Binance stated on Thursday, December 23, that the BNB Auto-Burn feature will be implemented with immediate effect in the Binance Smart Chain (BSC). Also, and BNB communities, as part of one of its significant announcements.
Currently, BNB is the native coin that powers Binance Smart Chain transactions (BSC). This is very similar to the gas cost that Ethereum users pay. In addition, BNB is to engage in BSC’s decentralize On-chain governance.
For the time being, the Binance blockchain uses two major BNB token burning processes. Since the implementation of BEP95, a portion of the BSC gas fee has being burn real time. Since its Bruno upgrade last month, BSC has been burning 860 BNB tokens every day.
Furthermore, Binance burns BNB tokens every quarter, with the most recent quarter eliminating 1,335,888 BNB from circulation. BNB Auto-Burn will now take the place of the quarterly burn. According to the official announcement:
“Going forward, the quarterly burn will be replaced with BNB Auto-Burn to provide greater transparency and predictability to the BNB Community. BNB Auto-Burn will be both objective and verifiable, independent of revenues generated on the Binance CEX through the use of BNB, and will be automatically adjusting in that the burn amount will be based on the price of BNB, which, in turn, reflects the supply and demand for BNB, as well as the number of blocks produced during a quarter calculated on the basis of on-chain information.”
Binance states the BNB auto-burn protocol is on halt whenever the overall circulation of BNB falls below 100 million. In its formal statement, BNB explains the entire logic behind the auto-burn.
When you switch to this new BNB auto-burn option. Then, the quantity of BNB burned will no longer be determined by Binance’s profit.
It will, however, by the price of BNB as well as the level of BSC activity.
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