Binance announces quarterly burn of 1.8 million BNB tokens

The BNB network held its new quarterly token burn, as the Binance CEO reported. According to Changpeng “CZ” Zhao, more than 1.8 million Binance Coin (BNB) were burned on Tuesday (19).

According to data from Whale Alert, the burn took place at 08:23 (UTC time), with the tokens being sent to an address linked to Binance. The value, according to CZ, corresponds to US$ 740 million based on the current price of BNB.

In addition to announcing the burning of BNB, CZ also spoke about the currency’s deflationary character.

“About $741 million worth of BNB will be taken off the market soon. #Bnb is deflationary. If you don’t know what that means, you don’t have the basic financial knowledge to be lucky in this world. Hard, but true. Time to learn,” said the CEO.

BNB and frequent burns

BNB is the cryptocurrency that powers the ecosystem of the BNB Chain – formerly Binance Smart Chain. Its issuance took place in 2017 and the sale of the cryptocurrency was carried out through an Initial Coin Offering (ICO).

There was no control over the issuance of BNB at first, so today there are around 165 million units in circulation. However, Binance introduced the system of quarterly burns, aiming to make BNB more scarce.

An automatic burn system sends tokens to designated addresses every quarter. These addresses do not have private keys and cannot carry out transactions. That is, the BNB sent there are not destroyed, but are lost forever.

With the new burn mechanisms, the goal is to reduce the total supply of BNB to 100 million. The burn mechanism adjusts the amount of BNB to burn based on the cryptocurrency price and the number of blocks generated on the network during the quarter.

Meanwhile, data shows that another 1.8 million BNB could be burned in the third quarter, which is expected to take place sometime in August. As of this writing, BNB is trading up 3.18% to $419.