Binance is committed to the development of the blockchain ecosystem.
New BNB Quarterly Burn Mechanism – Automatic Burn Protocol
Binance has always been committed to promoting the development of the blockchain ecosystem.
In recent years, with the good interaction with the community, the blockchain ecosystem has made great progress.
Like other community-supported projects, BNB has embarked on its own evolutionary journey.
Binance listened carefully to the voices from Binance Smart Chain (BSC) and the BNB community, and decided to launch a new mechanism for automatic BNB destruction.
BNB itself is a well-run ecosystem.
In order to better safeguard the interests of the BSC and BNB communities, today Binance announced the adoption of a new BNB automatic destruction mechanism, aiming to work with the BSC and BNB communities to promote a healthier blockchain ecosystem.
Go to Binance Official Website
What is BNB? What role does it play in the blockchain ecosystem?
BNB is BSC’s native token (similar to Ethereum’s GAS) and is the “fuel” for all transactions on this blockchain.
At the same time, it is also a necessary token to participate in the governance of the BSC decentralized chain.
Binance does not have any control or operational rights over BSC.
BSC (and BNB) are supported by community users, developers, validators, delegated nodes, etc.
In addition to on-chain transaction fees and other on-chain uses, BNB is widely accepted as a form of payment by various trading platforms and merchants.
Binance accepts BNB payments, but cannot decide who gets BNB and how BNB is used.
Click here to see a list of applications not affiliated with Binance that accept BNB.
How to operate the BNB automatic destruction mechanism?
There are currently two BNB destruction mechanisms.
The first mechanism is BEP95, which will burn a portion of BNB as transaction fees on BSC in real-time.
Since the Bruno upgrade of BSC on November 30, 2021, about 860 BNBs have been destroyed every day.
The second is the BNB accelerated burning mechanism for quarterly burning.
The 17th BNB burn took place last quarter, and a total of 1,335,888 BNB were withdrawn from circulation.
In the future, the BNB quarterly burning mechanism will be replaced by an automatic burning mechanism, which can improve the transparency and predictability of BNB burning.
The new automatic burn mechanism is objective, verifiable, and no longer tied to Binance’s profits.
It will automatically adjust the amount of destruction according to the BNB price, reflecting the supply and demand of BNB and the number of blocks produced in the quarter (statistics based on on-chain information).
The specific calculation formula is as follows:
In the above formula,
- B represents the number of BNB destroyed;
- N represents the total amount of BSC blocks produced in the quarter;
- P represents the average USD price of BNB;
- K is a constant value as the price anchor, and the initial value is set to 1000.
When the total circulation of BNB is less than 100 million, the automatic destruction mechanism of BNB will stop working.
①The general block generation speed of BSC is 3 seconds, and about 1200 blocks can be produced in one hour (3600 seconds per hour, divided by 3).
According to a quarter with 3 months and 30 days in each month, the value of N is approximately 3600 ÷ 3 × 24 × 30 × 3 = 2,592,000, where 24 is the number of hours in a day, 30 is the number of days in a month, and 3 is a The number of months in the quarter.
②P is the median of the samples given by the mainstream oracle price providers on BSC (such as ChainLink ), and the sampling interval is 10,000 blocks, which is about 8.3 hours.
③The K value will change according to the BEP proposal on BSC and the voting result of the community.
The figure below shows the estimated destruction amount corresponding to different BNB average prices under the automatic destruction mechanism.
After the BNB automatic destruction mechanism is implemented, the expected destruction amount calculated according to the above formula will be disclosed.
Go to Binance Official Website
Innovation, never ending
Since its launch in 2017, BNB has been actively developed in many ways with the push and support of the community.
Binance believes that this new automatic burn mechanism will open a new stage of development for BNB and BSC.
More importantly, it will enable BNB to continuously innovate, thereby continuously promoting the development of the blockchain ecosystem.
Here, Binance thanks the community for their continuous support and contribution to the construction of the ecosystem. Innovation never ends, the construction never stops!
Go to Binance Official Website
Please check Binance official website or contact the customer support with regard to the latest information and more accurate details.
Binance official website is here.
Please click "Introduction of Binance", if you want to know the details and the company information of Binance.
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April 24, 2024
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