Binance burned all the BNB tokens that the hacker mined out of nothing
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The 21st quarterly BNB token dump from Binance has ended, thereby the losses caused by the recent bridge hack were leveled.
BNB is the native cryptocurrency of the BNB (Binance Smart Chain) that competes with Ethereum. “Burning” is the process of removing tokens from the supply of a cryptocurrency and is a measure against depreciation. The burn removed 2,065,152.42 BNB tokens equal to $549 million from the market.
Recently, using a BNB Chain bridge, a hacker obtained exactly 2 million BNB tokens that were created out of nowhere thanks to fake withdrawal proofs. At that moment, the number of stolen tokens was about 566 million dollars.
After the attack, the BSC chain validators froze the network, causing the attacker to lose most of the stolen coins. After that, the network held a hard fork to recover some of the losses. Despite this, the hacker was able to withdraw about $100 million to other networks.
Due to the hack, technically, none of the users lost their funds. Since BNB is a deflationary token, it is prohibited from creating new coins. Every quarter, BNB is bought from Binance and a portion of the BNB transaction fees are burned, this on-chain function is what allows BNB to be a deflationary token.
Previously, quarterly burns were based on Binance's income from BNB transactions on its exchange, but have moved to an auto-burn model. The amount of BNB to burn is calculated from the number of BNB chain blocks per quarter and the BNB value itself. That is, the amount of BNB burned per quarter directly depends on the price of coins.
In July burn, 1,960,000 coins were removed, at that time the total amount of tokens was 444.6 million USD.
In the same way, Binance helps burn LUNC (Luna Classic) coins. The exchange redeems tokens from the market, at the expense of commissions that it receives from LUNC transactions.
The burns will end when the BNB supply is below 100 million tokens, this is slightly less than half of the token supply since their first launch.
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