19th quarterly Binance Chain burns $742 million BNB The Binance Chain, one of the world’s most extensively utilized blockchains, has burned 1,839,786.261 BNB, the native token of the Blockchain, which is valued at around $742 million in the first quarter of 2022. This is the 19th edition of the Binance Chain’s quarterly token burn program, which began in the third quarter of 2017 and continues to this day.
19th quarterly Binance Chain burns $742 million BNB
Since the debut of the Binance Chain and its native token, BNB, in 2017, the team has committed to eliminating a total of 100 million BNB from circulation, or half of the total supply, through a process known as burning. In accordance with the Auto-Burn methodology, the quantity of tokens removed for this quarter was automatically determined.
Binance launched and implemented its first-ever auto-burn program, known as the BEP-95, in the fourth quarter of 2021. The BEP-95 calculates the number of BNB tokens to be burned based on a formula that takes into account the total number of blocks produced on the Binance Chain and the average dollar-denominated price of BNB during the quarter.
What are token burns and how do they work?
It is deemed “burned” when cryptocurrency tokens or coins have been taken from circulation with the intent of keeping them out of circulation. In most cases, the development team responsible for a particular cryptocurrency asset will undertake the token burning. The process can be accomplished in a variety of methods, the most frequent of which is by transferring cryptocurrency to a “eater address,” which has its current balance publicly viewable on the blockchain but does not allow anyone to access its contents.
The technique of burning may entail the project’s developers purchasing tokens back from the market or burning a portion of the supply that is already accessible to them, depending on the circumstances.
The act of burning can be carried out for a variety of reasons, but it is most commonly carried out for deflationary purposes: when the circulating supply of an asset decreases, the value of that asset rises, enticing traders and investors to participate in the market. Another key application for token burning is to keep the price of stablecoins pegged to the dollar (cryptocurrencies whose value corresponds to another asset, like the U.S. dollar).
What you should be aware of
When BNB tokens were first issued, the total number of BNB tokens that would be burned was estimated based on the amount of time the tokens were used and the amount of money made on the Binance centralized exchange.
In response to the input received from the community, the BNB Auto-Burn has been implemented to effectively replace the prior burn mechanism in favor of a more objective method that is not dependent on the Binance centralized ecosystem.
This is the second quarter in which the auto burn mechanism has been in operation, and the number of BNB burned during this quarter was higher than in the previous quarter. The overall amount of tokens burned in Q1 2022 increased by 9.23 percent as compared to the same period in the previous year, when 1.68 million BNB were destroyed.
Although the value burned was smaller than in the fourth quarter of 2021, this was because to the market collapse that occurred in the first quarter of 2022. BNB worth $783 million was destroyed in the fourth quarter of 2021.
In addition, BNB employs a real-time burning mechanism that is depending on gas prices. BSC validators determine the ratio of gas fee collected to be burned in each block, with the ratio determined by the amount of gas charge collected in each block.
Since the implementation of the plan to burn BNB in 2017, a total of 34.9 million BNB has been burned to date. The current circulating supply of BNB is around 165.1 million BNB, according to the most recent available data.
In terms of market capitalization, BNB is now ranked fourth, with a market value of $69.3 billion at the time of this writing. During the first few weeks of the year, it traded as high as $533.37 before commencing a precipitous slide.
Founder and CEO Changpeng Zhao took to Twitter to brag about the entire amount of Bitcoin that has been burnt, writing that “$741,840,738 worth of #BNB will be removed out of circulation soon.” BNB has a deflationary effect. If you don’t understand what that means, you don’t have the fundamental financial understanding necessary to be successful in this environment. It’s harsh, but it’s true. “It is past time to study.” 19th quarterly Binance Chain burns $742 million BNB