Note: The first section of this article explains the previous burn function of Binance Coin while it was on the Ethereum network. Binance Coin is now on the Binance Chain, so the burn function behaves differently. However, the discussion still applies to all current ERC-20 tokens that support the burn function.
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.
How does it work?
Basically speaking, a token burn event happens in the following order:
- A cryptocurrency holder will call the burn function, stating that they want to burn a nominated amount of coins.
The smart contract will then verify that the person has the coins in their wallet and that the number of coins stated is valid. The burning mechanism only allows positive numbers.
If the person doesn’t have enough coins, or if the stated number is invalid (e.g., 0 or -5), the burn function won’t be executed.
If they do have enough, then the coins will be subtracted from that wallet. The total supply of that coin will then be updated, meaning that the coins were permanently burned.
If you click Decode Input Data, you can check the amount of BNB that was burned. The number includes the 18 decimals, so in this example, 1,623,818 BNB were burned.
The current Binance Burn function
As of July 2021, Binance completed 16 BNB Coin Burn events. In total, 31,863,791 BNB coins were burned, reducing 15.93% of the Total Supply (now at 168,137,035 BNB).
|Coin Burn||BNB Burned||Approx. BNB Price||Approx. USD Value||% of Total Supply|
|#7 (Apr 2019)||829,888||$18.79||$15,600,000||0.41%|
|#9 (Oct 2019)||2,061,888||$17.79||$36,700,000||1.03%|
|#10 (Jan 2020)||2,216,888||$17.50||$38,800,000||1.11%|
|#11 (Apr 2020)||3,373,988||$15.55||$52,466,000||1.69%|
|#12 (Jul 2020)||3,477,388||$17.40||$60,500,000||1.74%|
|#13 (Oct 2020)||2,253,888||$30.17||$68,000,000||1.13%|
|#14 (Jan 2021)||3,619,888||$45.80||$165,791,000||1.81%|
|#15 (Apr 2021)||1,099,888||$541.25||$595,314,380||0.55%|
|#16 (Jul 2021)||1,296,728||$303.59||$393,673,654||0.65%|
BNB Destruction History (Quarterly Coin Burns).