Despite the massive number of tokens destroyed so far, the BSC network still needs to burn more than 43 million BNB to reduce the token’s market supply.
BNB Foundation, the nonprofit organization overseeing the network, announced today that it has completed the 29th quarterly burn of BNB, sending 1772712.363 of the token worth approximately $1.07 billion to an unrecoverable “black hole” address.
The Foundation started burning the digital assets following the network’s mainnet launch on April 18, 2019, to reduce its maximum supply to 100,000,000 BNB. This strategy is designed to introduce a deflationary effect that may boost scarcity and, consequently, the value of BNB in the long term, similar to Bitcoin’s halving event.
BNB Foundation Burns over $1 Billion of BNB
However, the amount of tokens destroyed per time depends on BNB’s market value and the blocks generated on the BNB Smart Chain (BSC) during that quarter. This approach allows the burn process to adapt to fluctuations in BNB’s price and BSC’s activity levels, ensuring that it reflects both market conditions and network usage.
For the 29th quarterly burn, data from BscScan, a blockchain explorer, shows the Foundation completed the burn when the price of BNB traded around $576. The last quarter burn in July saw the digital asset trading around $594. At the time, the Foundation destroyed approximately 1,643,699 BNB, valued at $971 million.
Despite the massive number of tokens destroyed so far, the BSC network still needs to burn more than 43 million BNB to reduce the token’s market supply. The BNB is the native token of the blockchain ecosystem, powering all activities within the BSC network, as well as the opBNB L2s and BNB Greenfield blockchain.
The digital asset also serves as the governance token of the BSC Chain, granting holders the ability to participate in the decision-making regarding network upgrades and the introduction of new functionalities.
A Real-time Burn Mechanism
In addition to the quarterly burn, BNB Foundation implements a real-time burning mechanism based on gas fees. According to the nonprofit, this strategy is designed to destroy a determined ratio of gas fees generated by network validators at a fixed rate. Through this mechanism, the BSC Chain has burned 242,000 BNB since its introduction.
The Foundation also introduced other mechanisms, such as the Pioneer Burn Program, designed to enable users to recover their lost BNB and other digital assets associated with the token in what is described as “an honest mistake”. Instead of simply creating new tokens or taking the loss directly, the nonprofit covers these recovered tokens through its regular quarterly burn events.
next