A burn that would affect the costs related to the Binance Smart Chain
On its website, Binance unveiled its new “burn” plan regarding Binance Smart Chain (BSC) transaction fees.
The project aims for part of the transaction costs of each block to be burned and the proportion to be adjustable by the governance of the network.
The objective would therefore be to reduce the supply of BNB tokens in circulation over time.
To be more precise, this proposal, called BEP-95, suggests that the share of costs burnt be established at 10%. In practice, the network collects around 6,814 BNB in daily transaction fees.
Thus, based on the figures obtained at the time of writing, the introduction of this update would reduce the supply of 681 BNB per day. This represents an amount of 334,000 dollars at the current price.
In order for the project to be put to the vote, each validator must meet at least 2,000 BNB. The proposition will simply be to know if the validators are “for” or “against” the implementation of this additional burn mechanism. The tokens will of course be returned after participating in the vote.
Interestingly, this update will not infringe on the disinflationary mechanism already in place within the Binance exchange.
Indeed, the latter currently burns tokens on part of the trading costs related to the use of the platform. This operation takes place every quarter and depends on the volume of trading that took place over that same period.
For example, in April 2021, Binance completed its 15th quarterly BNB burn leading to the destruction of 1,099,888 BNB, the equivalent of $ 595.3 million at the time of the transaction.
As a result, the total BNB supply decreased from 170,532,825 BNB to 169,432,937 BNB.
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About the Author: Anthony Bassetto