One of the largest cryptocurrency exchanges in the world, Binance, has recently accomplished its 25th quarterly BNB token burn, effectively decreasing the supply of Binance Coin (BNB). This latest burn removed a total of 2,139,182 BNB tokens from circulation, which is equivalent to approximately $4.53 million in value.
In July, Binance announced their 24th quarterly BNB burn, during which around 1.99 million BNB tokens, valued at approximately $484 million, were eliminated from circulation. Binance’s plan is to gradually eliminate over 100 million BNB, which makes up half of the total supply, through a series of token burns. Their ultimate goal is to retain only 100 million BNB in circulation.
Token Burning to Enhance Scarcity and Value Appreciation
“This practice, which began in October 2017, involves the elimination of a set number of BNB tokens each quarter to enhance scarcity and, in turn, create potential value appreciation.”
Despite the significant number of tokens being burned, the market response this time has been relatively subdued. BNB is currently trading around $213, experiencing a 2.74% increase over the last 24 hours.
Transparent and Auditable Token Burning Mechanism
The process of burning BNB tokens is meticulously managed through the Auto-Burn formula. This formula takes into consideration the coin’s price and the number of blocks generated on the Binance Smart Chain. It ensures an independently auditable and objective process, promoting transparency in the token burning mechanism.
The burn figures are reported on a quarterly basis, providing investors and the crypto community with clear insights into the reduction of supply. It is important to note that the burning mechanism operates independently of Binance’s centralized exchange.
Additionally, BNB Chain, which operates separately, continues to burn a portion of its gas fees in real-time using a unique mechanism. This ongoing reduction in supply, combined with its application in transaction fees, emphasizes Binance’s multifaceted approach to managing and enhancing the value of BNB.
