Update on Binance's 21st Quarterly BNB Burn

Binance, the leading cryptocurrency exchange, has completed its 21st quarterly BNB burn, marking the end of a three-month period of relatively stable crypto market conditions.

1D BNB/USDT Chart on Binance at 05:25 PM on October 13, 2022

According to the announcement posted on the afternoon of October 13, approximately 2 million BNB were burned in this quarterly event, valued at over $547.2 million.

Compared to the 20th burn, this latest BNB burn saw a slight increase in both the number of BNB burned and its USD value, partly due to the slight recovery in BNB's price since July.

BNB burns are conducted quarterly by Binance in accordance with the commitments outlined in the BNB whitepaper, aiming to reduce the total supply to 100 million BNB. However, since the beginning of 2022, Binance has transitioned to a new mechanism called BNB Auto Burn. Under BNB Auto Burn, instead of basing the value of burned BNB on exchange revenue, Binance now uses a formula that calculates the number of coins burned based on BNB’s price and the number of blocks created on BNB Chain during the relevant period. Quarterly BNB burns will continue until the total supply is reduced to 100 million BNB.

Additionally, the BNB Chain ecosystem employs another concurrent burning mechanism known as BEP-95. Similar to Ethereum’s EIP-1559 proposal, BEP-95 burns coins used for transaction fees on the BNB Chain.

Recently, BNB Chain’s bridge was attacked, resulting in an estimated $586 million in damages, with hackers withdrawing 2 million BNB—worth $586 million at that time. Although BNB Chain swiftly prevented further withdrawals, the attackers successfully transferred around $100 million to other ecosystems. Binance CEO Changpeng Zhao has proposed using the next BNB burn to compensate for the tokens that were frozen.

Meanwhile, BNB Chain is in the process of allowing the community to decide how to handle the frozen tokens to ensure decentralized governance on the blockchain.