The biggest crypto exchange by far is Binance. Despite some regulatory hiccups in the past, the crypto exchange platform was trending in the news following its developments. Here was the most significant trending one. In December 2021, Binance officially announced the implementation of a new Binance Coin Auto-Burn protocol to replace its current quarterly burn mechanism. This aimed at more “transparency and predictability” to its community.
Planned and delivered
🔥🔥 $795M USD has been burned! 🔥🔥https://t.co/BsLqhtsovc
— Binance (@binance) January 17, 2022
Cryptocurrency exchange Binance implemented its first-ever Binance token (BNB) auto-burn program last quarter. As per the Auto-Burn procedure, it removed over 1.6 million BNB tokens worth $750 million from circulation.
The latest quarterly burn included an additional 6,296.305493 BNB. This was effectively burned via the Pioneer Burn Program, the tweet added.
Taking the different path
This was an important update. Until last month, Binance removed BNB tokens on a quarterly basis based on revenues it generated during a period. But, now, the exchange implemented a new procedure, called BNB Auto-Burn.
The BNB Auto-Burn formula calculated the number of tokens removed from circulation according to BNB’s price. This reflected supply and demand, as well as the number of blocks produced for that quarter. The BNB Auto-Burn system takes into consideration the following formula:
Here, B is the amount of BNB to burn. N is the total number of blocks produced on the Binance Smart Chain during the calendar quarter. P is an average price of BNB against the US dollar. K is a constant value as a price anchor, initially set at 1000.
“The implementation of the BNB Auto-Burn is a natural next step in BNB’s journey. It will help the BNB community grow through providing greater autonomy, transparency and predictability.”
Binance started burning BNB in 2017 after launching the token. At that time, it committed a total of 100 million BNB, i.e., 50% of its total supply. Fast forward now, the graph stands as follows:
Overall, the exchange destroyed nearly 35 million tokens via quarterly burns to date.