Binance has completed its latest quarterly token burn. It was the largest in terms of dollar value.
The latest token burn from BNB
On October 17, cryptocurrency exchange Binance destroyed $ 68 million of its cryptocurrency, Binance Coin (BNB). The Malta-based exchange said its 13th token burn, which burned 2.253.888 tokens or 1,13% of the token's supply, was its largest to date in terms of value in dollars and the fourth highest based on the amount of BNB burned.
The token burn consists of the destruction of a limited amount of BNB, which is thus put out of circulation. Token burn is the opposite of minting, which refers to the creation of new coins.
The destruction of the tokens occurs periodically to limit the supply of the coin, theoretically increasing the price. In practice, Binance uses its profits to buy Binance Coin on the open market, and then destroy them.
Its purpose is to reduce the supply to the final amount of 100 million BNB tokens. There are currently 144.406.561 BNB in circulation. The price of BNB rose about 20 cents after the token burn.
Its current price is $ 30,42 (here quotation in real time), according to Binance-owned analytics site CoinMarketCap. Binance burns BNB on a scheduled basis, every quarter. Last quarter, it burned 1,74% of the token supply, or 3.477.388 tokens, which were worth $ 60,5 million at the time. The previous quarter, it burned 3,4 million tokens, or 1,69% of the token supply ($ 52,4 million).
A look at the last year of Binance Coin
Binance Coin had a good year. Its price plummeted in March following the general market trend that has suffered from the uncertainties and concerns due to the coronavirus pandemic. BNB went from around $ 25 to $ 8 in just a few days.
But BNB rallied thanks to the decentralized finance boom last summer, when investors poured billions of dollars into decentralized exchanges, lending protocols and synthetic assets.
Several Defi projects have made their way onto Binance Smart Chain, the company's blockchain. Most were imitations of more popular projects on Ethereum, which is the blockchain on which most of last summer's activity took place.
"From blocking liquidity in Burger or PancakeSwap, to paying minimal commission rates on the Binance Smart Chain, all of this has helped to increase BNB's utility value," said Changpeng Zhao, CEO of Binance, in the post announcing the last token burn. The price of BNB has been rising all summer, reaching its current price of $ 30,42.
