Binance latest BEP-95 upgrade introduces a real-time token burning mechanism
Binance Smart Chain announced its exclusive Binance Evolution Protocol, BEP-95, that will facilitate a real-time burning mechanism on the BSC network, which according to the firm will make BSC more decentralized by radically escalating the burning speed of BNB.
The BEP-95 real-time burning system will be limited to the activity on the BSC network, and it will continue to decrease the BNB supply, even after achieving the target supply of 100m BNB in circulation, which in turn will hike BNB value due to higher demand. However, the Press Release specified that the upgrade is still in the drafting stage.
“The BSC network can speed up the BNB burning process and improve its intrinsic value by burning a portion of gas fees. The BNB holders will decide how to dispatch the BSC gas reward. While implementing this BEP might decrease the total amount of BNB that validators and delegators receive from staking, the fiat-denominated value of their rewards may increase. This burning mechanism would further reduce BNB supply; thus, increasing demand would drive the BNB value higher.”
BEP-95 Validators’ burnRatio
The exchange platform noted that each block will burn a fixed ratio of the gas fee collected by the validators, and the burning ratio will also be adjustable through governance. The burning ratio governance parameters will be mentioned in the ValidatorSet Contract. This means that at the end of each block, the Validator will be required to sign a transaction to bring forth the deposit function of the contract to further transfer the gas fee. The initially proposed burn ratio is 10 percent.
Furthermore, Binance mentioned that the process to change the burnRatio will be determined through a democratic proposal and vote system by BSC Validators based on their voting power (staked BNB). Every community member will have the opportunity to propose a change in the parameters, and the implementation will occur post a minimum deposit of 2,000 BNB on the mainnet.
“This will allow the validators to vote on the proposal; all BNB is returned after the proposal has been voted on. The BSC validators can vote “for” or “against” based on their voting power.”