BNB Chain burned 1.44 million BNB, valued at $1.66 billion, moving the token closer to its 100 million supply target.
The BNB Chain has completed its 33rd quarterly BNB burn this week. The event destroyed $1.661 billion worth of tokens. Specifically, the net change in the total supply of BNB was -1,441,281.413. As a result, the total remaining supply is currently 137,738,379.26 BNB. This is an ongoing movement to gradually decrease the number of tokens available today. The long-term vision is, of course, a 100 million BNB.
Quarterly Auto-Burn Mechanism Drives Deflationary Strategy
This process is a continuous effort on the part of the BNB Chain. It seeks to reduce the overall supply transparently and predictably. Since April 2019, the chain has grown and matured considerably. Initially, BNB was used as a foundation currency on Ethereum. It is now the guide to the development of decentralization around the globe. This goes for smart contracts and blockchain services in general. The philosophy of BNB is strongly on the lines of Build and Build.
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In addition, BNB is the coin that is native to the BNB Chain ecosystem. It forms an integral power for its multifaceted Web3 environment. The coin allows for transactions on many levels transparently. These are the BNB Smart Chain (BSC), as well as opBNB L2s. In addition, it also works on the BNB Greenfield blockchain currently.
Besides transaction fees, BNB is also directly used as a governance token. This gives holders the right to join in on-chain governance right now. Besides, BNB is used as a strategic reserve asset successfully. This attracts the interest of more mainstream financial institutions around the world. This role will facilitate ecosystem growth as well as encourage broader adoption at this point. It is therefore the continuous burn that is important for long-term value.
Specifically, all future burns and this quarter’s burn would take place directly on BSC. This is as a result of the new BNB Chain Fusion which was a success. The corresponding amount of BNB is transferred to a special “blackhole” address. The blackhole address now causes the tokens to be removed from circulation permanently.
BNB Chain Executes Burn Directly on BSC After Fusion Upgrade
Because of recent Lorentz and Maxwell Upgrades, BSC is creating blocks at a faster pace. This is compared to the initial setting of the burn formula. Therefore, the parameters of the formula were changed now. This was an essential move in order to maintain the original spirit. It makes sure the deflationary effect is as intended. Thus, the mechanism has a graceful degradation with respect to network changes.
In addition, BNB Chain applies an independent real-time burning system at all times. This mechanism is dependent upon collected gas fees instead. BSC validators can now decide the ratio of gas fees for each block. That set ratio is then burnt at a constant rate all the time. And since the commencement of BEP95, around 276K BNB have been burned. This, in turn, ensures overall dynamic constant token reduction. It adds deflationary pressure every single day.
The fiery loss of $1.661 billion has the market supply dwindling considerably. This is considered a good thing by the investors these days. It confirms the engagement towards the 100 million target in an active manner. Stability – Quarterly Auto-Burn and real-time gas fee burn. This means that the token’s entire valuation remains predictable. The ecosystem still has a strong emphasis on growth and decentralization.
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