The Different Ways of Burning Tokens, from Binance Coin (BNB) to HUH Token (HUH)

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On January 17th, Binance burned over 1.68 million BNB, which is equivalent to USD 792 million in today’s market. But how do Binance’s quarterly burns work – and do they differ from token burns carried out by its altcoin competitors, such as Ripple (XRP), HUH Token (HUH) and Stellar (XLM)?

Binance has a target of burning 100 million BNB tokens and is aiming to withdraw half of the total quantity of BNB from circulation, or 100 million tokens out of a total supply of 200 million. The amount burned today is equal to 0.84% of Binance’s initial supply. 

Burns like this one are designed to limit a cryptocurrency’s supply while maintaining reasonable prices by increasing demand for the tokens already in circulation. Tokens are sent to an inactive address to perform burns. Binance began this practice in 2017 and the latest one marks the 18th burn.

Burn amounts were previously determined based on BNB usage and revenue earned by Binance’s exchange. The 17th quarterly burn of BNB resulted in 1.34 million BNB being removed from circulation. Other burns have been as small as 808,000 BNB and as large as 3.6 million BNB. However, this quarter’s burn was the first to apply a new ‘Auto-Burn’ model, which bases the burn amount on market prices and the number of Binance Smart Chain blocks created.


The goal of this new model is to be more objective than the old one. Binance CEO, Changpeng Zhao, stated that the Auto-Burn model will allow “greater autonomy, transparency and predictability.” The Chinese-Canadian business executive is known for striving for transparency in Binance operations. After receiving feedback from the community, the new model was chosen.

Although Binance’s Quarterly Burns are one of the most prominent examples, altcoins can utilize a variety of different ways to burn tokens.

Ripple (XRP)

Ripple (XRP) limits the number of transactions that can be made on its network, reducing the risk of a DDoS attack (which disrupts the normal traffic of a service, server or network). Another method is using the fees as ‘gas’ to make a transaction go faster than usual. With each transaction, the supply of XRP circulating on the market is reduced.

HUH Token (HUH)

In the Binance Smart Chain and Ethereum blockchains, HUH has a burn wallet. When tokens are sent to that wallet, they are permanently removed from circulation, increasing the value of circulating tokens due to scarcity. 

In contrast to traditional government-backed fiat-currencies, the HUH Token is designed to display a deflationary trait through its ecosystem dynamics, and it is expected to increase in value over time owing in part to scheduled token burns. The MPC will make the schedule of token burns and the number of tokens burned at each transaction visible to the community.

Despite being on the crypto market for only 2 months, HUH conducted their first burn on December 15th and burnt a whopping USD 1 million worth of HUH tokens. Since then, HUH has seen exponential growth in its value and experienced a price jump of 6000% within weeks of its launch. 

Stellar (XLM)

A token burn of 55 billion XLM was carried out by Stellar (XLM) to boost the coin’s value. The supply of XLM was virtually cut in half as a result. In the short term, the effect on XLM was immediate, moving from USD 0.069 to USD 0.088 in a single day (around 25% from November 5th to November 6th).

For more information visit:

Buy On HUH Website- https://swap.huh.social/

Buy On PancakeSwap: https://pancakeswap.finance/  

Buy On Uniswap: https://app.uniswap.org/#/swap

Website: https://huh.social/

Telegram: https://t.me/HUHTOKEN

 


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