Harnessing Digital Scarcity: The Benefits of Burning Tokens in Cryptocurrency Projects

Article is updated upon the release of XDB CHAIN v19 BURN of 1,000,000,000 XDB CHAIN native coins

In the ever-evolving world of cryptocurrencies, innovation is the key to success. One such innovation that has been gaining traction in recent times is the concept of burning tokens to introduce digital scarcity.

Following the introduction of the unique value proposition of Branded Coins (BCO) which brings its unique buyback and burn mechanism (BBB), XDB Chain aims to improve the real-world utility and the supply-demand value proposition of the XDB coin by leveraging its powerful blockchain platform. This will be progressive rolled out as of the upcoming launch of the XDB Chain Mainnet (v19). The introduction of Branded Coins Offering (BCO) will enable businesses and entities to create their own branded cryptocurrencies on the XDB Chain while supporting the overall ecosystem through an allocation of each new Branded Cryptocurrency supply for regular buyback and burning of XDB coins of up to 2,5% of the entire BCO supply. This mechanism will foster scarcity and provide incentives for all stakeholders such as market participants and token community by strengthening the economic viability and attractiveness of the XDB Chain network as the layer-of-choice.

This strategic approach can have profound implications for the supply dynamics and overall value proposition of a cryptocurrency project. In this article, we will explore the benefits of burning tokens in a cryptocurrency supply and how it can be a game-changer in creating digital scarcity.

Enhanced Digital Scarcity
At the heart of token burning lies the idea of enhancing digital scarcity. Cryptocurrencies that implement this practice create a sense of rarity and exclusivity around their tokens. Submitting a transaction with zero weights and thresholds invalidates keys, including the master key, thereby preventing any further transactions and token creation. This feature is primarily geared towards developers and can significantly impact the overall supply of the cryptocurrency.
Developers can find detailed information on how to utilize this feature in the official XDB Chain documentation, available as of the launch of XDB Chain v19.

Reducing Supply and Increasing Value
Burn addresses play a pivotal role in reducing the supply of a cryptocurrency. These addresses can be verified by API users, ensuring transparency in the burning process. Every unit of the cryptocurrency sent to these burn addresses is permanently removed from circulation. This deliberate reduction in supply can have a profound effect on the token’s value. With fewer tokens available, the ones in circulation become more valuable, potentially leading to an increase in price.

How Assets are being created on Network
In order to distribute a custom asset or token on the XDB Chain network, three unique accounts will be used. First, is the source account. The source account is the account of the entity looking to create a new token. Second is the issuing account. The issuing account is created by the source account as a mechanism to create new tokens. The third account is the distribution account. The goal of a distribution account is to act as the mechanism for distributing tokens to the public.

Most of the XDB Chain documentation is centered on financial institutions as anchors. An anchor is an entity that acts as a bridge between existing currencies and the XDB Chain Network, and involves setting up systems like a compliance server and a bridge server. It is not necessary to become an anchor in order to create custom assets and tokens on the XDB Chain Network.

The following presents a breakdown of the transactions required to create a custom token. The transactions can be translated to API requests or can be executed using XDB Developer Portal.

How the “BURN” address is created (Technical Instructions):
Here below, Developers can find the Technical instruction to create a “locked address” which can be used to “burn” tokens, meaning that once transferred will no longer be usable into any future transaction and will be locked forever.

Issuing account

Set Option — Thresholds & Weights: remove all weights and thresholds

master weight: 0

low threshold: 0

medium threshold: 0

high threshold: 0

Signers: issuing account

Transaction A is created and submitted to the network by the issuing account. By setting the weights and thresholds all to zero, this creates a lockout scenario. All keys, including the master key of the account, will become invalid keys. Locking an account prevents any further transaction to be created using this account, consequently meaning that no more tokens can be created. The XDR form of this transaction can be published once submitted to show proof of the account being locked.

These technical instructions provide a clear step-by-step process for implementing token burning through setting weights and thresholds to zero, effectively locking the account and demonstrating the proof of account lock through the XDR form of the transaction.

Official BURN Address and impact on Supply:

The Official Burn address of the XDB CHAIN following v19 launch is

GC7GH763TKNVOWOOLOZR4ZYHHDSJIYJPP746ZFNEQZLJHB244WBBBBRN which has now a balance of 1,025,629,980 XDB CHAIN native coins (XDB). We are excited to announce that coins from the XDB CHAIN Treasury have been reduced by 1,000,000,000 XDB CHAIN native coins (XDB) accordingly. Evidence from XDB CHAIN logs below

In the coming days, we will introduce a dedicated disclosure page on our website, xdbchain.com. This page will provide comprehensive information related to tokenomics and all the above and below considerations about the reduction of total supply, ensuring full transparency and auditability for the benefit of the XDB CHAIN Community.

The previous BURN address has not been migrated to XDB CHAIN v19 network and doesn’t have any active balance on XDB CHAIN. Previous BURN address not migrated on XDB CHAIN is:


The XDB CHAIN official BURN address has been configured as specified above, with private keys effectively rendered unusable, making it impossible for anyone to control this address.

Tokens sent to this address become permanently useless, effectively removing them from circulation. This strategic use of a burn address ensures that the cryptocurrency’s supply is genuinely reduced, contributing to the overall goal of introducing digital scarcity within the XDB Chain ecosystem.

This strategic move simultaneously reduces both the circulating and total supply, transitioning from 19,974,370,019 to 18,974,370,019 XDB Chain native coins.

Please note that some tracking websites (CoinMarketCap) won’t reduce circulating supply but only total token supply as for them all TREASURY tokens are not considered in circulation

This method used to secure the token burn address is of utmost importance. In the case of the XDB Chain protocol, a built-in feature is designed to prevent future payments to the burn address. This feature is not only secure but also ensures that the burning process is permanently authorized by the account holder. This level of security and trust can attract a variety of new stakeholders bolstering the project’s credibility.

Burning tokens in a cryptocurrency project is a strategic move that can have far-reaching benefits. It introduces digital scarcity, reduces supply, increases value, and enhances the overall security and trustworthiness of the project. As the cryptocurrency landscape continues to evolve, innovative approaches like token burning will likely play a crucial role in differentiating successful projects from the rest. To learn more about how to implement token burning in the XDB Chain ecosystem, developers can refer to the upcoming page on xdbchain.com website which will be released in the coming days.

Website | Twitter | Instagram | LinkedIn | Facebook | Telegram | Announcement | Discord |

Share the Post:

Related Posts

Branded Coins

CBPAY Airdrop Announcement

In an era where real world assets are redefining financial interactions, CBPAY stands at the forefront, pioneering an inclusive, community-driven payment ecosystem. With the eagerly

Read More »
XDB Chain

Contact us

Fill out the form below, and we will be in touch shortly.


Fill out the form below, and we will be in touch shortly.