Binance exchange burns $547M worth of BNB tokens

October 13, 2022 Coin Telegraph

Binance exchange burns 7M worth of BNB tokens

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Binance permanently destroyed $547 million worth of BNB in its 21st quarterly burning event, but the markets remain steady.

Crypto exchange platform Binance has concluded its 21st quarterly Binance Coin (BNB) burn, eliminating around $547 million worth of BNB tokens from its supply.

In an announcement, Binance said that it had destroyed a total of 2,065,152 BNB tokens which is valued at just below $600 million at the time of writing. The exchange also mentioned that an added 4,833.25 BNB was burned through its Pioneer Burn Program, a mechanism that helps users who lost their digital assets through honest mistakes.

The exchange covers these losses and returns the tokens to users, depending on specific conditions. These tokens are then deducted from the total quarterly burn by Binance.

#Binance Completes 21st Quarterly #BNB Burn!

2.06m #BNB has been burned pic.twitter.com/VHvt1E4FzB
— Binance (@binance) October 13, 2022

Previously, Binance committed to burning 20% of its profits for each quarter. With the latest burn, the exchange could have profited by $2.7 billion during the third quarter of 2022.

The 21st quarterly BNB burn is one of the biggest amounts burned in BNB burn history in terms of its fiat value. Back in 2021, around $600 million in BNB was burned, marking the largest BNB burn record.

Despite the massive amount burned, the burning efforts don't seem to have a huge impact on the Binance Coin markets at the moment, with BNB prices moving slowly downward along with the rest of the crypto market.

On Oct. 3, the exchange also owned up to its commitment to help the Terra Luna Classic (LUNC) investors by burning LUNC trading fees collected on its LUNC/BUSD and LUNC/USDT spot and margin pairs. The exchange announced that in the initial burn, around $1.8 million worth of LUNC tokens were burned.

While some parts of the community are burning tokens, some are burning artworks worth millions of dollars. On Oct. 12, British artist Damien Hirst set some of his physical artworks ablaze during a livestream to complete his nonfungible token (NFT) project called "The Currency."

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Ethereum’s EIP-1559 upgrade launches on Polygon to burn MATIC

January 18, 2022 Coin Telegraph

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MATIC’s supply is likely to become deflationary once fee burning commences, according to estimates by the Polygon team.

The Ethereum upgrade that introduced a partial network fee burning mechanism in August last year has launched on the layer-two scaling network Polygon.

The Ethereum Improvement Proposal (EIP) 1559 upgrade shipped with its London hard fork last summer and has been a success in terms of gas price predictability and network fee burning. The upgrade has now launched on Polygon in an effort to improve “fee visibility.” It went live at block 23,850,000.

The Polygon team announced the upgrade date on Monda, following its successful deployment on the Mumbai testnet.

The EIP-1559 upgrade introduces the same fee-burning mechanism to Polygon, resulting in the destruction of MATIC tokens. It also removes the first-price auction method for calculating network fees, which leads to better cost estimations but does not reduce gas prices.

“The burning is a two-step affair that starts on the Polygon network and completes on the Ethereum network.”

The team stated that, just like Ethereum, the supply of MATIC is likely to become deflationary with 0.27% of the total supply being burned every year, according to estimations. There is a fixed supply of 10 billion MATIC tokens with 6.8 billion currently in circulation.

“Deflationary pressure will benefit both validators and delegators because their rewards for processing transactions are denominated in MATIC,” it added before stating that the upgrade would also reduce spam and network congestion.

Despite being a layer-two network, Polygon has suffered from its own gas crisis recently. Earlier this month, Polygon gas fees skyrocketed, according to Dune Analytics, resulting in some validators failing to submit blocks. The surge in demand was due to a decentralized finance yield farming game called Sunflower Land, which rewarded early adopters before the degens lost interest.

Since going live on Ethereum around six months ago, the upgrade has resulted in the burning of 1.54 million Ether (ETH) to date, according to Ultrasound.money. At current ETH prices, this works out at around $5 billion. The tracker also predicts that Ether issuance will become deflationary by -2.5% per year once “the merge” happens and proof-of-stake becomes the primary consensus mechanism for the network.

MATIC prices have dumped 9% on the day in a fall to $2.22 at the time of writing, according to CoinGecko.

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Ethereum sees first consecutive week of deflationary issuance

November 2, 2021 Coin Telegraph

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More than $65 million worth of ETH is currently being burnt daily by the Ethereum network.

The Ethereum network has seen its first consecutive week of negative supply issuance as bubbling markets drive persistently high transaction fees.

With the highly anticipated London upgrade introducing a burn mechanism into Ethereum's fee market in early August, a small quantity of Ether has since been destroyed with every transaction executed on the network.

With gas prices sustaining at high levels, Ethereum has seen seven consecutive days of deflationary issuance for the network, meaning that more ETH has been removed from supply than created through mining.In order for Ethereum to consistently produce deflationary blocks, gas prices must consistently remain roughly above 150 gwei.

EthHub co-founder Anthony Sassano commented that deflationary Ethereum was not expected until “the merge” — when the Ethereum blockchain is set to merge with Eth2’s Beacon Chain, which is currently expected to occur during the first half of 2022.

According to the Ultrasound.Money fee burning tracker, around 15,000 ETH ($65 million at current prices) is being burnt daily. When factoring in the rate of new ETH being created, WatchtheBurn reports a weekly net issuance of minus 8,034 ETH (roughly $34 million) at the time of writing.

Since the London upgrade, more than 724,400 ETH worth $3.1 billion has been permanently destroyed.

According to Etherscan the average cost of an ERC-20 token transfer is now a painful $46. Doing something a little more complex such as providing liquidity to a DeFi protocol or making a token swap on Uniswap can cost as much as $140 at the moment.

Sassano emphasized that the upgrade has not increased gas prices but has made them more predictable. “Contrary to popular belief, EIP-1559 has not increased gas prices and has in fact helped considerably with spikes in demand (such as during hyped-up NFT mints) which has led to a smoother network overall,” he said.

According to the Bankless Ethereum Q3 network report, transaction value settled for July to September this year was a whopping $536.5 billion, an increase of almost 400% since the same period last year.

Despite Ethereum’s first deflationary week, many Ether advocates are seeking to encourage users to migrate to transacting using its emerging layer-two ecosystem.

According to L2beat, there is a record $4.68 billion in total value locked across the various L2 networks. This TVL has surged almost 500% over the past two months as Ethereum users increasingly seek out ways to avoid those excruciating transaction fees.

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