Binance, the world’s largest cryptocurrency exchange by volume, had completed its scheduled 5th token burn. So far, the price has reacted negatively despite the reduction in BNB supply.
According to an official release dated October 17, Binance had stated that they have successfully completed their 5th quarter token burn, as per its whitepaper. Precisely 1,643,986 BNB were destroyed and all of that is estimated to have been equal to $17 million.
BambouClub, a Twitter user and cryptocurrency trader and analyst, had noticed that BNB trading volume “have been flat or falling.” He also noted that the platform’s fees per trade have augmented by 50% due to the dropping of BNB’s discount from 50% to 25% in mid-July of this year. 24 hours prior to the coin burn, BambouClub tweeted data on previous burns.
Over the last 24 hours, BNB $9.90002 has lost around 2% of its value according to CoinMarketCap. The current price of BNB mirrors that of April’s coin burn when it dropped roughly the same amount.
It’s important to emphasize that in accordance to the whitepaper, 100 million BNB tokens will be destroyed and will leave 100 million in circulation.
“Every quarter, we will use 20% of our profits to buy back BNB and destroy them, until we buy 50% of all the BNB (100MM) back. All buy-back transactions will be announced on the blockchain. We eventually will destroy 100MM BNB, leaving 100MM BNB remaining.”
The fifth and most recent coin burn destroyed a notably smaller amount of coins compared to the previous three.
The reason behind Binance buying back their coins and destroying them is to increase the value of the remaining coins in the long term.