Binance introduces new auto-burn mechanism for Binance Coin to replace quarterly burn cycles

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Binance, currently the largest cryptocurrency exchange in the world, has decided to discontinue its quarterly coin burn mechanism for a better, more transparent and more predictable token auto-burn mechanism for BNB, Binance’s native token. According to the announcement, the move came due to the increased demand for a healthier blockchain system from Binance Smart Chain (BSC) users and BNB communities. So far, Binance had two BNB burn mechanisms in place, one real-time burn a percentage of gas charges on the BSC and the other a quarterly burn based on Binance’s Accelerated Burn program, which is replacing the BNB auto-burn mechanism.

“We have listened carefully to the Binance Smart Chain (” BSC “) and the BNB communities – and we are proud to announce the implementation of a new BNB auto-burn process with immediate effect,” said Binance in a blog post.

Coin burning is a common mechanism by which altcoin makers control the supply of tokens in circulation. In most cases, including Binance, the process removes BNB tokens from circulation by sending them to an inaccessible wallet. The burning process will be both verifiable and objective after the new system is deployed.

Similar to Gas on the Ethereum network, BNB is Binance’s native token and is used to drive transactions on the Binance Smart Chain. However, Binance does not control or operate BSC, so BNB is supported by a community of users and delegates.

The change also means that the amount of BNB burned will no longer depend on Binance’s profit, but rather on the BNB price and BSC activity. As mentioned earlier, the change also aims to increase the level of transparency and predictability of the BNB community when conducting transactions.

The new BNB auto-burn mechanism is expected to remove about 1.69 million BNB in ​​a quarter and will stop when the total circulation of BNB falls below 100 million.

“BNB Auto-Burn will be both objective and verifiable regardless of the revenue generated on the Binance CEX from using BNB, and will be automatically adjusted by basing the burn amount on the price of BNB, which in turn reflects that Supply and demand for BNB and the number of blocks produced during a quarter, calculated based on on-chain information, ”the announcement said.

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