Why did Binance burn over half a billion dollars worth of BNB? What is the strategy behind periodic burning? Learn more in this article!
Burning More Than 2M BNB coins
In its 21st quarterly burning event, Binance eliminated BNB coins worth $570 million via the exchange’s Auto-Burn feature. It was the second-largest $BNB burn on record, with a total of 2.07 million coins burned.
Apart from reducing the token supply, the burn also helped offset the losses Binance had to bear from the recent bridge exploit, where hackers tried to make off with 2 million BNB coins they managed to create. The Auto-Burn formula decides how much $BNB to burn based on the number of current BNB Chain blocks and their price.
Periodic Burning by Binance
Ever since the launch of BNB Chain in 2017, Binance has committed to removing 100 million BNB from circulation, which amounts to half of its total supply. During the previous quarterly burn in July 2022, Binance eliminated BNB worth $444.6 million.
While the burn did not immediately impact $BNB’s price, the coin-burning strategy is used to reduce the circulating supply, promote scarcity and increase the coin’s value in the long run.
So far, Binance has burned nearly 39 million BNB coins in total, according to BNBBurn.info.
Many other projects use similar strategies, including Ethereum with its EIP-1559 update.
What Is BNB Chain:
Previously known as the Binance Smart Chain (BSC), BNB Chain is a community-driven, decentralized, and censorship-resistant blockchain that is powered by Binance. It consists of BNB Beacon Chain and BNB Smart Chain, EVM compatible and facilitating a multi-chain ecosystem. Through the concept of MetaFI, BNB Chain aims to build the infrastructure to power the world’s parallel virtual ecosystem.
Find more about BNB Chain here:
Source : bsc.news
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