n most crypto conversations, the phrase “token burn” is tossed around like a marketing buzzword. But in the DePIN ecosystem — Decentralized Physical Infrastructure Networks — buy & burn is powerful.
In this lesson, Tom Trowbridge, co-founder of Fluence and author of the DePIN Token Economics Report, breaks down how revenue-backed token burns are becoming a core strategy for long-term value creation and investor trust.
What Is Buy & Burn?
At its core, buy & burn means this:
- A project generates revenue
- It uses that revenue to buy its own token on the market
- Then it burns (permanently destroys) those tokens
The result? Reduced token supply and increased value for the remaining holders.
This is very similar to how public companies do share buybacks — reducing the share count to increase value per share. But in crypto, burning is final, irreversible, and fully visible on-chain.
Who Started It?
The first projects to implement buy & burn at scale were centralized exchanges like:
- Binance
- Huobi
- OKX
Each took a portion of their trading revenue and used it to reduce token supply — successfully increasing value and community trust.
Even Ethereum introduced a burn mechanism (EIP-1559), although its results have been inconsistent due to unpredictable revenue.
Why Buy & Burn Works So Well for Physical DePIN
There’s a key difference between digital DePIN (like cloud compute or storage) and physical DePIN (like mobility data or Wi-Fi infrastructure):
- Digital DePIN projects often don’t generate direct revenue — payments go straight from user to provider. That limits their ability to buy and burn tokens.
- Physical DePIN projects, however, monetize large-scale datasets — and generate real income.
That revenue becomes the fuel for buy & burn — and the foundation for token demand.
In other words:
The project itself becomes the biggest buyer of its token.
Why 80% Buy & Burn Might Become the Standard
Across DePIN, the percentage of revenue allocated to token burning varies wildly — from as low as 5% to as high as 100%. But according to Tom, we’re likely to see that number stabilize around 80%.
Here’s why:
1. Sustainable Demand Without Speculation
Projects that consistently buy and burn with revenue don’t need to chase speculative investors. They generate organic demand from their own success.
2. Built-In Transparency
On-chain buy & burn acts like public proof-of-revenue. No audits, no quarterly reports — just visible data. If a project claims $1M in revenue but only burns $100K in tokens, that’s telling. But if it burns $800K, investors notice.
3. Team Alignment with Token Holders
If the team owns tokens and the protocol consistently burns a big chunk of revenue, their incentives are aligned with holders. Anything less creates potential misalignment — or worse, doubt.
Final Thought
In a sea of token models that rely on hype or speculation, buy & burn offers something rare: mathematical simplicity and emotional trust.
When done right, it:
- Creates value for long-term holders
- Offers transparent, revenue-based proof
- Aligns incentives across the ecosystem
And in the world of DePIN — where infrastructure meets crypto — it may become the default.
