BNB Chain Burns Over 1.7M BNB in Quarterly Burn. Will Price Follow?

The BNB Foundation, a non-profit firm behind the layer-1 BNB Chain, has completed its 29th quarterly token burn, permanently removing 1.7 million BNB worth approximately $1.07 billion from the coin’s circulating supply. This move is expected to boost the asset’s value.

BNB is the native currency of the BNB Chain, used across various platforms like the BNB Smart Chain, BNB Greenfield, and opBNB, a layer-2 scaling solution.

BNB Chain Implements Token Burns

Token burn is a mechanism for permanently removing a set number of coins or tokens from the circulating supply. The process, aimed at combating inflation, gradually increases the coin’s scarcity and potentially boosts its value. Several blockchain networks and decentralized finance (DeFi) projects have implemented token burns to increase their crypto prices. Examples include PancakeSwap, Bonk, Ethereum, and BNB Chain.

BNB Chain, on its part, implements a token burn once every quarter. This process involves sending BNB coins to an unusable “blackhole” address where they are inaccessible. By decreasing the supply, BNB Chain aims to create a more valuable asset for holders.

Recall that the blockchain executed a token burn in July, where around 1.64 million BNB coins were burnt from the circulating supply. Following its mainnet launch in April 2019, the BNB Chain developer team adopted an auto-burn mechanism to downsize BNB’s total supply to 100 million BNB gradually.

Apart from regular token burns, BNB Chain has been working to increase its on-chain activity and make its network more accessible and interconnected. One significant step was launching a new cross-chain bridge to improve interoperability. This would enable seamless and easy transfers of assets and data between BNB Chain and other networks, making it more straightforward for users to move assets across different blockchains.

Impact on BNB’s Price

BNB’s price did not increase following news of the burn. Still, reducing supply could help raise the asset’s price in the long run. BNB burns have led to price increases in the past, but there is no guarantee that this will always be the case.

At the time of writing, BNB exchanged hands with $577, representing a 1.47% decrease in the last 24 hours.