Binance, a leading cryptocurrency exchange, has revealed the destruction of more than 2.06 million $BNB tokens, worth more than $600 million at the time of writing.
Binance announced that a total of 2,064,494.32 BNB were burned in a transaction, with a total of 7,181.03 tokens being burned from the cryptocurrency trading platform’s Pioneer Burn Program, in which Binance counts as burned BNB tokens that users have lost after sending them to unrecoverable addresses, and covers their losses with BNB that was set to be burned. As part of the auto-burn system, 2,057,313.29 BNB were incinerated.
Binance’s $BNB burning mechanism is intended to help gradually lower the cryptocurrency’s supply from 200 million to 100 million. The system has undergone various revisions over time, in part to aid expedite burning after the price of $BNB skyrocketed.
So far, the bitcoin exchange has burned 21% of its total capital.
It’s worth mentioning that burning tokens entails sending them to black hole addresses, or addresses that no one on the network controls. Because no one controls these addresses, the tokens in them are permanently removed from circulation, reducing the circulating supply of a cryptocurrency.
Aside from Binance’s quarterly auto-burns, the BNB Chain, the primary network of the $BNB coin, launched BEP-95 in October 2021, which adds another deflationary feature to the cryptocurrency by burning a fixed ratio of each block’s gas fees collected by validators.
The specific ratio being burned through BEP-95 is governed by on-chain governance mechanisms, and these burns are expected to continue even after Binance has met its target of burning half of the total supply of $BNB.
Binance stated in its release that 145,000 tokens have been burned via the BEP-95 mechanism since its inception. However, an incident influencing the BNB burn happened in the last quarter, when an abuse of the BSC Token Hub bridge resulted in the generation of “approximately two million BNB.”
The creation of new tokens increased BNB’s maximum supply to 202 million, yet the BNB Community’s validators soon burned 1.02 million of those tokens. The remaining tokens are scheduled to be burned using the methods mentioned above.
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