TL;DR
Token burning permanently removes tokens from circulation by sending them to an inaccessible address, reducing total supply and theoretically increasing scarcity.
On Solana, burning is done through the SPL Token program’s burn instruction, which reduces the total supply of the token. The tokens are destroyed, not just sent somewhere — they’re subtracted from both the holder’s account and the mint’s total supply counter. Some tokens use a burn address (a wallet with no known private key), but the proper method is the programmatic burn instruction.
Burns reduce circulating supply, which can increase price per token if demand stays constant. LP token burning is common — when a Pump.fun token graduates, LP tokens are burned to permanently lock liquidity. Some protocols implement buy-and-burn mechanisms using revenue to purchase and destroy tokens. Burn events are also used as marketing — announcing a large burn can generate buying interest.
A burn only matters if it’s permanent and significant. Burning 1% of supply has negligible impact. LP burns are more meaningful because they guarantee liquidity can’t be removed. Check burns on-chain through block explorers — the burn transaction should show the tokens being removed from total supply, not just transferred to another wallet posing as a burn address.