies.
One of the main reasons coin burning has gained popularity recently is that it allows cryptocurrencies to begin at low prices and then artificially enhance their value after having secured investments. Because of the low price, a new cryptocurrency might start at 1 trillion tokens for a fraction of a cent and attract investors. The creators can then burn billions of tokens to raise the price in the future.
The Binance buyback and burn begins when the crypto exchange has utilized 20% of its revenues to burn and buyback BNB tokens every quarter, reducing the BNB token supply. On October 18, 2021, the 17th BNB Burn removed 1,335,888 tokens from the market. The difference between stock buybacks and cryptocurrency buybacks (like the BNB buyback) is that the latter is completed and guaranteed automatically.
When purchasing a standard stock, investors are sometimes unclear whether the corporation will buy back shares or pay dividends. On the other hand, buybacks with cryptocurrencies are carried out through pre-programmed smart contracts.
Furthermore, the Shiba Inu (SHIB) burn initiative, which intends to burn a set percentage of profits or a given monetary amount into the official SHIB burn wallet, is one of the upcoming crypto burns.