The Binance (BNB) Foundation recently announced the successful completion of the 28th quarterly BNB token burn. This ongoing process aims to reduce the total supply of BNB, the native token of the BNB Chain ecosystem.
Key figures from the 28th burn:
- Total BNB burned: 1,643,698.8 BNB
- Estimated USD value at burn time: ~$971 million
- There was no contribution from the Pioneer Burn Program this quarter
What is BNB and the BNB Chain?
BNB serves as the lifeblood of the BNB Chain, powering transactions across the BNB Smart Chain (BSC), opBNB L2s, and BNB Greenfield blockchains. Beyond simply facilitating transactions, BNB functions as a governance token, allowing holders to influence the future of the BNB Chain through on-chain voting.
Originally launched on the Ethereum Network in April 2019, BNB has since transitioned to its own dedicated blockchain, the BNB Chain, reflecting the project’s “Build and Build” philosophy that prioritizes fostering a thriving ecosystem.
Understanding the BNB Auto-Burn
The BNB Auto-Burn mechanism represents a commitment from the Binance (BNB) Foundation to reduce the total supply of BNB tokens to 100 million. The amount of BNB burned each quarter is determined by a transparent formula that considers both the current price of BNB and the number of blocks generated on the BSC network. This approach ensures predictability and allows the community to stay informed.
Transparency and Decentralization
The BNB Auto-Burn process boasts independent audibility, offering a high degree of transparency. Additionally, the burning occurs directly on the Binance (BNB) Smart Chain, separate from the centralized Binance exchange, further solidifying the decentralized nature of the process. Burned tokens are sent to a designated “burn address,” effectively removing them from circulation.
Beyond Auto-Burn: Real-Time Burning
The BNB Chain also utilizes a real-time burning mechanism that burns a portion of the gas fees collected with each block on the BSC network. The exact ratio of gas fees burned is determined by BSC validators. Since the introduction of this mechanism, over 234,000 BNB have been removed from circulation.
Pioneer Burn Program: Recovering User Losses
While not a factor in the 28th burn, the BNB Pioneer Burn Program offers a unique feature. This program allows users to recover lost BNB and pegged tokens due to honest mistakes. The recovered tokens are sourced from the quarterly burns, demonstrating the BNB Chain’s commitment to its user base.
The ongoing Binance (BNB) burn process remains a core pillar of the BNB chain ecosystem. By reducing the total supply of BNB, the burn mechanism aims to contribute to the long-term value of the token while fostering a robust and decentralized Web3 environment.