Binance burnt 1.68 milion BNB inorder to reduce its supply

Lens1000

VIP Contributor
Binance has burned its 18th coin, lowering the supply of its Binance Coin (BNB) by 1.68 million units.


Binance announced on Monday, January 17th, that it had burned over 1.68 million BNB, which is roughly $792 million at current market pricing.

Binance reminded users that it has committed to withdrawing half of the total quantity of BNB from circulation, or 100 million tokens out of a total supply of 200 million. The amount burned today is equal to 0.84 percent of Binance's initial supply.

The purpose of a coin burn is to limit the supply of a cryptocurrency while maintaining a reasonable price by increasing demand for the tokens already in circulation. Tokens are sent to an inactive address to perform burns.

This is the 18th quarterly coin burn since Binance began the practice in 2017.


This quarter's burn was also the first to apply a new "Auto-Burn" methodology, which bases the burn amount on market prices and the number of Binance Smart Chain blocks created.

The goal of this new model is to be more objective than the old one. The new paradigm, according to Binance CEO Changpeng Zhao, will allow "more autonomy, transparency, and predictability." After receiving feedback from the community, the new model was chosen.

Burn amounts were previously determined based on BNB usage and revenue earned by Binance's exchange, according to Binance. The 17th quarterly burn of BNB resulted in 1.34 million BNB being removed from circulation.
 

Alexandoy

VIP Contributor
I am really confused by this burning of crypto coin that it really looks mysterious to me. The coin that was burned was worth millions and I guess it was burned so that the supply will be lesser to satisfy the law of supply and demand. In clearer words when the supply is diminished then the price in the market goes higher. They burned $792 million worth. If the price in the market goes up, I don't think they can recover the amount that they burned. It really looks silly to me or maybe I am missing something in the equation.

With that burning the investors should realize that the crypto coin is just like a token of a game like Monopoly. The originator can play with the tokens and burn some tokens if they want regardless of the value. That is insane.
 

btaliat

VIP Contributor
I think the originator of coins need to be taken some cognizance measures while launching their coins. They should always make it limited in supply. This will eben save them of burning the coin in the long run. When we calculate the amount that Binance wants to burn just it make sure the BNB coin is limited and has higher value, it seems they may not even be able to recover the money.
 

Lens1000

VIP Contributor
I am really confused by this burning of crypto coin that it really looks mysterious to me. The coin that was burned was worth millions and I guess it was burned so that the supply will be lesser to satisfy the law of supply and demand. In clearer words when the supply is diminished then the price in the market goes higher. They burned $792 million worth. If the price in the market goes up, I don't think they can recover the amount that they burned. It really looks silly to me or maybe I am missing something in the equation.

With that burning the investors should realize that the crypto coin is just like a token of a game like Monopoly. The originator can play with the tokens and burn some tokens if they want regardless of the value. That is insane.
It seems this is what is going on around the digital currencies. Most especially the ones that exhibit low level of fluctuations . They must have calculated the potential gains before taking such a bold step. Burning $792 million worth if cryptocurrency isn't a joke. They must have calculated that the estimated gain after burning would be higher than $792 million. It is one of the strategy adopted to artificially influence the market price.
 

Lens1000

VIP Contributor
I think the originator of coins need to be taken some cognizance measures while launching their coins. They should always make it limited in supply. This will eben save them of burning the coin in the long run. When we calculate the amount that Binance wants to burn just it make sure the BNB coin is limited and has higher value, it seems they may not even be able to recover the money.
You have raised a very important point. There should be a proactive measure geared towards monitoring the amount of the BNB in supply. This will control the amount supplied to the market and will definitely look for ways to stop or limit further production. I have not seen such around bitcoin. Because bitcoin already have a fixed supply and it was programmed in the bitcoin network. The program is a total waste of the time.
 
Top