Good day, Steemians. I'm happy to enter the engagement challenge on Steemit again in this fourth week of Season 5. The topic before me today "Token Burn" is organized by the crypto academy, it is an interesting one and I will share with you my knowledge about the topic.

Use your own words to determine what is token burn. and explain how it works (if possible add an illustration for it)?

Burning in the real world means the permanent destruction of something in a way that it can not be retrieved again which means that it is no more useful. Burning also occurs in the crypto world and any amount of coins that undergoes this kind of program means they are to be destroyed permanently, so I will explain it better now.

Token burn is the process by which cryptocurrencies are destroyed permanently in the crypto space, the amount of the tokens that have undergone burning are completely removed from the overall supply of the asset. So tokens that are burned through the method become useless and can not by any chance enter circulation again.

Furthermore, the token burn in the crypto world is done using special addresses that are known as null address or dead address, these addresses are created to burn crypto assets. Null or dead addresses have no private keys to them which means that no one has access to them. All the assets in the null address remain there permanently and cannot enter the market for trading again.

Some of the examples of the null or dead addresses used for the token burn are: null on the Steem blockchain, 0x000000000000000000000000000000000000dEaD on the BNB Smart Chain and many others. Everything that enters the token burn address remains permanent there, recorded on the blockchain and anyone can view it at any time for transparency.

Token burn can occur in different methods as the developers of the project have chosen to put it in the development of the project. Token burn can occur in the following ways:

Token burn through the two aforementioned methods still have some things that are needed to be done before the burning event can happen and I will list them below.

List the benefits of token burning with a detailed explanation of each

Token burn is not only about destroying tokens but there are also reasons why that kind of functionality was included in a blockchain and it has many benefits. I will be talking about some of the benefits of token burn here.

Some blockchains burn their tokens once in a while and some burn their tokens more frequently through a predefined interval or using the auto-burn mechanism.

The reason why blockchains burn their tokens is to ensure that value is preserved for their product to attract more investors and satisfy the aim of the project. They do this to reduce the supply of the asset available for trading in the market and this makes demand pressure to be more than that of the supply.

Furthermore, all these make the tokens more worthy and contribute to the success of the project placing it in a higher rank among other cryptocurrencies.

The truth is that the first time I heard about token burn was some years ago and it was the BNB Beacon Chain and BNB Smart Chain quarterly token burn, the chains formerly known as Binance Chain and Binance Smart Chain. This is done to reduce the supply of BNB tokens in the market to make them more worthy in the crypto space.

BNB which is the native token of the BNB Chain started its burning by employing a quarterly burn mechanism where some of the BNB tokens in circulation are destroyed through the address, 0x000000000000000000000000000000000000dEaD. Burning BNB started with using 20% of Binance profits to buy back BNB and destroy it permanently.

Furthermore, one of the most iconic BNB burn events was the 17th burn in October 2021 that drove the price of BNB up to 58% after the price moved from $305 to $480, this is how token burn affects the price.

The buy-back method of burning BNB has been replaced with an auto-burn mechanism that includes BEP-95 burning where a certain proportion of the BNB earned in block validations is automatically burned and BNB Chains quarterly burn that uses a formula to calculate the burn amount.

BNB quarterly auto-burn now uses the formula, B = (N * 1000)/(P + K) where B = BNB token to burn, N = Total blocks produced on the BNB Smart Chain during the quarter, P = Price of BNB in Dollar at the time and K = Constant value- anchor price initially set at 1000. Since the burning of BNB began, a total of 38,683,447.66 BNB have been burned so far and this will continue till it reaches 100,000,000 BNB which is 50% of the total supply of BNB.

The burnsteem25 company that encourages burning 25% of your publishing revenue? Do you think it will help boost the value of steem currency in the medium term?

The burnsteem25 is a new development that was introduced to the platform this year which is about burning 25% of our earnings as authors on Steemit. It was a suggestion by a user in an engagement challenge that Steem should be burned on special days and it was made known to the user by Steemcurator01 that authors can set 25% beneficiary of their posts to @null which is a burn address on the Steem blockchain.

@null is a Steem address that is designed to burn Steem tokens, no one has access to the account because it doesn't have a private key and that means that every Steem tokens that enters it is permanently destroyed. Setting 25% to @null makes one qualify to use the tag #burnsteem25 agreeing that 25% of the total earnings go to the null account.

Yes, I agree that burnsteem25 would help boost the price of Steem in the medium term and why it is not in the long term is because Steem doesn't have a maximum supply, new Steem tokens are created into the circulation every day and one way is through the rewards that authors get from the 75% allocation of new tokens into the reward pool.

The reason I agree that burnsteem25 will help the price of Steem in the medium term is that it reduces the amount of Steem tokens that gets to the end of users which will reduce to amount that might have added to the trading assets in the market. So, this will help to maintain and boost the price of the Steem token.

Furthermore, the inflation rate on the Steem blockchain is set at 9.5% at the beginning and decreases by 0.5% annually and this will continue until it drops to 0.95%, at that time it would be hard to earn excess Steem tokens because the creation will be reduced. The time for the inflation rate to reach 0.95% is estimated to be 2031 and this is when Steem is predicted to reach its market greatness with increased value.

Before we get to the year that Steem will be so scarce, burnsteem25 will continue to maintain and boost the price of the token, hence contributing to its balanced economy and it will be better to have more people join the program to achieve better results. So, I believe that burnsteem25 is helping to boost the price of Steem in the medium term.

Token burn is an event that has been happening in the crypto space for some years now where cryptocurrencies are burnt to reduce their circulating supply, one of the results of this event is improved value for the token. Furthermore, it attracts more investors to the project which increases the adoption.

The address used for the burning is sometimes called burner or dead or null or eater and it is an address that has no private key, all assets that enter it are permanently removed from circulation. The address for burning on the Steem blockchain is @null, the burnsteem25 program is one of the ways we use to send some rewards from our post to @null and I believe that this is helping the price of Steem and I invite people to also participate in burnsteem25.

I'm very happy to participate in this contest organized by the academy. I invite @patjewell, @sahmie, and @jasminemary to participate in this contest.