The destruction mechanism of $BNB BNB mainly includes two types: BEP-95 real-time destruction and automatic destruction, as follows:

BEP-95 Real-Time Destruction Mechanism

Principle: BEP-95 is a Binance Improvement Proposal that adds a real-time destruction mechanism to the Binance Smart Chain (BSC). Validators on the Binance Smart Chain collect gas fees from each block, and the BEP-95 mechanism automatically destroys a portion of the BNB. The more users utilize the Binance Smart Chain, the more gas fees are generated, and the more BNB is destroyed, effectively accelerating the destruction process.

Features: It completely relies on the Binance Smart Chain network, and even after the total supply of BNB reaches the target of 100 million, this mechanism will continue to destroy BNB.

Automatic Destruction Mechanism

Principle: In December 2021, Binance announced the replacement of the previous quarterly destruction based on the trading volume of BNB on the Binance exchange with a new automatic destruction of BNB. The automatic destruction mechanism adjusts the quantity of BNB destroyed based on the BNB price and the number of blocks produced on the Binance Smart Chain each quarter. The formula is: , where represents the amount of BNB to be destroyed, represents the total number of blocks produced on the Binance Smart Chain this quarter, is the average price of BNB, and is a fixed price anchor, initially set at 1000.

Features: It occurs once every quarter, providing an auditable and objective process independent of the centralized Binance exchange, which enhances the transparency and predictability of the BNB community. Automatic destruction will stop when the total circulating supply of BNB falls below 100 million.