Coin burning is the process of permanently removing coins from circulation, reducing the total supply. In order to explain how this is achieved and how it works, we will be using Binance Coin (the old BNB ERC-20) as an example. The previous contract for BNB while it was on the Ethereum network can be found here.
When the Binance Coin was still part of the Ethereum network, Binance performed periodic Coin Burn events through the use of a smart contract function known as burn function. The BNB burning events are scheduled to take place every quarter until 100,000,000 BNB are finally destroyed, which represents 50% of the total BNB ever issued (200,000,000 BNB). However,
The amount of BNB coins to be burned is based on the number of trades performed on the exchange within a 3-months period. So after each quarter, Binance burns BNB according to the overall trading volume.
However, it seems that a considerable amount of people still fail to understand how Coin Burns are executed. The present article aims to provide relevant information in regards to the burn function and the quarterly BNB Coin Burn events.
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