BNB is a native utility token of the Binance exchange based on gas fees. Each block has a fixed gas cost determined by the BSC validators. An automatic burn mechanism reduces the total supply. The amount of BNB burned is adjusted based on the price and number of blocks in the BNB Smart Chain (BSC) during the quarter. This mechanism is called Byzantine Fault Tolerance (BFT).
The token was created in 2019 and was used to pay transaction fees on Binance. By 2021, BNB began trading on other exchanges. The token’s market capitalization has grown to 3rd place behind Bitcoin and Ethereum. As early as May 2021, ETH reached its All-Time High of $686.31.
At the end of 2021, Binance abandoned the concept of a quarterly burn of Binance Coin (BNB) tokens in favor of the Auto-Burn mechanism for their automatic retirement. The mechanism will ensure greater transparency of the process. The higher the price of BNB, the fewer tokens the mechanism will withdraw from circulation. The program will be closed when the total number of burned coins reaches 100 million.