On Monday, Binance, the cryptocurrency exchange, announced the deliberate destruction of more than $450 million worth of BNB tokens through a planned token burn.
Binance successfully removed just over 2.1 million BNB tokens from circulation in this process.
The act of “burning” refers to the permanent removal of tokens from the available supply. This is achieved by transferring these tokens to an address that is beyond anyone’s control. This strategic move contributes to increasing the value of tokens like BNB for their holders, as it effectively reduces the overall supply.
BNB serves as the backbone of the BNB Chain ecosystem and functions as the native coin for both the BNB Beacon Chain and BNB Smart Chain. Binance initially issued BNB through an initial coin offering in 2017.
To maintain a total supply of 100 million BNB, BNB employs an automatic burning mechanism. The rate at which BNB is burned is adjusted based on BNB’s market price and the number of blocks generated on the BNB Smart Chain (BSC) during each quarter.
As of Monday afternoon in Asia, BNB was being traded at $212, reflecting a 2% increase in its value over the past 24 hours, according to available data.