After a slowdown in the crypto market momentum, things are looking pretty calm right now. Is it the silence before calamity or just a relaxation before going moon? Well, only time can answer these questions, so instead of getting stuck into them, let’s explore some of the important things that happened in the crypto space recently, that can impact the crypto market as well as the crypto industry on the whole.
1. Polygon Completed the Hard Fork – How It Affects $MATIC?
Polygon network recently went through the hard fork. This serious update in the network is carried out to increase the performance and some other factors which increase the efficiency of the network. The main purpose of the fork is to reduce gas spikes and reduce the time of finality. Before looking into the fork, it is important to know what is the meaning of those terms. So, the gas spikes are the sudden increase in the prices that affect the traders as well as normal users of the chain, and the time of finality is the time that the transaction gets finalized and immutably stored on the blockchain.
Now to tackle the gas spike issue, the upgrade provided a solution by increasing the ‘BaseFeeChangeDenominator’ from 8 to 16. The effect of this change in the base fee will help reduce the gas spikes, as the rate of increase or decrease of the base fees will be smooth, instead of the spike.
And the issue of time of finality is solved by reducing the length of the ‘sprint’ from 64 to 16 blocks. Validators produce the blocks in sequence, which is known as Sprint and the Sprint Length refers to the number of blocks produced in a single sprint. Reducing the length of the sprint reduces the need for reorganizations (reorgs) which ultimately helps in reducing the time of finality.
2. Over 2 Million BNB (worth ~$620M) Burned Yesterday!
At the initial times of Binance Coin, it is mentioned that the 100 Million BNB will be removed from circulation, which is 50% of the initial amount of BNB coins. And to carry out this process, a quarterly burn takes place which burns millions of BNBs, the amount of token to be burned is calculated using a formula which is called Auto-Burn Formula:
B = (N*100)/(P+K)
Here B is the amount of BNB to be burned which is calculated using the above formula. N stands for the number of blocks produced that particular quarter (on the BNB chain), P is the average price of the BNB during that quarter and K is the constant value.
That seems a lot of maths 😊 but this is how the amount of burning tokens is calculated. Yesterday, on the 17th of January 2023 a 22nd BNB burn took place which burned over 2 million BNB tokens worth around $620 million at the time of the burn. These burns help BNB a lot in the market as well, as this gives strong support as well as the removal of BNB from circulation means low supply and hence these quarterly burn events provide positive momentum to the BNB. Again the important thing related to the BNB burn is that it will be over once 100 million BNB tokens are burned.
You can check the burn transaction: 22nd BNB Burn (bnbchain explorer)
Hope you found this article informative and get updated about what’s going on in the crypto space, if yes then do follow me at publish0x @CryptoManthan for more content.
Thanks for reading!
