Burn
Burning removes a portion of a tokens supply from circulation with the expectation of increasing the value of the tokens remaining in circulation. Since burning decreases outstanding supply it is referred to as a delationary rewards mechanism.
The reason it’s deflationary is because most tokens employing burns issue a fixed supply of tokens at launch. Then use burning to reduce this fixed supply of tokens over time.
Binance pioneered this approach with the launch of the BNB token. A portion of revenues generated by Binance’s operations are used to buyback and burn BNB tokens.
BNB holders are rewarded from the reduction in the amount of BNB outstanding. Instead of being rewarded with additional tokens for performing valuable services like staking or mining.
Burned tokens are not actually destroyed. Instead they are sent to a wallet outside of the network designed with the single purpose of being able to receive coins but not send them anywhere. The wallets cannot send tokens out because they lack private keys making them incapable of executing any further instructions once coins are received.
Conceptually, token burns are similar to stock buybacks. When a publicly traded company feels the market is undervaluing its stock.
It uses some of its cash to buy back outstanding shares. Reducing the amount of shares available and increasing the value of the remaining ones.
Similarly, Cryptoassets can use some of the fiat they make from operations to buy back a portion of their outstanding token supply. Send it to a burner wallet and increase the value of the remaining tokens outstanding.