Last week’s cross-chain bridge hack leads Binance to burn tokens

Binance recently finished its 21st quarterly burning of BNB tokens to offset losses from the hacking of Binance Bridge last week.

BNB burn

BNB is BNB Chain (formerly called Binance Smart Chain) native cryptocurrency token.

It is the company’s competing token with rival cryptocurrency Ethereum.

Burning is a Binance process of permanently removing tokens from cryptocurrency inventory.

It is generally used as a measure against inflation.

Binance Burn burned exactly 2,064,152.42 BNB from the market.

The tokens were worth over $549 million at current prices when they were burned.

The hack

Last week, a hacker exploited the BNB chain bridge and managed to get over 2,000,000 BNB using artificial withdrawals.

At the time, the stolen BNB had a net worth of around $566 million.

After the theft, most of the coins were lost when the BSC chain validators froze the network.

Since then, the network has had a hard fork in undoing some of the damage.

A hard fork is a patch release that is said to be “temporary” to enable cross-chain functionality between BNB Beacon Chain and Binance Smart Chain.

However, the hacker managed to transfer over $100 million in cash to other channels.

After the hack

Despite the hack, no Binance user lost any funds in the theft.

Instead, it resulted in a rule prohibiting the minting of new coins for BNB, which was intended as a deflationary sign.

Binance’s quarterly BNB buybacks led the action.

This has also been achieved with an on-chain feature that burns some of the BNB transaction costs in real-time.

Quarterly burns

Previously, the quarterly burns were based on Binance’s profits from BNB’s operations on the Binance trading platform.

From there, Binance has moved to a formal “auto-burn” model.

The formula calculates the amount of BNB to burn based on the number of chain blocks of BNB available during the quarter, along with the price of BNB.

In general, the higher the price of the coin at that time, the more BNBs will be burned each quarter.

The company’s fire in July burned 1.96 million tokens, for a total of $ 444.6 million that month.

Other notes

Binance is also helping to burn Luna Classic Tokens (LUNC) using the same approach as the latest quarterly burning model.

The burn takes a fee from the LUNC tokens to redeem the token from the market.

Periodic Binance burning will only stop when the BNB supply reaches less than 100,000,000 tokens, which is less than 50% of token supply since the initial launch.


Binance burns as many BNB tokens as hacker minted from thin air