Binance Introduces a New BNB Burn Protocol
Binance Coin (BNB), which is the native token for the Binance platform, has been experiencing a significant amount of activity lately, which has pushed up its value quite a bit. Now, the world’s biggest exchange in terms of trading volume has announced that the quarterly burn process of the token that operates currently will be replaced. A new BNB Auto-Burn protocol will be introduced in its place. According to Binance, they had decided to do so after the Binance community had made a number of requests. As per the platform, this new mechanism will offer the community ‘predictability and transparency.
The Auto-Burn protocol will operate on a formula for burning tokens automatically, which takes into account the average value of the BNB token, along with the on-chain data of the total number of blocks generated. Currently, there are two burning mechanisms that are applicable when it comes to the BNB token. The first mechanism involves real-time burning in which a portion of the gas fees on the Binance Smart Chain (BSC) is burned. The quarterly burn is the second mechanism that makes use of the Accelerated Burn Program. The new BNB Auto-Burn mechanism is going to replace this second mechanism.
The burning process has been ongoing for a number of years now. Since Binance introduced the token, it has been committed to burning around 100 million BNB tokens because this would help in cutting down the supply of the coin by 50%. This means that the Auto-Burn protocol would automatically come to a stop once the supply of the BNB tokens in the market goes below the 100 million thresholds. The BNB burn procedures have wiped out a huge amount of tokens from the market supply over the years. A total of 1,335,888 BNB tokens had been removed by Binance from the total supply in the last quarterly burn, which had a valuation of $639 million.
Earlier this year, the burning process had wiped out BNB tokens worth $400 million. Just like the rest of the crypto market, the token has also been suffering recently when it comes to price and is now making a recovery, similar to the entire space. The token saw its price go up by 2.9%, as it reached a price of $551. However, it is important to know that its current price is at least 17% below the all-time high that it had reached back in May of the year.
In terms of annual growth, the value of the BNB token has experienced an increase of about 1,663%. Even though the BNB token is suffering, the Binance platform itself has experienced strong growth. It has become one of the first digital asset companies to have become a part of the cryptocurrency hub to be created in Dubai, United Arab Emirates. The regulators in Dubai have launched a crypto hub for crypto-related companies at the Dubai World Trade Center (DWTC) and announced that they would be collaborating with Binance to accomplish this goal, as crypto is also experiencing popularity in the Middle East.