Binance Undergoes Largest BNB Token Burn to Date, $165 Million
2 min readBinance, the largest cryptocurrency exchange globally, recently undertook its quarterly token burn for its native cryptocurrency, BNB.
Every quarter, Binance buys back a portion of BNB depending on the number of fees generated. It essentially redistributes those fees back to token holders and takes BNB off the market forever.
With bitcoin breaking all-time highs and ethereum just touching it’s all time high, interest in the cryptocurrency space is growing. This can be seen in the growing use of the Binance trading platform.
This growth corresponds with Binance’s biggest token burn ever. It is buying back over $165 million in BNB. With this latest token burn, the circulating supply has decreased by over 3.5 million.
Binance Pioneering Accelerated BNB Burn
The Binance team has committed to burning 100 million BNB, equaling half of the token’s total token supply. So far, Binance has burned approximately 13%, currently valued at about $426.3 million.
Noting that at this rate, the burning of all BNB tokens would take close to three decades. Binance has decided to speed things up a bit. It has not stated exactly how much faster it would burn, but its current trajectory is five to eight years. It uses a metric previously based on Binance trading volumes.
At the current BNB price, the total value of the 100 million burned tokens would equal just over $4 billion, the amount that will have been put back into the BNB ecosystem.
The reduction in supply should theoretically cause the price of BNB to continue rising.
The BNB Ecosystem
Binance designed BNB to provide value to its holders. And it does so in a variety of ways. Besides the quarterly token burns, which inject funds directly into the BNB ecosystem, BNB offers its token holders the ability to save on Binance transaction fees, generating an automatic discount on the exchange.
Depending on the amount of BNB a user holds, they receive higher savings per transaction. The amount that can end up being substantial if you are a day trader or trade frequently.
Binance has also partnered with various retailers and services, creating an avenue for BNB use in the real world. With more use-cases in the pipeline, BNB may become a more sought-after token.
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