Binance reported in a post that for the seventh consecutive quarter they have completed a token burn of 829.888 Binance Coin (BNB) equivalent to over $15 million. The transaction can be seen here.
The token burn is a function that can be performed by anyone owning a token, by simply deleting the token from circulation. The reason is the artificial creation of currency shortage and an increase in its value due to its scarcity.
This procedure is foreseen by the Binance whitepaper, so every quarter there is a token burn of a quantity of BNB based on the trading volume of the platform. This operation is carried out until reaching the destruction of half of the supply of the Binance tokens, eventually ending up with 100 million tokens in total.
“Every quarter, we will destroy BNB based on the trading volume on our crypto-to-crypto platform until we destroy 50% of all the BNB. All transactions will be on the blockchain. We will eventually destroy 100MM BNB, leaving 100MM BNB remaining”.
In addition, the post also states that the value of the token will increase before bitcoin (BTC) returns to rise, thus also dragging the other crypto, which however will not affect the Binance token.
“Historically, bitcoin price rises first before other coins’ prices, but in this past quarter we saw a shift in the pattern. This time, the BNB price rose before BTC. A number of people have asked me, “why?”. Well, I don’t really know. Our mantra has been quite simple, to keep our heads down and focus on building. We kept building all throughout 2018, and 2019. I think that’s really it. We build products that people use and we never stop trying to improve ourselves and our products. price will eventually catch up to the value you create”.
