Note: The first section of this article explains the previous burn function of BNB while it was on the Ethereum network. BNB is now on Binance Chain, and 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 coin holder will call the burn function, stating that they want to burn a nominated amount of coins.
- The contract will then verify that the person has the coins in their wallet and that the number of coins stated is valid. Only positive numbers work.
- If the person does not have enough coins, or if the stated number is invalid (e.g., 0 or -5), the burn function will not 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, and the coins will be burned.
If you execute the burn function to burn your coins, they will be destroyed forever. It is impossible to recover coins after they are burned.
In other words, the BNB contract has a function known as burn function, which is available to anyone, at any time. By calling this function one can permanently remove a nominated amount of coins from the circulating supply. All coin burns are recorded as a transaction on the blockchain, meaning that they are 100% transparent and anyone is able to verify that the coins have been destroyed.
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 October 2019, Binance completed 9 BNB Coin Burn events. In total, 14,525,153 BNB coins were burned, reducing 7.26% of the Total Supply (now at 185,474,825).
|Coin Burn||BNB Burned||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||1.10%|
Binance Quarterly Coin Burns.