Binance Smart Chain to Introduce Fee-Burning Mechanism


The first contributors are already not satisfied with the possible changes to come

The BEP-95 update proposal has been introduced on public Binance Chain Github, which will introduce a real-time fee-burning mechanism just like the one that is being utilized now on the Ethereum chain. The main objective of the new mechanism inside the chain is to make the BNB more valuable and speed up the engraving process.

Two main goals of the mechanism are the speeding up of the burning process of BNB and further decentralization of BSC. The new update includes two mechanisms that will impact the network: the burning of the fixed costs currently distributed to validators and a manageable burn rate.

With the introduction of the burning mechanism for BSC, the process of the BNB burn will significantly increase, which will positively impact the intrinsic value of the coin. Previously, due to a deflationary effect, the price of Ethereum had risen significantly in addition to an overall positive market structure.

BNB holders will be the ones to decide the redistribution of gas rewards on the network. The contributor expects the rewards for validators and delegators to decrease in BNB. But since the circulating supply might decrease significantly, the contributor expects to see a rise in USD value after the update.

Since there are no mining rewards inside the BSC network like those of the Bitcoin and Ethereum chains, the gas fees are redistributed among the validators. On the BSC network, the gas fee is collected from each validated block on the network and then distributed among two smart contracts.

If the network accepts to implement the update, the governable parameter “burnRatio” will be introduced into the network. At the end of each block, the validator will be able to invoke the deposit function, which will then initiate the burning mechanism. The engraving of the parts will be carried out by transferring the charges to the specified engraving address.


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