Binance Smart Chain Introduce BEP-95 With A Real-Time Burning Mechanism
Binance Chain introduce and propose the new Binance Evolution Protocol, BEP-95. This BEP introduces a real-time burning mechanism into the economic model of BSC, making BNB’s tokenomics more dynamic.
The abstract behind this BEP is to speed up the burning process of BNB and make BSC more decentralized, as part of the gas fee will be burned. The BEP-95 burn is solely dependent on the activity on the BSC network, and it will continue functioning (decreasing BNB supply), even after the scheduled BNB burns by binance.com reach the target supply of 100m BNB in circulation.
Two points before the project start:
- Each block will burn a fixed ratio of the gas fee collected by the validators in each block.
- The burning ratio is adjustable through governance.
Why does BSC need BEP-95?
The BSC network can speed up the BNB burning process and improve its intrinsic value by burning a portion of gas fees. The BNB holders will decide how to dispatch the BSC gas reward.
While implementing this BEP might decrease the total amount of BNB that validators and delegators receive from staking, the fiat-denominated value of their rewards may increase. This burning mechanism would further reduce BNB supply; thus, increasing demand would drive the BNB value higher.
BEP-95 Specification
Gas Fee Distribution
By design, BNB is a deflationary token. There is no mining algorithm that would enable the mining of new BNB and reward miners (validators), and the supply is regularly decreasing according to Binance’s scheduled BNB burns. BNB is a utility token with many use cases, and delegators and validators will still enjoy other benefits stemming from holding BNB.
The gas fee is collected each block and split into two system smart contracts:
- System Reward Contract. The contract can possess at most 100 BNB. 1/16 of the gas fee will be transferred to the system reward contract if it possesses less than 100 BNB. The funding within the reward contract is used as cross-chain package subsidies.
- ValidatorSet Contract. The rest of the gas fee is transferred to the ValidatorSet contract. It is the vault to keep gas fees for both validators and delegators. The funding within the contract will be transferred to Binance Chain and distributed to delegators and validators according to their shares every day.
Burning Mechanism
The mechanism will be enabled by introducing Governable parameters: burnRatio in the ValidatorSet Contract. At the end of each block, the Validator will sign a transaction to invoke the deposit function of the contract to transfer the gas fee. The burning logic is implemented within the deposit function that burnRatio * gasFee will be transferred to the burn address
RESOURCES
https://www.binance.org/en/blog