Binance replaces the quarterly “BNB” burning mechanism with automatic burning…Here’s what you need to know!
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Answer Binance replaces the quarterly “BNB” burning mechanism with automatic burning…Here’s what you need to know!
It is known that Binance conducts periodic burning operations once every three months for its digital currency BNB, by allocating amounts of the platform’s revenues to purchase and burn the currency in order to reduce its supply and make it a deflationary asset.
In one of its major announcements on Thursday, December 23, crypto exchange Binance announced that it will introduce an “Auto-Burn” feature and service that immediately impacts the broader interest of the Binance blockchain and BNB.
BNB is the original cryptocurrency that fuels transactions on the Binance BSC blockchain.
It is somewhat similar to the gas fees paid on Ethereum.
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In addition, the BNB cryptocurrency is essential to participate in the decentralized governance on the Binance BSC blockchain.
Currently, the Binance blockchain follows two main BNB burning mechanisms, since the introduction of the “BEP95” upgrade, a portion of the gas fees spent on the Binance BSC blockchain are burned in real time.
The Binance BSC blockchain is currently burning 860 BNB on a daily basis since the “Bruno” upgrade last month.
In addition, Binance burns BNB every quarter with 1,335,888 BNB removed from circulation during the last quarter.
Quarterly burning will now be replaced by Auto-Burn.
came in Official Announcement To Binance about the new feature, the following:
From now on, the quarterly burn will be replaced by Auto-Burn to provide greater transparency and predictability to the BNB community.
Auto-Burn for BNB will be objective and verifiable, regardless of the revenue generated on the Binance crypto exchange through the use of BNB, and will be automatically adjusted so that the amount of burning depends on the price of BNB, which in turn reflects the supply and demand for BNB, as well as the number of blocks produced during Quarterly calculated based on information on the blockchain.
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How long should the automatic burning of BNB currency last?
Binance has told that it will only discontinue the BNB auto-burning protocol when the total BNB trading volume drops below 100 million coins.
BNB explained the full math behind spontaneous burning in its official announcement.
The switch to the new BNB auto-burn feature means that the amount of BNB burned no longer depends on Binance’s profit.
But it has become dependent on the price of BNB and the level of activity of the Binance BSC blockchain.
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