Global cryptocurrency exchange leader Binance announced the completion of its 19th quarterly BNB burn on April 19, marking the platform's first automated Auto-Burn execution for Q1 2022.
Key Burn Statistics
- Total BNB Burned: 1,839,786.26 BNB
- Estimated Value: $740 million (at $403/BNB average price)
- Next Projected Burn: ~1.81 million BNB (scheduled for August 2022)
How BNB’s Auto-Burn Mechanism Works
BNB Chain activated its Auto-Burn protocol in December 2021, replacing manual quarterly burns to enhance transparency and supply predictability. Key features:
- Dynamic Adjustment: Burn volume adjusts based on BNB’s market price and on-chain block production data, reflecting real-time supply/demand.
- Deflationary Impact: Aims to reduce circulating supply until it reaches the target cap of 100 million BNB.
- Parallel Systems: Operates alongside BEP-95 (introduced November 2021), which burns a portion of gas fees daily (~860 BNB/day).
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Supply Impact and Market Reaction
- Total Burned to Date: 37+ million BNB (from 200 million max supply).
- Current Circulating Supply: ~162 million BNB.
- Price Effect: BNB rose 5.3% post-burn, peaking at $424.7 (from $403). As of reporting, it trades at $421.5 (#4 by market cap).
FAQs
Why does Binance burn BNB?
Burns reduce supply to increase scarcity, aligning with BNB’s deflationary model. The Auto-Burn mechanism ensures systematic, transparent reductions.
How is the burn quantity calculated?
An algorithm factors in BNB’s price and quarterly block production to determine the burn volume, ensuring market responsiveness.
When will automatic burns stop?
The protocol halts once circulating supply drops below 100 million BNB.
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Conclusion
Binance’s automated burns reinforce BNB’s utility as a Web3 ecosystem token, combining deflationary mechanics with DAO-like governance. Future burns will continue to balance supply with organic demand growth.
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