Earlier this week, Binance announced through a blog post that it had burned nearly 1.1 million BNB tokens, which was worth $600 million at the time, in its latest quarterly burn. The total supply of BNB decreased from 170 million BNB to 169 million BNB.
What is Coin Burning?
Coin burning is a process in which tokens are removed from circulation, which would reduce the total circulating supply of said coin — leading to lower inflationary pressures. A limited supply often leads to positive price action, which is beneficial to both Binance and BNB holders.
According to Binance’s infographic, the 1.1 million BNB tokens burned represent a mere 0.65% of total supply — a sizable drop from 1.81% last quarter. While the sheer volume of tokens burned pales in comparison to previous quarters, Binance’s 15th burn is certainly the highest in dollar value. This is simply due to each BNB token being worth significantly more than previous quarters.
With the emergence of the Binance smart chain (BSC) and the DeFi space at large, BNB has soared more than 2800% in the past year. “BNB’s use cases have expanded to hundreds of applications on numerous platforms and projects within the crypto ecosystem,” said Binance’s CEO CZ.
“It’s used to pay transaction fees on Binance.com, Binance DEX, Binance Chain, and BSC… With the growth of BSC, more people are using BNB, and the more utility it has, the more value it gains,” he added.
In the past quarter alone, the coin went up 16.8x. Its meteoric rise from $15 to $430 in a year led to BNB’s market capitalization surpassing $90 billion at its peak — making it the third largest cryptocurrency behind Bitcoin and Ethereum. Despite the recent rout that sent BNB plummeting 30%, it still holds the position as one of the market leaders.
Featured image from UnSplash
