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Binance burns more tokens than last week’s hacker took

Recent hack prompts Binance to burn tokens

Image source: Coin Gape

Binance recently completed its 21st quarter of burning BNB tokens to offset losses from last week’s bridge hack.

BNB burn

BNB is the native cryptocurrency of BNB Chain (formerly called Binance Smart Chain), which competes with Ethereum.

The burning process occurs when tokens are permanently removed from the cryptocurrency stock.

It is usually used as a measure of inflation.

The Binance burn removed 2,064,152.42 BNB from the market.

The tokens were worth over $549 million at current prices.

The hack

Last week, a hacker took advantage of the BNB Chain bridge, obtaining 2,000,000 BNB with artificial withdrawals.

The stolen BNB at the time had a net worth of approximately $566 million.

Most of the coins were lost when BSC chain validators froze the network after the heist.

Since then, the network has had a hard fork to repair some of the damage.

A hard fork is a patch release described as “temporary” to enable cross-chain functionality between BNB Beacon Chain and Binance Smart Chain.

However, the hacker managed to transfer more than $ 100 million in funds to other chains.

After the hack

Despite the hacking, no users lost money during the heist, leading to a rule banning the minting of new coins for BNB, which is intended as a deflationary token.

The promotion was achieved through Binance’s quarterly BNB purchases.

It was also done with an on-chain feature that burns some of the BNB transaction fees in real-time.

Quarterly burns

Previously, the quarterly burns were based on Binance’s profits from BNB’s operations on its exchange.

However, Binance has switched to a formal “auto-burn” model.

The formula calculates the amount of BNB to burn based on the number of blocks of BNB chains available during the quarter, along with the price of BNB.

Generally speaking, the higher the price of the coin at that time, the more BNBs will be burned each quarter.

The company’s July fire burned 1.96 million tokens, which amounted to $444.6 million that month.

Other notes

Binance is also helping burn Luna Classic Tokens (LUNC) using the same approach as the latest quarterly burning model.

Combustion cost fees are collected from LUNC transactions to buy back the token from the market.

Binance’s periodic burns will stop once BNB supply reaches less than 100,000,000 tokens, less than 50% of the token supply since the initial launch.

Reference:

Binance burns as many BNB tokens as hacker minted from thin air

Opinions expressed by Coin Week contributors are their own.

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