Binance is the biggest crypto exchange in the world, and a few years ago, it brought its native crypto ecosystem to the market via BNB coin. Since its release, BNB has evolved into a beast thanks to the backing of Binance and the shift from ERC-20 to BNB Chain.
As I mentioned, at the heart of everything is the BNB coin. It powers the entire ecosystem to run some of the biggest DApps, including ApeSwap, Dex Finance, Biswap, Open Leverage, and everyone’s favorite, PancakeSwap.
Binance BNB Auto Burn Explained
Now that we know a little about the token itself let’s talk about the auto burn feature. Coin burn is the process of destroying or permanently storing a coin somewhere, removing it from the current circulating supply. The coin reaches a dead crypto wallet with an unknown key, never to be recovered again.
Coin burns help reduce the overall circulating supply. As for Binance, BNB is burned every quarter, and the exchange will keep burning until 100M coins are taken out of circulation.
When 100M coins are burned, the total supply will drop to 100M. At the time of this writing, it stands at 163,276,974.63 BNB in circulation. BNBs auto burn is done quarterly using two factors: BNB Price and how many blocks are generated on BSC/quarter. If the price goes lower, the burn rate is increased.
On-chain data from BNB Smart Chain is analyzed by the algorithm to determine how many BNB should be burned. The burn amount is adjusted each quarter depending on the BSC Smart Chain metrics.
Why auto burn? Well, the auto burn helps BNB remain transparent with its burning process. The burn will always remain independent of Binance. The formula used by Binance BNB auto burn is B=N*1000/ P+K.
N is the number of blocks generated on the chain, P is the price, and K is initially set at 1000 to keep a constant price anchor. You can follow the BNBBurn website to see how many coins are burned in real-time.
