Get to know BNB Auto-Burn and how it works

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Bittime - Binance Coin (BNB) serves as the native cryptocurrency in the Binance ecosystem, debuting in 2017. Initially introduced as anERC-20on the Ethereum blockchain, BNB now has a total supply of 200 million. However, in 2019, Binance initiated its mainnet swap, facilitating the migration of all BNB tokens to BNB Chain.

BNB Chain consists of two blockchains, each backed by BNB:

• BNB Beacon Chain: Previously known as Binance Chain, this blockchain manages the governance functions of BNB Chain, including voting and staking processes.
• BNB Smart Chain (BSC): Formerly known as Binance Smart Chain, this blockchain uses the Ethereum Virtual Machine to support smart contracts. It maintains complete compatibility with Ethereum tools and decentralized applications (DApps).

Today, the native Binance Coin plays an important role in the Binance ecosystem. It powers the exchange operations of Binance and Binance.US, along with many other applications built on the BNB Chain. Notable examples include PancakeSwap, Biswap, ApeSwap, and Autoshark Finance, among a long list. Additionally, Binance continues to lead as the largest crypto exchange by trading volume, becoming one of the leading exchanges worldwide.

Understanding Coin Burn

Coin burn refers to the process where a crypto project intentionally destroys a portion of its coins. This practice is often done to reduce the circulating supply, which will then increase the value of the remaining coins. Burned coins are transferred to a dead crypto wallet with an unknown private key, making them unspendable forever.

Coin burns are usually done on a quarterly or semi-annual basis. For example, Binance is committed to burning BNB coins every quarter until 100 million BNB is destroyed. The initiative aims to maintain a total supply of 100 million BNB — the maximum possible supply of BNB.

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BNB Auto-Burn Mechanism

From a technical standpoint, BNB auto burning uses on-chain data from the BNB Smart Chain to calculate the amount of BNB to burn. This mechanism ensures adjustment of the amount of combustion.

Burn rates are also influenced by supply and demand dynamics. As a result, the drop in BNB price triggers an increase in the burn rate. As highlighted earlier, coin burning aims to increase the value of a cryptocurrency.

BNB auto-burn operates independently of BNB trading volume on Binance, aiming to provide a verifiable, objective and transparent process to the BNB community.

The goal is to maintain the auto-burn mechanism until it reaches 100 million coins. This process is automated and operates according to the formula outlined below:

Source: cointelegraph.com

In the above equation:

• B represents the total amount of BNB to be burned.
• N represents the number of blocks generated on the BNB Smart Chain during the quarter. The average block time is 3 seconds, which results in approximately 1,200 blocks generated per hour or approximately 2,592,000 blocks per quarter.
• P denotes the average price of BNB at that time, which is determined based on accepted oracle providers, such as ChainLink, for BSC. Average prices fluctuate in the range of 10% to 20% per day.
• K is initially set at 1000 and serves as a constant price hold. The value is subject to change and depends on the BNB Smart Chain community. Members can submit BEP proposals and provide community votes to update these values.

How to Buy BNB Coin on Bittime

You can buy and sell JUP coins in an easy and safe way via Bittime. Bittime  is one of the best crypto applications in Indonesia which is officially registered with Bappebti. ENJ is available on Bittime with  BNB IDR and BNB USDT pairing.

To be able to buy BNB/IDR and BNB/USDT tokens on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of Bittime assets is IDR 10,000. After that, you can purchase BNB coins in the application.

More Complete Guide How to Buy BNB on Bittime

Monitor the price chart movements  of Binance Coin (BNB) ,  Bitcoin (BTC) ,  Ethereum (ETH) ,  Solana (SOL)  and other cryptos to find out today's crypto market trends in real-time on Bittime. 

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DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.