Binance Auto-Burn program torches nearly $800 million worth of BNB tokens
6296 of the burned tokens were adjusted from the BNB Pioneer Burn Program
Binance’s 18th quarterly burn of its native BNB token saw the highest dollar value in tokens cleared off the network. The leading exchange announced yesterday that it had cut from circulation a total of 1,684,387.11 BNB, valued at around $798,079,000 at the time of writing, according to market data.
Comparatively, the 17th burn done in October cleared out 1,335,888 BNB valued at $639,462,868 at the time of the burn, and the 15th, which torched in excess of 3 million tokens, did not reach $600 million in dollar value cleared.
Of the burnt tokens, 6296.305493 were tokens removed via the BNB Pioneer Burn Program. The program is a Binance initiative to cover customer losses in select cases where tokens are erroneously sent to dead wallets. The tokens used to offset user losses are counted as part of the burn.
Auto-Burn mechanism makes its debut
The 18th quarterly burn also marked the first time that Binance has enforced its auto-burn mechanism. Last month, the exchange introduced the BNB Auto-Burn mechanism to replace the quarterly burn method.
Binance explained that the new method offered users better predictability and transparency. Moreover, the mechanism is independent of revenues that BNB generates on the Binance centralised exchange.
“The implementation of the BNB Auto-Burn is a natural next step in BNB’s journey and will help the BNB community grow through providing greater autonomy, transparency and predictability,” Zhao said.
Burning sends tokens to unreachable wallets, effectively eliminating them from circulation within the network. Binance has burnt tokens since the launch of the BNB token over three years. At the time, the exchange committed to burning 50% of its total supply of BNB to reach 100 million tokens.
Binance Coin is still a deflationary token
Alongside the news, Binance CEO Changpeng Zhao tweeted out to users, reminding them that BNB is a deflationary token.
“$729 million USD equivalent burned. BNB is deflationary,” the post read.
The burning of tokens is considered deflationary as it ideally brings value to the token. The expected increase in value comes from the notion that a reduction in the supply of a token makes its inflation resistant.
However, despite the expectation that the announcement would boost the price of the BNB token, it has remained in decline. BNB is trading at $469.45, down 3.14% from Monday at the time of press.