Token loss refers to the irreversible disappearance or inaccessibility of digital tokens from a user’s control. This can occur due to various reasons, including forgotten private keys, phishing attacks, or smart contract errors. Once tokens are lost, they are typically unrecoverable, resulting in a permanent reduction of supply or user holdings. It represents a definitive forfeiture of digital assets.
Context
News concerning token loss often details large-scale incidents where users collectively lose significant amounts of digital assets due to hacks or protocol failures. Reports may also cover individual cases of forgotten seed phrases or accidental transfers to incorrect addresses. These events serve as stark reminders of the self-custody responsibilities and inherent risks in managing digital assets.
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