BNB's burn mechanism is like a precise time machine, pushing this ecosystem toward scarcity.

In the latest quarter, 1.37 million BNB were burned, valued at $1.27 billion at the then-current price. Interestingly, this is 70,000 less than the previous quarter. This seemingly subtle change has caused many newcomers to worry—Is the deflationary pressure weakening?

As someone who has been observing the crypto market for a long time, I believe this actually proves that the BNB ecosystem is operating very healthily. The cleverness of the burn mechanism doesn't lie in fixed numbers, but in its ability to dynamically adjust based on market conditions. This is true deflationary strategy.

**How the burn mechanism has evolved**

The original idea for BNB was straightforward: a leading exchange would buy back and burn 20% of its profits each quarter until the total supply was cut to 50%, which is 100 million BNB.

In 2021, this mechanism was upgraded. Since then, it no longer directly ties to the exchange's profits but uses a more transparent method—a public formula to calculate how much to burn each quarter.

The new mechanism relies on two key data points: the average price of BNB during the quarter and the number of blocks produced on the BNB Smart Chain. This algorithm makes the burn process more objective, fully automated, and more transparent.

**Another on-chain logic for real-time burns**

In addition to quarterly burns, BNB Chain introduced the BEP-95 protocol in 2021, which is a real-time on-chain burn mechanism. A certain percentage of each transaction's Gas fee is directly burned. The higher the on-chain activity, the more burns occur. This makes the burn truly a sustainable process driven by on-chain ecosystem activity.