The native token for the Binance ecosystem, Binance Coin (BNB), has been under much activity lately, contributing to its rising values. Now, Binance has announced that a new BNB Auto-Burn protocol will be launched to replace the currently quarterly burn process.
Binance stated that this had happened after many requests from the Binance community. The platform notes that this new mechanism will provide the community with “transparency and predictability.”
Binance Coin Auto-Burn protocol
The Auto-Burn protocol will work by burning tokens automatically using a formula comprised of the average value of BNB and the on-chain data of the total blocks generated.
Currently, the BNB token undergoes a ban through two burning mechanisms. The first is the real-time burning mechanism whereby a portion of gas fees on the BSC is burned. The second mechanism is the quarterly burn that uses the Accelerated Burn Program. This second mechanism is the one that will be replaced by the BNB Auto-Burn mechanism.
The exchange has been running the burning process over the years. Since the coin was launched, the company has been committed to burning 100 million BNB tokens over the years. This would reduce the supply of the coin by half. Therefore, the Auto-Burn protocol will be halted once the BNB supply declines to below 100 million.
A vast amount of tokens has been taken out of supply through BNB’s burn processes. During the last quarterly burn, Binance removed 1,335,888 BNB tokens from the total supply, valued at over $639 million. Another $400 million worth of BNB tokens was burned earlier in the year.
Binance coin recovers slightly
BNB has been recovering like the rest of the crypto market. At the time of writing, the token was up 2.9% to $551. However, the token is around 17% below its all-time high, created in May 2021. On an annual basis, BNB has gained by around 1663%.
On the other hand, the Binance exchange is making notable growths. The exchange became one of the first digital asset firms to be a part of the crypto hub in Dubai. The announcement came a few hours after Dubai regulators launched a crypto hub for digital asset firms.
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