Binance introduced “Auto-Burn” to burn its BNB tokens continuously instead of once a quarter.
The largest crypto exchange, Binance, made changes to how it burns Binance coins (BNB) and removes them from circulation to better reflect their usage in the Binance Smart Chain (BSC) ecosystem,
In a blog post on December 23, Binance introduced a new system, called Auto-Burn. This system will happen often and replace a quarterly burning schedule that reflects the tokens’ usage on different trading services that the exchange provides.
However, a real-time burning system that burns a part of the gas fees spent on BSC remains.
Launched in April 2020, BSC is a network for decentralized finance (DeFi), a financial system based on smart contracts and Binance coins (BNB) are used to pay transaction fees on BSC and let holders make changes and additions to protocols running atop the chain.
Therefore, the new system will offer more transparency for the BNB community and it is independent of revenues generated on the Binance exchange.
To explain further, the company said that burns will be based on price and supply-demand dynamics for BNB tokens using on-chain data from BSC. This means when BNB price falls, the amount of BNB burned rises to make sure the value removed stays constant and independent of market movements.
Note that burning BNB was initially introduced as a mechanism to increase value and grow Binance.