- Binance successfully carries out its 25th quarterly token burn, destroying 2.14 million BNB tokens valued at $453 million.
- Following the token burn, BNB’s market price saw a 3% surge within 24 hours.
A Closer Look at the BNB Burn Phenomenon
Binance, the world’s predominant cryptocurrency exchange, recently celebrated its 25th quarterly BNB token burn. The event was championed by Binance’s CEO, Changpeng “CZ” Zhao, who proudly shared the accomplishment with the crypto sphere. As of October 16, a considerable 2.14 million BNB tokens, equivalent to a staggering $453 million, were removed from circulation, as corroborated by the BNB burn portal. This significant burn sparked immediate reactions from traders, with the BNB token value escalating by 3% within a day.
Decoding the Binance Token Burn Strategy
Binance’s dedication to reducing its token’s circulating supply is evident from its systematic quarterly burns. The 25th iteration saw 2.139 million BNB tokens taken out via the BNB Auto-Burn process. Notably, this count also incorporated 314.69 BNB tokens destroyed through the Pioneer Burn Program.
A broader perspective reveals Binance‘s ambitious objective: to limit BNB’s circulating supply to under 100 million. As of now, the active circulating supply is poised at 151,705,885 BNB. Their long-term strategy? The BNB Auto-Burn procedure, which has thus far incinerated a total of 50.29 million BNB tokens.
To newcomers, the term “burn” might sound ambiguous. In the crypto domain, token “burning” refers to the intentional removal of tokens from circulation, which can often lead to an appreciation in the token’s value due to decreased supply. Binance employs a meticulous Auto-Burn protocol, which calculates the quantity of BNB to be destroyed based on the token’s price and the blocks produced on the BNB Smart Chain (BSC) over the quarter.
Intriguingly, projections from the BNB burn portal hint at the next burn’s magnitude: an estimated 2,180,464 BNB. Current indicators, however, suggest this figure might escalate by the 26th quarterly burn. For context, the 24th burn in July eliminated 1.99 million BNB tokens, then worth $619 million.
BNB’s Market Response
Following the burn, BNB’s price trajectory shifted upward by 3%, hovering around $213. This uptick wasn’t solely due to the burn event; the broader crypto market’s positivity also played a role. Bolstered by these recurrent burns, CZ conveyed that BNB has now transitioned into a deflationary token. This strategic burning process inevitably reinforces BNB’s scarcity, making each token more valuable in the eyes of potential investors and traders.