Binance Coin, BNB is the cryptocurrency coin that powers the Binance ecosystem. As one of the world's most popular utility tokens, not only can you buy or sell BNB like any other cryptocurrency, but BNB comes with a wide range of applications and benefits.
Binance is replacing its quarterly burning destroying a certain number of digital coins to reduce their issue. This method is used to fight inflation and increase the value of cryptocurrency. All token burning transactions are recorded in the blockchain as a transaction. Therefore, anyone can verify that the coins were destroyed. process for BNB with an automated mechanism based on price dynamics, supply and demand.
Cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. exchange businesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies. Binance is introducing a new automatic burning mechanism for its tokens. Binance Coin a coin can refer to a cryptocurrency that can operate independently or to a single unit of such cryptocurrency. ( BNB ) that will replace its current quarterly flaring process. This was announced by the company in a statement on Thursday.
The new mechanism, called BNB Auto-Burn will burn BNB tokens automatically based on a formula consisting of blockchain data of the total number of blocks generated and the average BNB price.
In the statement, Binance explained that it was replacing its quarterly burning protocol the set of rules that define interactions on a network, usually involving consensus, transaction validation, and network participation on a blockchain. in response to user requests. The new mechanism also seeks to provide greater “transparency and predictability”. to the community, the company added.
It should be noted that the term “burning” refers to a process to permanently eliminate a cryptographic token by taking it out of circulation; thus reducing its supply and potentially increasing its price. When Binance launched its BNB cryptocurrency in 2017, it pledged to burn a total of 100 million BNB, or 50% of its total supply of the token.
New burning mechanism for BNB
Currently, Binance has two mechanisms for taking BNB out of circulation. One is the real time burning of a percentage of the gas a term used on the Ethereum platform that refers to a unit of measuring the computational effort of conducting transactions or smart contracts, or launch DApps in the Ethereum network. It is the “fuel” of the Ethereum network. *see Gas Limit and Gas Price. rates in the Binance Smart Chain (BSC). The second is the quarterly burn based on the “Pioneer Burn” Program from Binance which will be replaced by the BNB Auto-Burn mechanism.
It’s worth noting that BSC is the smart contract in traditional finance, a contract is a binding agreement between two parties. In cryptocurrencies, smart contracts execute functions on the blockchain. blockchain of Binance . Introduced in 2020, it is a network a network refers to all nodes in the operation of a blockchain at any given moment in time. for decentralized decentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal. finance protocols (DeFi). The BNB cryptocurrency is used to pay transaction fees on BSC and allows holders to make exchanges, and participate in the protocols running on that chain.
Under the new mechanism, flaring processes will be based on price and supply-demand dynamics for BNB using BSC chain information. Then, as the price of BNB falls, the amount of BNB burned increases to ensure that the value removed remains constant and independent of market an area or arena, online or offline, in which commercial dealings are conducted. movements.
BNB Auto-Burn it will also be objective and verifiable. It will be carried out continuously and will not depend on the revenues generated in the centralized a centralized organizational structure is one in which a single node or a small number of them are in control of an entire network. exchange of Binance through the use of the native token. The mechanism will stop when the total circulation of BNB falls below 100 million.
According to the statement, BNB Auto-Burn is also designed to encourage the development of a “ healthy blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. ecosystem “and will serve to better reflect its use in the Binance Smart Chain. A spokesperson for Binance commented on the matter to CoinDesk :
Our announcement of BNB Auto-Burn is a natural next step in BNB’s journey and will help the BNB community grow by providing greater autonomy, transparency and predictability.
A favourable process for the price of BNB
The announcement of Binance comes two months after its last burning, which was carried out in the last year. withdrew a total of 17,839 BNBs from circulation in October . The figure represented about USD $650 million at that time and has been the largest token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. burn of Binance in US dollar terms.
BNB burning, which involves sending tokens to an inaccessible address, was initially introduced as a mechanism to accumulate value and grow a Binance . But as the market has grown, and with the deployment of BSC and its DeFi a movement encouraging alternatives to traditional, centralized forms of financial services. ecosystem, BNB has found more uses beyond simply being the exchange’s native token.
By the time of editing, BNB is the third-largest cryptocurrency by market value, according to data from CryptoMarkets and is located just behind Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. yEther the form of payment used in the operation of the distribution application platform, Ethereum.. At USD $528, it is trading 10% lower than a month ago. BNB has fallen about 25% from its all-time high of USD $683 recorded in May this year, but has still been trading at USD $528. increased by almost 1,300% since the beginning of 2021.
Meanwhile, BSC is the third largest DeFi platform a place to buy, sell and store cryptocurrency with more than 231 protocols operating on the network and a $17 billion market, according to show the data for DeFi Llama.
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Article by Hannah Estefania Perez / DiarioBitcoin
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