01 December 2021 09:17, UTC
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The Binance Coin token burn mechanism has been activated on the blockchain, which destroys part of the transaction fees
On December 1st, the Bruno update was activated on the Binance Smart Chain at block 13 082 00. A BEP-95 improvement proposal has been deployed on the blockchain, which contains a mechanism for burning Binance Coin tokens. Now, in each block, a fixed proportion of transaction fees charged by validators will be destroyed. The burn mechanism works similarly to Ethereum’s deflationary model, which was launched on August 5 following the London update.
At the time of the release of the Bruno update, the Binance Smart Chain burned commission rate of 10%. However, validators have the ability to independently adjust this coefficient.
Binance Smart Chain developers proposed to activate the token burn mechanism at the end of October. In their opinion, the regular destruction of Binance Coin tokens will accelerate the implementation of the deflationary model and increase the value of the altcoin.
Each quarter, Binance uses 20% of its profits to repurchase and burn Binance Coin tokens. This will continue until the emission of altcoins is reduced by 50%, to 100 million. The last destruction of Binance tokens took place on October 18th. Crypto exchange burned $ 640 million worth of Binance Coin.
Burning tokens is the destruction of a certain number of digital coins to reduce their emission. This method is used to combat inflation and increase the value of cryptocurrencies. All token burn operations are recorded on the blockchain as a transaction. Therefore, anyone can verify that the coins have been destroyed.
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