Last week, someone broke into the BNB Chain Bridge and used fake withdrawal proofs to get exactly 2,000,000 BNB. At the time, the net value of the stolen BNB was around $566 million. Now that Binance has finished its twenty-first quarterly burn of BNB tokens, the losses from last week’s bridge attack have been made up for.
When BSC chain validators stopped the network because of the attack, the hacker lost most of these coins. The network did a hard fork to fix some of the damage, but the hacker was still able to move around $100 million to other chains.
Even though no users should have lost anything, it is against the rules for BNB, which is a deflationary currency, to make more coins. This is done by Binance buying back BNB every three months and by a mechanism on the blockchain that burns a part of BNB transaction fees in real time.
In all, over two million BNB were destroyed in the burn.
BNB is the native token of the BNB Chain, which used to be called the Binance Smart Chain and is a competitor to Ethereum. A “burn” is the permanent removal of tokens from a cryptocurrency’s supply, which is often done to combat inflation. Today’s burn took out of circulation 2,065,152.42 BNB, which at current rates is worth about $549 million.
Prior to July, 1.96 million tokens valued at $444.6 million were burned by Binance. The quarterly burns used to depend on how much Binance made from BNB transactions on its exchange, but this has been changed to an “auto-burn” mechanism based on a formula.
The formula computes the amount of BNB to burn depending on the number of BNB chain blocks mined during the quarter and the BNB price. In general, the higher the coin’s price at a particular moment, the greater the amount of BNB burned each quarter.
Cover: BNB coin – Universal public domain.
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