Cryptocurrency exchange Binance announced on Thursday that the Binance Smart Chain blockchain will now burn binance coin (BNB) automatically with an adjustment mechanism. According to a blog post, the burn amount will be based on the price of BNB, which, in turn, reflects the supply and demand for BNB, as well as the number of blocks produced during a quarter calculated on the basis of on-chain information.
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"We have been listening closely to the Binance Smart Chain and BNB communities-and we are proud to announce the implementation of a new BNB Auto-Burn procedure effective immediately," the exchange said.
The so-called Auto-Burn mechanism has been implemented on the BSC network with the Bruno hardfork in November this year. Binance says that the new burn mechanism will be both "objective and verifiable." The mechanism will be halted when the total circulation of BNB drops below 100 million.
Earlier in December, Polygon, an Ethereum-focused scaling solution, rolled out a testnet implementation of EIP-1559 to introduce burning of its native MATIC token. The company said in a blog post that the upgrade will eventually will have a deflationary effect on MATIC.
As iHodl reported, EIP-1559 changes the principles of adding new transactions to the network and, as a result, reduces the amount of miners' earnings. With the upgrade it is not users who choose fees when sending transactions, but the network itself sets them based on the size of the previous block in the network.
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