Cryptocurrency exchange Binance reported this Thursday (13) that it has held its 21st quarterly burn of BNB tokens as scheduled. In this burn, Binance eliminated more than 2 million units of the digital asset from the market. In reais, this is equivalent to around R$3 billion in BNB.
BNB is a native token that “feeds” transactions on the BNB Chain. Furthermore, the digital asset is required to participate in the decentralized on-chain governance of the BNB network.
Binance BNB Token Burning System
According to the exchange, the burn includes the Auto-Burn feature, the Pioneer Burn Program, and a portion of the gas fees on all transactions. According to Binance’s note, approximately 5,000 tokens were burned through the Pioneer Burn Program – created about two years ago. This program allows users who have mistakenly sent some of their tokens to write addresses to retrieve a part of them.
The most recent burn, the last of the year 2022, removed more BNB tokens from circulation than the previous one in July. The value is also higher now, R$ 3 billion against R$ 2.3 billion. As explained by Binance, the number of tokens removed is automatically calculated according to the Auto-Burn formula. The formula takes into account the price of BNB, which in turn reflects supply and demand for the token, as well as the number of blocks produced during a quarter calculated based on on-chain information. Binance introduced this burn mechanism in the last quarter of 2021.
Binance’s goal with these quarterly burns is to reduce the supply of BNB tokens from the initial 200 million to 100 million. That is, the idea is to make BNB a deflationary token. So far, 39 million BNB have been burned out of the 200 million BNB that made up the initial supply of the crypto asset. With this reduction and an eventual increase in demand, the price of the BNB token is expected to rise.
BNB price remains down despite the burning
However, this latest burn has not yet positively impacted the price of the digital asset. At the time of writing this article, the Binance token is priced at R$1,400 after dropping around 2% in the last 24 hours. Furthermore, considering the last seven days, the asset price has depreciated by almost 9%, according to data from CoinGecko.
BNB token price chart. Source: CoinGecko
The information about the BNB burn comes just a few days after the BNB Chain exploration. As CriptoFácil reported, an attacker managed to defraud the Binance hub, which is a native bridge of the Binance Smart Chain (BSC). The hack managed to steal around $100 million. That is, more than R$ 500 million at the current price.