Zhao Changpeng announced that over 700 million BNBs will be destroyed

Why Destroy?

BNB uses an automatic destruction method to reduce its total supply to 100,000,000 BNB. the automatic destruction mechanism modifies the number of BNBs to be destroyed based on the price of the BNB and the number of blocks generated by the BNB Smart Chain (BSC) in the previous quarter.

The 19th quarter of BNB destruction resulted in 1,839,786 tokens being removed from circulation, destroying approximately $778 million in BNBs. the most recent quarterly BNB destruction was the second using the Auto-Burn model, which was implemented in January of this year. The wallets that destroyed tokens currently have 16.4 million BNBs, or approximately $7 billion.

The value of tokens from the most recent BNB burn is roughly the same as the value of tokens from the 18th quarterly BNB burn. In terms of volume, the most recent BNB burn was the largest since Q4 2020.

Previously, a large number of BNBs were destroyed each quarter, but the number was determined by the many business conditions met by the Coinan cryptocurrency exchange throughout the quarter. In December 2021, these quarterly destructions were converted to an Auto-Burn model, which depends on variables unrelated to the Cryptocurrency Exchange.

The algorithm for determining how many BNBs to destroy in the new Auto-Burn model takes into account the number of blocks generated on the BNB chain throughout the quarter, as well as the average BNB price (in USD) over the same time period.

The Auto-Burn algorithm will be used until the supply of BNBs reaches a reduced level of 100 million tokens. This is consistent with Coin's original BNB whitepaper, which stated that the supply of BNBs would be gradually reduced from the initial 200 million tokens. Because of the real-time BNB destruction mechanism used on the BNB Chain, there will be some deflationary pressure on the BNB supply even if Auto-Burn mode is disabled. Even if the BNB supply is reduced to 100 million tokens, a portion of the gas fees collected in each BNB Chain block will be permanently removed from circulation.