On April 16, 2025, BNB Chain completed its 31st quarterly token burn, permanently removing 1,579,207.72 BNB from circulation, equivalent to approximately 916 million USD at the time of execution. This is part of a long-term deflationary strategy aimed at reducing the total supply of BNB to 100 million tokens.
Impact Analysis
1. Impact on Supply and Value
The token burn reduces the total supply of BNB, currently around 139.3 million tokens, with more than 40.8 million BNB expected to continue being burned in the future. The basic economic principle shows that if demand remains constant or increases, the reduction in supply will increase the value of the asset. However, the current price of BNB does not immediately reflect this impact, trading around 582.9 USD, down slightly 0.85% in the past 24 hours.
2. Token Burn Mechanism
BNB uses two token burn mechanisms:
• Quarterly Auto-Burn: Automatically calculates the amount of BNB to be burned based on the price of BNB and the number of blocks created on the BNB Smart Chain during the quarter, ensuring transparency and independence from the Binance exchange.
• Real-time Burn (BEP-95): Burn a portion of the gas fee in each block, helping to continuously reduce the supply of BNB in real-time.
3. Long-term Potential
The periodic token burn reinforces confidence in BNB Chain's deflationary strategy, facilitating long-term price increases, especially if the demand for BNB in DeFi, NFT, and Web3 applications continues to rise. However, investors should note that the price of BNB also depends on many other factors such as overall market volatility, regulatory conditions, and the development of the BNB ecosystem.
Conclusion
The 31st BNB burn is a significant step in BNB Chain's deflationary strategy, contributing to the scarcity and potential value of BNB in the long term. However, investors should closely monitor other market factors to make reasonable investment decisions.