BEP-95: Introduce Real-Time Burning Mechanism

[victor-cage]

BEP-95: Introduce Real-Time Burning Mechanism

1. Summary

This BEP introduces a real-time burning mechanism into the economic model of BSC.

2. Abstract

To speed up the burning process of BNB and make BSC more decentralized, part of the gas fee will be burned. It includes two parts:

• A fixed ratio of the gas fee collected by the validators will be burned in each block.
• The burning ratio can be governed by the BSC validators.

3. Status

This BEP is a draft.

4. Motivation

The burning of gas fees can speed up the burning process of BNB and improve the intrinsic value of BNB.

The BNB holders will decide how to dispatch the gas reward of BSC.

Though the staking reward of the validators and delegators may decrease in BNB amount, the reward value in dollars may increase in the long run with the increase of BNB value and a more active ecosystem.

5. Specification

5.1 Gas Fee Distribution

As BNB is not an inflationary token, there will be no mining rewards as what Bitcoin and Ethereum networks generate, and the gas fee is the major reward for validators. As BNB is also utility tokens with other use cases, delegators and validators will still enjoy other benefits of holding BNB. The gas fee is collected each block and distributed to two system smart contracts:

1. 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.
2. 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.

5.2 Burning Mechanism

A governable parameters: burnRatio will be introduced 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;

The initial setting:

• burnRatio = 10%

5.3 Governance

The change of burnRatio will be determined by BSC Validators together through a proposal-vote process based on their staking.

This process will be carried on Binance Chain, every community member can propose a change of the params. The proposal needs to receive a minimum deposit of BNB (2000BNB on mainnet for now, refundable after the proposal has passed) so that the validator can vote for it. The validators of BSC can vote for it or against it based on their staking amount of BNB.

If the total voting power of bounded validators that votes for it reaches the quorum(50% on mainnet), the proposal will pass and the corresponding change of the params will be passed onto BSC via cross-chain communication and take effect immediately. The vote of unbounded validators will not be considered into the tally.

6. License

The content is licensed under CC0.

[48ClubIan]

Doesn't look like a good proposal.
Ethereum introduces this real-time burning while it continues issuing new ETH thus increasing total supply, which is not even an issue for BSC.

Endless deflation will corrupt the economy. People will rather hold than use BNB, when everyone does this, BNB will die.

[invinciible]

IMO. This does solve the problem of Binance quarterly burn but for the long term with a limited total supply, it shouldn't be defamatory.

[CryptoTW]

Binance quarterly burn + this real-time burning will make BNB more valuable.

[danzee1]

Doesn't look like a good proposal. Ethereum introduces this real-time burning while it continues issuing new ETH thus increasing total supply, which is not even an issue for BSC.

Endless deflation will corrupt the economy. People will rather hold than use BNB, when everyone does this, BNB will die.

Quarterly burns are slow & often don't reflect in asset value at all ... I think those Quarterly burns should be done via BEP-95 protocol ...
so once target achieved , decay the protocol ... in this way we can maintain things ... means making it a temporary protocol whose task is to rapidly remove BNB from circulation (equal to BNB Quarterly burns targets) ....

[CryptoTW]

In fact, Binance quarterly burn doesn't burn anything(just burn team locked part), the Real-Time Burning Mechanism is "REALLY" burning from Market.

[danzee1]

In fact, Binance quarterly burn doesn't burn anything(just burn team locked part), the Real-Time Burning Mechanism is "REALLY" burning from Market.

What about Burning Tokens equal to Quarterly burn total target via BEP-95 (a temporary protocol ) + unlocking some BNB from Team wallet to increase rewards for staking for some period of time ?

[crypto-rsi]

Doesn't look like a good proposal. Ethereum introduces this real-time burning while it continues issuing new ETH thus increasing total supply, which is not even an issue for BSC.

Endless deflation will corrupt the economy. People will rather hold than use BNB, when everyone does this, BNB will die.

Doesn't make sense holding a coin makes that coin die, people will continue and even attract higher users and also make it more valuable at the same time.

[Fattouche]

Doesn't look like a good proposal. Ethereum introduces this real-time burning while it continues issuing new ETH thus increasing total supply, which is not even an issue for BSC.

Endless deflation will corrupt the economy. People will rather hold than use BNB, when everyone does this, BNB will die.

The benefit of POSA is that proposals can be added/removed much faster than EIPs. I would like to see some well defined target of BNB that this proposal operates until, however as CryptoTW said the binance burns are effectivley useless for any other reason than they convince BSC users that Binance is trustworthy. I can see from your POV as a validator you want more money but I don't buy the idea that people will stop using BNB because there is not much supply. The life of BSC does not depend on the value of the asset that backs it, it depends on the ecosystem. It's fairly easy to scale down the cost of gas fees as BNB rises in value.