Binance announces implementing a new auto-burn procedure for Binance Coin (BNB)
Going forward, Binance will be implementing a new automated protocol for removing Binance Coin (BNB) tokens from circulation–replacing the old quarterly burn procedure.
The last BNB quarterly burn removed 1.335.888 tokens from circulation, according to the crypto exchange’s official blog announcement.
According to the announcement, the decision to implement the new BNB auto-burn procedure was based on Binance Smart Chain (“BSC”) and BNB communities’ feedback.
Introducing #BNB Auto-Burn: a new protocol for quarterly #BNB burns.➡️ https://t.co/ME2c8Nv5hZ pic.twitter.com/AYP0C9Jlso— Binance (@binance) December 22, 2021
As the native cryptocurrency, BNB fuels the transactions on the BSC blockchain, while its governance utility enables participation in decentralized on-chain decision-making.
BNB tokens are being removed from circulation by the two main burn mechanisms–the real-time burn and the quarterly burn.
As introduced in BEP95, a portion of the transaction gas fees spent on BSC is burnt in real-time. Since the ‘Bruno’ upgrade implementation in November, BSC burns roughly 860 BNB on a daily basis.
In addition, BNB is burnt quarterly–with the last quarter marking the 17th burn that removed 1.335.888 BNB from circulation.
According to the announcement, effective immediately, the quarterly burn which was up until now adjusted based on the revenues from the token’s usage, will be replaced with the new automated mechanism.
“BNB Auto-Burn will be both objective and verifiable, independent of revenues generated on the Binance CEX through the use of BNB,” said Binance, while explaining that the new mechanism will automatically adjust the burn amount based on the token’s price, and the number of blocks produced on BSC during the calendar quarter.
The new automated burn mechanism will be halted when the total circulation of BNB drops below 100 million, added the announcement.
“Here at Binance, we believe that with the introduction of the BNB Auto-Burn, the next phase in the development of BNB and BSC has begun,” said the exchange, while thanking the communities for the “unwavering support and contributions to the ecosystem.”Source