invezz.com
19 April 2021 09:01, UTC
Binance Coin ($BNB) completed its 15th burn last week, with nearly $600 million worth of $BNB tokens burned.
The activity is a quarterly ritual aimed at reducing the number of $BNB tokens in circulation. The tokens are not usually burned from outside holders but done within the team treasury.
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In the past, Binance usually set aside 20% of the exchange’s earning to burn. But the latest activity exceeded that percentage, although it’s not clear the actual percentage that was burned this time.
Sam Bankman-Fried, chief executive officer of crypto futures exchange FTX, estimated that Binance’s Q1 revenue could reach $1 billion.
On the other hand, its next direct competitor Coinbase has a total lifetime profit of between $780 million and $1.3 billion. Coinbase went public by listing on Nasdaq last week.
After the burn, the total supply of $BNB tokens decreased to 160 million $BNB from 170 million $BNB.
Coin burning is usually undertaken to reduce the supply of a particular token in the market, which lowers inflationary pressures. It’s a strategy to keep the demand of the token high, influencing a price increase. With a limited supply, it leads to a positive price action, which is beneficial for the token holders and the developers.
The $BNB burnt token for this quarter represents the highest when it comes to dollar value. This is only because the value of the $BNB token is worth more than its previous value in other burnt quarters.
$BNB has surged to unprecedented levels since the emergence of the DeFi space and the Binance smart chain (BSC). The token has increased in price by over 2800% within the past year. Additionally, the use case of $BNB has spread to several applications and the platform is still expanding to other projects within the crypto ecosystem.
