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BEP-95

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BEP-95 is a proposal that is designed to make the BNB network more decentralized through the burning of fees earned as users transact onchain. The core idea behind BEP-95 is to introduce a mechanism that burns a portion of the gas fees in real-time

What is BEP-95 Token?

BEP-95, short for Binance Evolution Proposal 95, effectively reduces the overall supply of the BNB tokens in circulation. This is a significant departure from the traditional method of periodic token burns conducted by Binance as it pushes for more decentralization of the network.

How does BEP-95 Work?

The burning process of BEP-95 is dependent solely on the activity within the BSC network. As transactions occur and gas fees are collected, a predefined ratio of these fees is burned to reduce the total supply of BNB. This mechanism continues independently of Binance’s scheduled BNB burns, which aim to reduce the circulating supply to 100 million BNB.

What are the Features of BEP-95?

The following are some of the features of the BEP-95 proposal:

  1. Real-Time Burning: A fixed ratio of gas fees collected in each block is burned. This continuous burning process ensures that BNB supply decreases the more people make transactions onchain.
  2. Governance Mechanism: The burn ratio can be adjusted through a governance process. BNB holders can propose changes to the burn ratio, which are then voted on by the network validators. This decentralized approach ensures that the community has a say in the economic model of the BNB Chain.
  3. Economic Impact: While BEP-95 might decrease the total amount of BNB that validators and delegators receive from staking, the reduction in supply is expected to increase the fiat-denominated value of BNB. The effect that comes from reducing the total supply of the tokens could drive demand higher. This benefits BNB holders as there is a chance that the worth of their coins in fiat (e.g., USD) will increase.

Conclusion

BEP-95 is a proposal that seeks to improve BNB tokenomics by introducing a real-time burning mechanism. This proposal not only aims to increase the value of BNB by making it more scarce but also works to make the BNB Chain more decentralized.

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