Binance Smart Chain (BSC) to start burning fees

By: Ali Raza
Ali Raza
Ali plays a key role in the cryptocurrency news team. He loves travelling during his spare time and enjoys… read more.
on Oct 23, 2021
  • Binance Smart Chain developers have come up with a way to make BNB even more of a deflationary token.
  • Their new proposal would see the burning of a portion of BSC gas fees, which would increase the scarcity.
  • One thing to note is that the stakers and validators would also start receiving fewer BNB tokens.

Binance’s native token, Binance Coin (BNB/USD) has been rallying hard recently, but the exchange has an idea of how to increase its scarcity and, therefore, value even more. According to a new proposal, it appears that Binance Smart Chain’s developers now want to add more measures to the token’s deflationary model by burning BSC fees.

Binance developers want to burn a portion of BSC fees

The new proposal came in the Binance Evolution Protocol, BEP-95. According to what is known, the developers are considering introducing a burning mechanism for a portion of gas fees, which would result in the reduction of the BNB supply. As a result, the coin’s value would go higher, as demand would be increased in comparison to the circulating supply.

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Meanwhile, BNB holders will have to decide how to dispatch the gas rewards. One thing that the developers did point out is that the BEP could result in a decrease of the total amount that validators and delegators could obtain from staking, which is something that the community should have in mind. However, if the coin’s price does grow dramatically, the difference between the total earnings might not be that big after the BEP gets implemented.

BNB is already deflationary by design that Binance came up with within 2017, meaning that a portion of its supply is already being burnt. Binance does regular token burns every three months in order to maintain the token’s value, and it will stop once half of the initial supply has been locked away permanently, and only 100 million BNB remains.

So far, the exchange has conducted 17 quarterly burns. Now, this proposal will speed the burning process up, and it comes just in the middle of a major BNB rally that allowed the coin to breach the $500 resistance this Wednesday. BNB is also the third-largest crypto in the world right now, with Bitcoin and Ethereum still being in the lead.

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