Crypto exchange Binance has successfully burned 1,099,888 BNB tokens that amount to $592 million at current prices.
What Happened: In the realm of cryptocurrency, a “token burn” equates to a share buyback in some senses.
Binance’s token burn program involves buying back and destroying BNB tokens every quarter, thereby reducing the overall BNB token supply. However, Binance burns tokens from their team treasury rather than outside holders.
“A burn achieves the same economic effects as an airdrop, with no need for as many tx on the blockchain, and more evenly distributed. I am always surprised that few understand this,” said Binance CEO CZ on Twitter.
I feel the amount of profit to burn will blow our mind compared to last quarter. Hard to predict the impact on the price.
— Sam (@gcuriom) April 11, 2021
The price implications of permanently removing these BNB tokens from the market are likely to have a positive impact going forward if the demand for BNB remains steady, say some market proponents.
Why It Matters: Since Binance first launched in 2017, it committed to burning 100 million BNB, or half the coin’s total supply.
Recently, the leading crypto exchange opted to speed up the rate at which it burns tokens.
“The current accelerated burn would put the trajectory to be around 5-8 years to finish the 100 million BNB,” said Binance in a blog.
With each burn, the dollar amount of BNB destroyed has increased, with the latest one being the largest burn to date.
... and those tokens are mostly the best performers of the past few weeks. BNB is outperforming BTC by like 100% since the start of April! There have actually been some liquidations there too, and also burn excitement, but it's mostly just been COIN follow-on. pic.twitter.com/X7EQlH37cc
— Sam Trabucco (@AlamedaTrabucco) April 14, 2021
So far, BNB has outperformed Bitcoin (BTC) by close to 100% for the month of April.
The token has returned 1300% year to date, and over 43,000% since the initial coin offering (ICO) in 2017.
At press time, BNB was trading at $521.28, down 4% in the past 24-hours.
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