BNB has already burned more than $30 billion in tokens

Since its launch, BNB, BNB Chain’s native cryptocurrency, has burned more than 54 million tokens, equivalent to more than US$30 billion.

The platform achieved this milestone through an ongoing and strategic coin burning process, an essential method for reducing the total supply of tokens and potentially increasing their market value.

Burning coins is a common practice in the world of cryptocurrencies. It involves the permanent removal of tokens from circulation, decreasing the available supply. Initially, BNB had a total supply of 202 million tokens. Today, 147 million remain in circulation, according to information on the website bnbburn.info.

The scavenging of BNB tokens is carried out in two main ways: a quarterly burn and a per-transaction self-burn system. In April, for example, Binance carried out an automatic burn that removed 1,944,452 BNB tokens from circulation, equivalent to approximately 670 million dollars.

To date, 27 events of this type have occurred. The next burn is scheduled for the second quarter of this year, with the expectation of eliminating 1,649,024 BNB tokens.

BNB Burn

The BNB Auto-Burn mechanism adjusts the amount of tokens to be burned based on the price of BNB. This ensures that the burn is proportional to the current market value of the cryptocurrency, maintaining a balance between supply and demand.

Token burning can have several positive impacts on the asset’s price. Firstly, the reduction in the number of available tokens increases the scarcity of BNB.

The law of supply and demand dictates that when the supply of a good decreases and demand remains constant or increases, the price tends to rise. Therefore, the lower availability of BNB could lead to an appreciation in its value in the market.

Furthermore, burning tokens can generate a deflationary effect. With fewer tokens in circulation, each remaining unit could be worth more, which could attract more investors. This increase in value can strengthen investors’ confidence in the asset, leading to a virtuous cycle of appreciation and confidence.

The second way to burn BNB is to burn a fixed proportion of the gas fee for each block processed on the BNB Chain, similar to the mechanism implemented by Ethereum. This process is decided by the network’s validators, and a small portion of each transaction fee is permanently withdrawn from circulation.