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September 22, 2020
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Bitcoin

Binance burns record amount of BNB tokens |

The Binance exchange announced the twelfth quarterly burning of its native Binance Coin (BNB) tokens. This time the process was the largest in history, and reduced the amount of BNB in ​​circulation by 3.4 billion.

It was not only the largest burnout of tokens in history, in terms of supply, but also in value, which today amounts to US $ 60.5 million.

BNB combustion

A leading cryptocurrency exchange started burning tokens for the first time in the third quarter of 2017. At that time, the company was using 20% ​​of its platform’s profits to buy these tokens and burn them. Last year, in April, the company silently removed the clause from the White Paper.

The purpose of the White Paper edition was to clarify that the stock market does not actually buy back BNB, but simply burns it. Reportedly, the changes were made because the profits are usually linked to investment contracts. Now the company burns tokens based on the trading volume.

“The amount of BNB coins to be burned is based on the number of trades made on the exchange during 3 months. So after each quarter, Binance burns BNB based on the total transaction volume. “

Due to the record burn of BNB, the stock market saw a volume jump. The volume of futures contracts increased by 68% compared to the previous quarter, while the volume of spot transactions decreased slightly by 4%.

Some argue that since the exchange is burning previously issued tokens, it is a useless process.

“Burning BNB is scheduled for each quarter until 100,000,000 BNB is finally destroyed, which will be 50% of the maximum amount of BNB ever issued (200,000,000 BNB)”

– states the Binance exchange.

The short-term future of crypto will be volatile

The tenth largest cryptocurrency by market capitalization at $ 2.6 billion currently costs $ 17.16 and has increased by 23.19% this year. According to Messari, its liquid supply is just over $ 108 million.

In his official statement regarding the future cryptocurrency outlook, Binance CEO Changpeng Zhao said: “I see the short term future will be very volatile.”

“Huge amounts of wealth are taken from people and distributed to a select few groups through quantitative easing. Given the volume of printed Fiats, fiat currencies around the world will devalue against most hard assets. And for cryptocurrencies with a limited supply, your guess is as good as mine as to what will happen to their adoption and price. “

– said CZ.

Even in these unstable times, he is “more confident in the future of cryptocurrencies than ever before.”

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