Let's say that I created a token using remix, and this token has an initial supply of 1 million, and half of that is sent to the contract address. Those 500k on the contract address should become unusable, unless some additional functionality was added while creating the token to remedy that? So I'm basically guessing that these 500k cannot be bought/sold - traded at all, even if it's listed on an exchange, since the exchange should be using its own tokens from the liquidity pool? I've found this link saying that sending tokens to contract address makes them unusable. So the only saving grace you could do to a contract is to make it deflationary and generate new tokens if/when needed?

  • A token is just a contract, so I'm a bit confused what you mean Commented Aug 1, 2021 at 13:38
  • when you send tokens from one user to another, the tokens stay within the same contract, they aren't really being sent anywhere like transmitting a network packet. It is just a substraction of balance from one variable and addition to another, within the same contract.
    – Nulik
    Commented Aug 1, 2021 at 18:31
  • but if the contract has been programmed to manage tokens, the contract can make them usable in some way or another
    – Nulik
    Commented Aug 1, 2021 at 18:32
  • @LauriPeltonen & Nulik - that was really helpful in general, made me realize a few things, especially the wording "A token is just a contract" - because it's really that simple. I've accepted the answer below as that was exactly the thing I was wondering
    – Mr Red
    Commented Aug 3, 2021 at 8:27

1 Answer 1


If the contract owns some of its tokens, then it can do whatever it wants with them.

If the contract never uses those tokens (i.e. there is no code in the contract for this), and doesn't have any upgrade mechanism, then the tokens are effectively burnt.

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