Binance Launches New Auto-Burn Mechanism for Binance Coin, to Replace Quarterly Burn Cycles

Science, Technology, and Innovation

Posted on

[How to Download]

Note : Use Download Manager Like IDM Or ADM For ⚡ Instant download!

Binance, the cryptocurrency exchange which is currently the largest in the world has decided to drop its quarterly coin burn mechanism for a better, more transparent, and predictable token auto-burn mechanism for BNB, Binance's native token. According to the announcement, the move came as a result of increased demand for a healthier blockchain system from Binance Smart Chain (BSC) users and BNB communities. Until now, Binance had two BNB burning mechanisms in place, a real-time burning of a percentage of gas fees on the BSC and the other, a quarterly burn based on Binance's Accelerated Burn Program, which the BNB auto-burn mechanism replaces.

“We've been listening closely to the Binance Smart Chain (“BSC”) and BNB communities-and we are proud to announce the implementation of a new BNB Auto-Burn procedure effective immediately,” Binance stated in a blog post.

Coin burning is a common mechanism through which altcoin creators control the supply of tokens in circulation. In most cases, including Binance, the process removes from circulation BNB tokens by sending them into an inaccessible wallet. The burning process will be both verifiable and objective, following the deployment of the new system.

Similar to gas on the Ethereum network, BNB is Binance's native token and is used to fuel transactions on the Binance Smart Chain. However, Binance does not control or operate BSC, thus leaving BNB to be supported by a community of users and delegators.

The change also means that the amount of BNB burned will no longer depend on Binance's profit but on the price of BNB and the level of BSC activity. As mentioned, the change also aims to enhance the level of transparency and predictability of the BNB community when conducting transactions.

The new BNB auto-burn mechanism is expected to remove about BNB 1.69 million in a quarter and will be halted when the total circulation of BNB drops below 100 million.

“BNB Auto-Burn will be both objective and verifiable, independent of revenues generated on the Binance CEX through the use of BNB and will be automatically adjusting in that the burn amount will be based on the price of BNB, which, in turn, reflects the supply and demand for BNB, as well as the number of blocks produced during a quarter calculated based on on-chain information, ” the announcement states.


Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

.

Russian Government Increases Scrutiny of Crypto Market to Trace, Prevent Tax Evasion

The crypto market is under high scrutiny in Russia as the government there is trying to prevent people from evading taxes using these untraceable cryptocurrencies. During an interview, Danniil Egorov, the head of the Russian Federal Taxation Service (FNS) expressed concerns about the negative impact, cryptocurrencies could make in the national treasury if not monitored properly. According to Egorov, these decentralised crypto tokens are capable of causing “significant erosion” to Russia's tax base. The FNS is now exploring ways of responding to crypto tax evasions as well.

“If we talk about cryptocurrencies, then we are now quite closely engaged in this market, realising that this system of calculations can create a fairly significant erosion for the tax base,” a report by Russian media RBC Group quoted the tax official as saying on Monday, November 22.

Revealing plans of installing automated tracking systems to process big data volumes, Egorov said that it is only a matter of time that the “untraceable” link that makes the crypto space unique, would become traceable.

“Technologies are used, anonymisation is used in terms of providing services by various fraudsters, of course. When you get into the digital space, you still leave a trail somewhere. And it's a matter of time before this trail is identified,” the FNS official added.

Presently untraceable in nature, cryptocurrencies are decentralized digital finance system where records are maintained using cryptography, and not any bank or physical intermediary.

As of January 1, 2021, cryptocurrencies were declared “allowed” in Russia — but not to be used as an exchange for goods and services. Russians can mine, trade and hold cryptocurrencies — but using them as a payment option can push people behind the bars, as per a report by Forbes.

While the Russian government has spoken about creating the country's own regulated digital currency, holding undeclared cryptocurrency between $1,300 (roughly Rs. 97,500) and $13,000 (roughly Rs. 9.7 lakhs) is a finable and jail-time offence in the nation.

Regulating Cryptocurrency Around the World

Along with Russia, other nations are also looking at ways to stitch taxation with cryptocurrencies.

In India, for instance, the federal finance ministry has formed a new committee to find out if income made by cryptocurrency trading could be taxed.

Earlier this month, US President Joe Biden also signed a new law which includes tax reporting provisions that apply to cryptocurrencies.

Meanwhile, the cryptocurrency market is booming internationally. Presently, the global crypto market capitalisation is around $2.9 trillion (roughly Rs. 2,15,66,720 crore) as per the data by CoinMarketCap.


Interested in cryptocurrency? We discuss all things crypto with WazirX CEO Nischal Shetty and WeekendInvesting founder Alok Jain on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.
Affiliate links may be automatically generated – see our ethics statement for details.

.