Binance Smart Chain (BSC) developers have proposed measures to maintain the deflationary model of Binance Coin (BNB/USD) and increase its intrinsic value. The company revealed this news through a blog post earlier today, noting that the developers are considering introducing a new Binance Evolution Protocol, BEP-95.
According to the blog post, this BEP introduces a burning mechanism into the economic model of the BSC, making BNB’s tokenomics more dynamic. The concept behind this BEP is to expedite the burning process of BNB and make BSC more decentralized by burning a portion of the gas fees. By burning a fraction of the gas fees, BNB’s supply will decrease, pushing its price higher as demand increases.
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Reportedly, BEP-95 is dependent on the activity of the BSC network. As such, it will continue decreasing the supply of BNB even after the scheduled burns by Binance.com reach the target supply of 100 million BNB in circulation.
Explaining how BEP-95 would work, the developers noted that each block would burn a fixed ratio of the gas fee that validators in each block collect. BNB holders will be able to adjust the burning ratio through governance. The gas fees collected in each block would be split between two system smart contracts. These are the System Reward Contract and the ValidatorSet Contract.
The developers further disclosed that implementing this BEP might minimize the amount of BNB that validators and delegators receive from staking. However, the fiat-dominated value of their rewards might increase, seeing as decreasing the amount of BNB would increase the coin’s value.
BNB set to continue rallying
This news comes after Binance.com completed its 17th quarter burn on October 18 after destroying 1,335,888 BNB worth $640 million (£464.67 million). Combined with Bitcoin’s (BTC/USD) ripple effect on the crypto market, this burn helped BNB surge past $500 (£363.62) on Wednesday.
This bullish momentum saw BNB climb as high as $505.27 (£367.46), setting a new 30-day high. However, the coin failed to maintain the rally and retraced the growth. At the time of writing, BNB is changing hands at $480.33 (£349.52) after gaining 1.38% over the past 24 hours. Nonetheless, the coin has added over $60 (£43.65) since the start of the month.
According to TradingView, BNB’s technical indicators are bullish, with Oscillators and Moving Averages in the 1-day chart pointing to a strong buying force. Although BNB’s volume has plunged 19.91% over the past 24 hours, the renewed buying force might trigger further gains.
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