Definition ∞ Buyback and burn is a deflationary mechanism where a project repurchases its native tokens from the open market and permanently removes them from circulation. This process reduces the total supply of the token, aiming to increase its scarcity and potentially its value. It is a common strategy employed by decentralized protocols to manage token economics. The reduction in supply can positively impact the remaining tokens’ market price.
Context ∞ News articles often report on projects implementing or completing buyback and burn programs, detailing the amount of tokens removed and the impact on tokenomics. The effectiveness of these programs is a frequent subject of discussion among investors and analysts. Such events are closely watched for their potential influence on token price and overall project stability.
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