Larry Cermak found out that Binance changed its BNB burn policy on the whitepaper.
TIL almost no one knows Binance changed their whitepaper last summer and no longer burns BNB based on profit. All analysis floating around (by Arca and Messari) is not accurate and yet CZ is happily retweeting and engaging with it. They now burn BNB based on traded volume
— Larry Cermak (@lawmaster) January 21, 2020
Until recently, in fact, the old policy was still in force, according to which each quarter the company would use 20% of its profits to buy BNB tokens on the market and then burn them until only half of those initially created remained in circulation.
However, in the updated whitepaper, on page 9, there is now a different policy, which generally states that the amount of BNB tokens burned each quarter is no longer a percentage of profits, but a number related to the trading volumes on the exchange.
For accuracy it now says:
“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 eventually will destroy 100MM BNB, leaving 100MM BNB remaining”.
As Cermak himself reveals, the CEO of Binance Changpeng CZ Zhao said that the company has decided to remove the reference to the word “profits” because in some countries profits tend to be associated with securities and the company does not want to run the risk that BNB is considered as such.
CZ told me back then: “We also removed the profit language because some regions tend to associate profits with securities, and we would like to distance BNB from that. So going forward, we plan to describe the burn this way, and burn what we burn."
— Larry Cermak (@lawmaster) January 21, 2020
However, regardless of whether the decision was made for this very reason, and therefore whether it is a good decision or not, the fact that the whitepaper was changed many months after the token was released has caused many people to turn up their noses.
It is worth remembering that BNB was issued with an ICO, so investors who chose to invest did so based on the original whitepaper, and certainly did not expect it to be modified over time.
At the same time, however, the last burn, which was announced only a few days ago, destroyed 2,216,888 BNB, worth 28.8 million dollars, making it the third-largest burn ever in BNB, and the second-largest in dollars.
The doubt raised by some is that under the new policy the amount of BNB to burn each quarter will, in fact, be at the company’s discretion, whereas before it was precisely 20% of profits calculated in US dollars.
This is why the change in the whitepaper is creating uncertainty among many people.
Meanwhile, Binance has also announced a new feature, the Peer-to-Peer (P2P) Merchant Program, which allows merchants to earn money by providing fiat currency payment solutions with zero commissions.
On this subject, CZ said:
“When we first launched our P2P trading services last October, we carefully selected merchants to protect users’ interest. In the past quarter, there has been increasing growth in trading volumes on Binance P2P platform, and we have constantly received requests for more fiat-to-crypto access from our global community. To meet the growing users demand, we are seeking credible merchants for Binance P2P trading platform globally. We welcome quality payment services providers to join Binance’s Global P2P Merchant Program”.
