What causes a hole in banshee piston?

Detonation or pre-ignition. ALWAYS use fresh gas. Use good quality oil (no weedwacker oil). Could also be caused by a lean air-fuel ratio. Have carbs serviced to ensure no debris in fuel system. Make sure there there isn't any cracks in the rubber pieces between carbs and engine where unwanted air can be drawn into engine. Make sure engine reed and cylinder base gaskets are not leaking. Carbs may need to be re-jetted if any modifications were made to intake/exhaust system. Make sure spark plugs are correct heat range (NGK B8ES).