Binance today completed its 21st quarterly burn of BNB tokenstokens, effectively compensating for the losses incurred from its bridge hack last week.
BNB is the native cryptocurrency of the BNB Chain, formerly known as the Binance Smart Chain, which is a competitor to EthereumEthereum. A “burn” is when tokens are permanently removed from a cryptocurrency’s supply, and is generally used as a measure against inflation. Today’s burn took 2,065,152.42 BNB, worth over $549 million at current prices, off the market.
By comparison, an exploit of the BNB Chain bridge last week netted the attacker exactly 2,000,000 BNB, conjured out of thin air using artificial withdrawal proofs. The net value of the stolen BNB was worth roughly $566 million at the time.
The majority of those coins were lost to the hacker when BSC chain validators froze the network following the attack. The network has since conducted a hard fork to remedy some of the damages, but the hacker still managed to move about $100 million in funds to other chains.
Though, technically, no users lost funds during the hack, minting new coins is a no-no for BNB, which is supposed to be a deflationary token. This is accomplished through quarterly BNB buybacks from Binance, as well as an on-chain feature that burns a portion of BNB transaction fees in real-time.
BNB Chain Upgrade Restores Cross-Chain Transfers Following Binance Bridge Hack
BNB Smart Chain successfully deployed an upgraded version of its network, resolving several cross-chain issues following the multi-million dollar bridge hack last week. “All relevant funds stuck in cross-chain transfers will now have arrived in your target wallet or source,” said BNB Chain on Wednesday. “Transfers between BNB Beacon Chain and BNB Smart Chain are now functioning normally.” According to Binance, the upgrade had no effect on the trade of Binance Smart Chain tokens at the exchange...
The quarterly burns were formerly based on Binance’s profits from BNB trades at its exchange, but have since changed to a formulaic “auto-burn” model. The formula calculates how much BNB to burn based on the number of BNB chain blocks during that quarter, and the price of BNB. In general, the higher the price of the coin at a given time, the more BNB will be burned each quarter.
Binance’s previous burn in July saw 1.96 million tokens burned, worth $444.6 million at the time.
Binance is also helping burn Luna Classic tokens (LUNC) using roughly the same approach as its previous quarterly burn model. It takes fees collected from LUNC trades and uses them to buy back the token from the market.
Terra’s Luna Classic Pumps 40% as Binance Plots Supply Burn
Luna Classic, the original token of the failed Terra blockchain, appears to be making a comeback following an announcement that the world’s largest crypto exchange, Binance, has a plan to cut the token’s supply. The token, which trades as LUNC, is up roughly 40% in the last 24 hours, according to CoinGecko, making a miraculous return to the top 35 cryptocurrencies by market cap. Still, its recent gains will likely not mean much to the Terra bulls who bought in at over $100 in April. At the mome...
Binance’s periodic burns will cease taking place once the BNB supply reaches fewer than 100,000,000 tokens—less than 50% of the token’s supply from the time it first launched.
