Binance, the world’s largest crypto exchange, has announced that it is going to replace its current quarterly burn mechanism with a new Binance Coin (BNB) Auto-Burn protocol.
The exchange updated its quarterly burning mechanism for BNB coins in response to community requests. Above all, they claim that this will give their community more “transparency and predictability.”
Introducing #BNB Auto-Burn: a new protocol for quarterly #BNB burns.
➡️ https://t.co/ME2c8Nv5hZ pic.twitter.com/AYP0C9Jlso
— Binance (@binance) December 22, 2021
BNB will be burned automatically as a result of this, using a calculation based on on-chain statistics of the average BNB price and total blocks generated. Therefore, as the price of BNB falls, the amount of BNB burned rises to ensure that the value eliminated remains consistent and unaffected by market fluctuations.
Binance has committed to burn 100 million BNB since the launch of the coin, which is half of the total supply. The Auto-Burn will be pulled out whenever the total circulating supply of BNB falls below 100 million. The company withdrew 1,335,888 BNB out of circulation in the most recent quarterly burn, which was worth $639,462,868 at the time. Binance burned $400 million worth of BNB tokens in the 16th quarterly burn event earlier this year.
“The BNB Auto-Burn announcement is the next step in BNB’s journey. It will help the BNB community flourish by delivering greater autonomy, transparency, and predictability,” said a spokesperson from the exchange.
Binance Coin (BNB) is the native token of Binance Blockchain. In 2017, it was released as an Ethereum token, but in 2019, it was moved to its own network. BNB can be used on the Binance exchange to trade and pay fees. Also, as of January 2018, the Binance Exchange is the world’s largest cryptocurrency exchange, conducting over 1.4 million transactions every second.
BNB has a variety of applications outside of the exchange, including:
- Paying transactions fees on the Binance Exchange
- Credit card payments
- Payment processing
- Booking travel arrangements
- Loans and transfers
According to CoinMarketCap data, BNB is the third-largest coin in terms of market capitalization, behind only Bitcoin (BTC) and Ether (ETH). It was worth around $548.10 at the time of writing.
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