BEP-95 proposal ignites discussion of Binance Smart Chain burn mechanism
Developers on Binance Smart Chain (BSC) have proposed a new upgrade called BEP-95 that would serve as an attritionary deflationary mechanism burning-off some of the BNB supply for each and every transaction.
BSC already has a significant burning mechanism – Binance burn BNB on a quarterly basis – however, this mechanism is capped as burning a maximum of 100m BNB (half of the 200m BNB total supply).
This limit is the driving reason for the BEP-95 proposition, which has been clearly inspired by the recent EIP- 1559 update (which formed part of the London Hard Fork) and added a deflationary burn mechanism to Ether transactions on the Ethereum network.
This is ON TOP of the 100m #BNB burn committed by @binance.
Only a few may understand burns, which makes it even more attractive. 🔥 https://t.co/BpQH4UlY6j
— CZ 🔶 Binance (@cz_binance) October 22, 2021
Binance Smart Chain (BSC) is burning!
The new mechanism would see a proportion of every transaction and smart contract interaction fee (posited at 10%) get burned instead of being rewarded to the validator that processed the transaction.
Community members would have the power to adjust the proportion of the fee that gets burned through conventional governance mechanisms on the Binance Smart Chain.
Developers are targeting a preeminent concern of BNB – its relative abundance – with the proposal demonstrating a lot of long-term thought and planning in relation to BNB tokenomics.
By inducing a greater degree of scarcity in the supply, developers hope to reduce price volatility and sharpen the competitive edge of BSC and network native BNB against lower-supply rivals such as Ethereum.
This comes following a difficult week for Binance, which saw a Bitcoin (BTC) flash crash down to $8,000.
