Binance Destroys 1.6M BNB Tokens in First-Ever Auto Burn
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The world’s largest cryptocurrency exchange Binance has implemented an automatic token burn program for the first time. Accordingly, more than 1.6 million BNB tokens worth 750 million USD were removed.
Binance’s First Auto Burn Program
With a new burning method. The number of tokens to burn is calculated using a formula based on the total number of blocks generated on the Binance Smart Chain, a programmable blockchain that powers smart contracts and runs in parallel with Binance Chain and USD Average Price of BNB – par value for the quarter.
The change to the previous method of token burning, based on the revenue generated from the Binance centralized exchange, is expected to make the process more objective and transparent for the BNB community.
Binance with deflationary goals
Changpeng Zhao, CEO of Binance, said: “The implementation of auto-burning of BNB is the natural next step in BNB’s journey and will help the BNB community grow through providing autonomy, transparency, and higher predictability”. The announcement was published on the Binance blog.
Binance is committed to burning 100 million BNB tokens, or 50% of the circulating supply, through quarterly burns. To date, the exchange has destroyed nearly 35 million tokens through quarterly burning, after starting the program in late 2017.
Token burning is said to be deflationary and is usually meant to provide a store of value for the cryptocurrency. In traditional finance, deflation means a consistent drop in prices. In cryptocurrency, a deflationary token is one whose circulating supply will decrease over time, thus making it resistant to inflation or a store of value.[
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