Binance Launches New 'Auto-Burning' Protocol for BNB to Replace Existing Mechanism

The largest crypto exchange by far is Binance. Despite some regulatory hiccups in the past, the cryptocurrency exchange platform was trending in the news following its developments. Here was the most significant trend. In December 2021, the development of Binance officially announced the implementation of a new finance coin auto burn protocol to replace its current quarterly burn mechanism. This pointed to more “transparency and predictability” for their community.

Cryptocurrency exchange Binance implemented its first-ever Binance Token ( bnb) auto-burn program last quarter. according to the Auto-Burn procedure, remote more than 1.6 million BNB tokens are worth 750 million dollars in circulation.

The latest quarterly burn included an additional 6,296.305493 BNB. This was effectively burned through the Pioneer Burn Program, the tweet added.

taking the different road

This was a major update. Until last month, Binance delisted BNB tokens on a quarterly basis based on the revenue it generated over a period. But, now, the exchange has implemented a new procedure, called BNB Auto-Burn.

The BNB Self-Recording Formula calculated the number of tokens withdrawn from circulation based on the BNB price. This reflected supply and demand as well as the number of blocks produced for that quarter. The BNB Auto-Burn system takes into consideration the following formula:

Here, B is the amount of BNB to burn. N is the total number of blocks produced on the Binance Smart Chain during the calendar quarter. P is an average price of BNB against the US dollar. K is a constant value as a price anchor, initially set to 1000.

Chang Peng Zhao (CZ), Co-Founder and CEO of Binance opined :

“The implementation of BNB Auto-Burn is the next natural step in the BNB journey. It will help the BNB community grow by providing greater autonomy, transparency and predictability.”

Binance development started BNB fire in 2017 after the launch of the token. At that time it committed a total of 100 million BNB, that is, 50% of its total offer. Fast forward now, the graph looks like this:

Overall, the exchange destroyed nearly 35 million tokens through quarterly burns to date.