Binance Burned over 2 million BNB Tokens to compensate for the losses from last week’s hack
Last week, Binance lost over 2 million BNB tokens to a bridge hack. On 14th October, Binance burned over 2 million BNB tokens to compensate for the losses from last week’s hack, and it was its 21st quarterly burn.
BNB, formerly known as Binance Smart Chain, is the native cryptocurrency of the BNB Chain and is a strong competitor to Ethereum. In cryptocurrency, a burn is used as a measure against inflation, in which the tokens are permanently removed from a cryptocurrency’s supply.
In 14th October’s burn, Binance took 2,065,152.42 BNB tokens, whose worth at that time was $549 million, off the market. But the BNB tokens that Binance lost in last week’s bridge hack were worth roughly $566 million at the time.
The hackers minted those BNB tokens from thin air by using artificial withdrawal proofs. After the hacker’s attack, the BSC chain validators froze the network, due to which hackers lost the majority of those coins. Despite the network’s hard work to remedy some of the damages, the hackers were able to move about $100 million in funds to other chains.
During that hack, no users lost funds, which was good news for its users. But minting new coins for BNB is Disgusting, which is supposed to be a deflationary token. The BNB will accomplish these token losses from quarterly BNB buybacks from Binance and with an on-chain feature that burns a portion of BNB transaction fees in real-time.
The BNB burns of Binance were based on Binance’s profits from BNB trades at its exchange, but now it has changed into a formulaic auto-burn model. With the new formula, Binance burns more BNB each quarter when the price of the coin at a given time is high.
Binance has previously burned million of tokens, such as in July, they burned 1.96 million tokens worth $444.6 million at the time.