Binance Smart Chain (BSC) enables the real-time burn approval mechanism, originally proposed in October, will increase the BNB token burn rate.
Binance Smart Chain has approved a proposal that will increase the BNB token burn rate. The change called “Binance Evolution Protocol, BEP-95“, was initially proposed in October, and will now be implemented.
In addition to increasing the BNB’s burn rate, the proposal also promises to deliver more power to validators. The actual number of BNB validators received may decrease thanks to the change, the token value is expected to increase.
“Each block will burn a fixed proportion of the gas fee charged by the validators on each block.”
Binance Smart Chain said in a December 1st tweet.
“The burn rate is adjustable through governance.”
Created by Binance in 2017, BNB is a deflationary token by design, meaning that Binance burns a percentage of BNB stock every three months to maintain the value of the token. Binance will stop burning BNB as soon as 50% of the initial supply is burned and only 100 million BNB remain.
Binance has manually conducted BSC burns since its inception. One of these fires was conducted just before BEP-95 was announced, taking $640 million (1,335,888 BNB) out of the network.
As Binance uses proof of betting, there are no new tokens coming into circulation to balance the burn. Meanwhile, the block rewards and the Ethereum burn pool work against each other by influencing the coin supply.
The current burn rate is set at 10% but can be changed if necessary through community governance proposals. BEP-95 is considered the BSC equivalent of Ethereum’s EIP-1559 proposal, which came as part of the London update.
Both changes add more deflationary pressures to the symbology of their respective ecosystems, putting upward pressure on their currency prices.