It might be frightening to learn how to burn an nft because it is unknown how it works or the objective of burning an nft, along with what makes it popular to do. Therefore, we provide an in-depth guide addressing all you need to know about burning NFTs.
This guide explains what happens when an nft gets burnt and why brands intentionally burn non-fungible tokens.
Let’s start with the basics and dive in:
What Does It Mean to Burn an NFT?
Burning is transferring ownership of an object from the blockchain to a public address that no one can access. It originated from crypto-currency when a token gets removed from circulation.
These non-fungible tokens transfer to an NFT burn address that no one can access.
Collectors have various reasons for burning an nft; however, the most common is when a token’s worth declines below a few dollars due to their large mint number like 4495/4500.
It’s challenging to sell because there’s such a high supply of them via the marketplace, and the mint is furthest from the top ten.
What Happens To Burnt NFT Tokens?
Once issued on the blockchain, non-fungible tokens are immutable. Therefore, you must burn your NFT if you want to get rid of it.
The proof-of-burn (PoB) consensus method allows users to burn their tokens. PoB manages this by limiting the number of tokens that may get burned, reducing mining activity.
The act of burning an NFT does not destroy it or delete it; instead, it renders it useless in the future. Because burning an NFT is irrevocable, make sure you understand the risks.
Why Brands Are Burning NFTs (Intentionally)
1. Increase Scarcity for the NFT Project
It’s valuable to collectors and project owners for an nft collection to sell out quickly upon release. If it fails to sell out, a project owner can decide to burn the unsold inventory.
Which immediately increases the value of the other tokens that have already sold and keeps the collectors happy.
However, the nft community debates about using this tactic since it creates a lot of confusion among collectors around the actual value of the digital collectible.
It can also frustrate those who couldn’t get the collectible before the burn, especially if they burn unsold inventory too early.
Sometimes brands feel by burning off the remaining unsold non-fungible tokens; they can get to the ‘reveal’ stage quicker.
However, if not communicated to the nft community properly, it can be a costly mistake as transparency remains a priority for collectors.
2. Create New Opportunities
Brands are using burning NFTs as a marketing activity to promote their collections further while introducing more complex scenarios for deeper engagement and, for example, providing the original owner of the nft the option to burn or destroy it to obtain another item.
Other tactics offer the original owner to burn for a physical collectible like a print, a signed autograph, or memorabilia.
Not only being able to trade a burned nft for a physical item, but also digital items like cryptocurrencies within their exclusive platform.
Impacts Burning NFTs Can Have on a Project
It’s important to remember these digital collections have their mini economies, and burning to reduce supply is helpful to stimulate them.
However, it can create a deflationary spiral for the entire collection’s worth if not careful.
For example, during a recession, the average price of most non-fungible tokens declines, leading to a deflation cycle, which happens when price cuts lead to lower output levels, which leads to lower pay, which leads to lower demand from businesses and consumers.
Does the Creator Get Notified About NFT Burns?
The short answer: No. These platforms make it easy to identify the amount of total non-fungible tokens a project or collection has at the moment.
So, for example, you can see if there are 320 tokens available and when you go to the project again after a burn, you’ll see there are only 319 tokens.
However, some nft collections take burning to the next level by offering an nft burn tracker. For example, VeeFriends has a burn tracker (also known as leaderboard) counting burn NFTs within the project.
It tracks the total token supply, total tokens burned and total tokens advertised for sale.
A component called “burn metrics” also breaks down the number of burnt tokens per property (Token Names, Frames, and Spectaculars).
Would a Creator Know When You Burn the NFT?
The burning of crypto tokens is recorded on the blockchain, allowing investors to observe and authenticate it.
In addition, anyone can use an nft explorer-like Etherscan to determine the amount of burn nfts available per project.
How Do You Burn an NFT on OpenSea
You can not delete a non-fungible token; however, you can burn or destroy the non-fungible token to prevent others from owning it.
Once you’ve burnt an nft, no one else can claim ownership of that token.
The steps for burning an nft are and work across blockchains.
- Click the “Transfer” button on the item’s page and input the burn address to burn an NFT on OpenSea. You can burn an NFT by sending it to an nft burn address: 0x000000000000000000000000000000000000dEaD
- Complete the transfer and confirm the transaction using your wallet.
- Enjoy not having that non-fungible token in your collection anymore.
Can Someone Burn My NFT?
Short answer: No. Only the owner of the nft can burn it. No one else will own the non-fungible token unless you trade or sell it to a different smart wallet.
Only those who have complete ownership over the NFT can burn it. If you send your non-fungible token to a friend or someone else, forfeiting your ownership, someone else can burn it.
How Much It Costs to Burn an NFT
Expect to pay gas fees from $2 to $25 because it’s a transaction on the blockchain. In addition, only owners can essentially send NFTs to the burn address to reduce the supply available for other collectors.
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