Fee burn
Every block, a share of the gas fees paid on that block is sent to the burn address. Nobody holds the key to that address, so the coins that land there are out of circulation permanently.
The burn address
0x000000000000000000000000000000000000dEaD
There is no private key for this address. Coins sent there are gone in the only sense that matters on a blockchain: no signature can ever move them.
The burn ratio
The share that gets burned is a parameter called burnRatio on the validator set contract. It is expressed in basis points, so a value of 1000 means ten percent of the fee is burned and the rest goes to the block producer.
Because it is a parameter and not a constant, it changes only through governance: a proposal that calls GovHub.updateParam("burnRatio", ...), passes the vote and clears the timelock. Nobody can turn the burn up or down on their own.
What this does to supply
The burn is usage driven. A quiet chain burns almost nothing; a busy chain burns a lot. It is not a schedule that runs whether anyone shows up, which means the burn rate is an honest signal of how much the chain is actually being used.
It is also not a promise about price. The burn removes coins; what that is worth is up to the market.
Watch it happen
l2pburn.info reads the burn address balance, the burn ratio and the last indexed block directly from the chain, and shows the burn per day. Every figure there can be checked against the explorer.
- Using the burn site walks through the page
- Where the burn figures come from shows how to verify each number yourself
- Questions about the burn answers what people actually ask