NFTs were developed as irreversible assets that run on a blockchain with code. What transpires, though, if an NFT needs to be destroyed? When it comes to blockchain technology, there is no such thing as a delete button. The burn process kicks in at this point.
This article will demonstrate all you need to know about burning NFT.
What is Burning an NFT?
Burning a non-fungible token means eliminating it. Burned NFTs are transmitted to an address that can be verified as being unspendable, subsequently removing your NFT from the blockchain. Nevertheless, the blockchain ledger will still contain the transactions that took place before the fire.
There are several methods for NFT burning. The purpose is to reduce the number of tokens currently in circulation. Although it may appear strange, burning tokens only makes them ineffective in the future rather than really destroying them. Sending the NFTs to an address known as a “eater” or “null” is one of the most prevalent methods. Because the transaction was irreversible, the tokens transferred to a null address were deemed useless.
The NFT burn concept emerged in the crypto-community. The concept was that if somebody who owned a significant amount of a particular cryptocurrency sent the tokens to a null address, it would reduce the supply and boost the value of the token.
Why Burn Your NFT?
The concept of burning originated in the crypto community. A cryptocurrency’s value can theoretically be increased by transmitting a percentage of its holdings to a vacant address. NFT burning automatically reduces supply, which raises supply.
When an NFT is eliminated, its value may rise because the supply is reduced, similar to how cryptocurrency is damaged. If done correctly, many people use this to boost the long-term value of their collection.
The WZRDS NFT is an example of an NFT project that hasn’t had much success with the NFT burn process. Token holders were given the option to vote to delete WZRDS NFTs that dropped below a certain price level. Staking and cold storage were the only two choices for holders who valued the security of their WZRDs.
As a result, almost 5,000 of the entire 10 thousand WZRDs have been staked, and over 1,000 have been burned. The minimum price reached a peak of 3.2 ETH on July 12 after beginning at 0.15 ETH on July 8. The raised floor price, however, immediately decreased after the morning and is now at a pitiful 0.02 ETH.
Identify and fix flaws.
Failures are prevalent in NFT projects. Creators will sometimes try to anticipate any potential pitfalls. Whatever the reason, project producers can employ the burning process to solve issues.
Tether is not an NFT project, yet it is accountable for one of the most infamous fires in history. In 2019, the dollar-pegged stablecoin made a $5 billion mistake by accidentally manufacturing extra stablecoins. They burned the tokens as soon as they recognized what was wrong. Tether fixed its oversupply problem quickly by withdrawing the excess token from circulation.
Burn addresses are more widely employed in the cryptocurrency world to remedy mistakes, but they are also the only way to fix supply problems with NFTs.
Certain NFT projects have incorporated a burn mechanism that enables holders to choose between holding their NFT and swapping it for another asset of equal or greater value. Book Games NFTs by Gary Vaynerchuk are an excellent example of this gamified technique. In the beginning, 125,000 tokens were available in this amusing and one-of-a-kind game. Only 102,000 NFTs are now accessible.
The only method to mint any of the 15 new characters in Series 2 was through the VeeFriends Series 2 new character permit list. As a result, like with Book Games Exchange investors, NFT holders willingly destroyed their NFTs in order to gain a different property.
NFT burning can also help NFT projects increase trust and dependability. This is extremely crucial throughout the initial stages of an NFT’s life. To demonstrate enhanced supervision and security to investors, some developers prefer to burn unsold tokens following an offering. Token burning can be an expensive operation for owners due to high gas prices.
The Cost To Burn An NFT
The price of NFT burning is the same as it is for any other transaction on a crypto exchange or platform.
Those that use an NFT must pay a gas fee. A gas cost is similar to a transaction fee on a blockchain, such as the Ethereum blockchain. Gas costs are what customers pay to cover the amount of energy required to perform a blockchain transaction.
Your gas fee will be determined by numerous factors, including the time of day you make the transaction. If the system is congested, you need to spend extra gas to get your operations processed.
Other elements that influence the cost include the quantity of NFTs you want to burn (the bigger the number, the more network energy is necessary) and the currency itself, which fluctuates in value.
If you’re looking for an estimated price in dollars, it could cost anywhere from $5 to $100 to burn your NFT. As previously stated, there are numerous variables, making it impossible to provide an exact figure until there is an uniform cost unrelated to gas fees.
Just keep in mind that if you do not have enough cash in your account to pay the gas fees, your burning transaction will be denied.
How to Burn an NFT?
NFT burning may appear difficult at first, but fortunately, NFT marketplaces make it simple for any individual to burn their non-fungible token if necessary.
Log in to the platform where you minted your NFT to burn it. Choose the NFT you want to burn, then go to the options menu and click burn token. In some circumstances, you may need to browse to your contract and select “write contract,” then look for the burn procedure, enter your token, and press the write button.
The number of costs for the burn will be levied to you, and the token will be withdrawn. Remember, this is irreversible, so assure you want to do it.
The following sequence usually occurs during a token burn:
- A possessor must engage the burn function to burn a specific number of NFTs.
- The contract then evaluates to determine if the user has the required number of tokens and the required gas fee.
- If the gas fee exceeds the amount in your account, the operation will fail and the NFT can not burn. If you have enough NFT in your pocket to cover the gas price, you must sign the associated contract to approve the transaction before the NFT is permanently wiped.
- When an NFT gets burned, it is recorded on the blockchain as a public, irreversible transaction. This transaction is recorded in the blockchain, and the NFT is rendered unusable.
Can You Revive a Destroyed NFT?
Yes, it is possible to inadvertently burn an NFT. There have been numerous reports of people inadvertently burning an NFT by sending it to a black-hole address. An NFT owner may accidentally send the black hole as the default address.
Nevertheless, while it is widely assumed that blockchain creators have access to black hole addresses, there has been no proven retrieval of burned NFTs and tokens. Not only would this endanger the integrity of a blockchain, but it would also possibly discharge millions of tokens into an unpredictable market. This means that a burnt NFT is now irreversible.
NFT burning is merely another way of saying destroy it. Because we can nit delete an NFT from the blockchain, the next best option is to transmit it to an address that nobody can access. Reasons for destroying an NFT include limiting supply to raise the value of a collection, fixing errors, and rewarding trading.
Does it still frighten you now that you know NFT burning does not literally imply lighting it on fire? Personally, the concept still frightens me.