The BNB Foundation has conducted the 28th quarterly token fire on the BNB Chain, thereby further diminishing the total supply of BNB tokens.
BNB Chain announced in a blog post on Monday that 1,643,698.8 BNB tokens were removed from circulation during the fire.
According to the platform, the tokens’ estimated value at the moment of the burn was approximately $971 million.
BNB Serves as Native Coin of BNB Chain
BNB is the native coin of the BNB Chain ecosystem and is essential for the multidimensional Web3 environment it powers.
It enables transactions on the BNB Smart Chain (BSC), opBNB L2s, and BNB Greenfield blockchain.
Furthermore, BNB possesses governance utility, which allows its holders to engage in the decentralized on-chain governance of the BNB Chain.
BNB’s Auto-Burn system progressively diminishes the token’s total supply to 100,000,000 BNB.
The burn amount is adjusted quarterly by the pricing of BNB and the quantity of blocks generated on the BSC.
The recent burn, as well as future burns, will take place directly on the BSC as a result of the ongoing BNB Chain Fusion, in contrast to previous quarterly burns.
BNB implements a real-time burning mechanism that is dependent on gas fees in addition to the quarterly burns.
BSC validators determine the ratio of gas fees collected in each block, and the gas is subsequently consumed at a predetermined rate.
Approximately 234,000 BNB tokens have been burned through this mechanism since the introduction of BEP95.
Another noteworthy initiative is the BNB Pioneer Burn Program, which assists users in recovering lost BNB and pegged tokens due to genuine errors.
The program offers a safety net for users within the ecosystem by covering these losses through quarterly token combustion events.
Does BNB Burn Impact Price?
The BNB Foundation aims to establish a deflationary mechanism to sustain the token’s value over time by decreasing the total coin supply.
Economic theory posits that deflationary currencies with a fixed or diminishing supply tend to retain or increase in value more than inflationary assets.
The remaining coins become scarcer and theoretically more valuable as BNB coins are destroyed.
This deflationary dynamic can initiate a reinforcing cycle. Demand is stimulated by the increased utilization of BNB throughout the Binance ecosystem, which is facilitated by the higher prices.
The increasing value validates the token’s value, which attracts new users and traders as demand increases. Consequently, the supply is further diminished due to the permanent locking of additional coins through burning.
Nevertheless, the likelihood of a price increase is not guaranteed, and the extent of the growth is contingent upon market conditions and the importance of broader adoption.
It is essential to mention that BNB Chain has launched a Meme Innovation Campaign to entice developers of meme coins as the prevalence of meme tokens continues to increase.
The network recently disclosed in a post on X that it is allocating up to $1 million to compensate eligible developers who deploy their memecoin projects on the network.
