The step the Binance team took was to reduce the circulation of the token in the industry. The recent burn is the largest the exchange had undergone, and the burn worth $165 million. The prominent exchange had previous burns, but this is a new turn for it in token removal.
Due to the token burning, the BNB token faces a decline of almost 4 million in total. Speaking more on their burning plans, the platform’s CEO explained that the exchange would make plans to accelerate the burning of the tokens. The platform plans to remove the token in a short while, addressing its new goals during its quarterly burn.
Binance to cut 50% of BNB token supply
Forging ahead in their plans, the Binance team wants to burn 50% of the BNB token supply, representing about 100 million tokens. The exchange still has a long way to go, having cut 13% of the token in its recent token burn, worth over $400 million.
Initially, the platform announced that the token burn could take up to 30 years but would try its best to hasten the process. Late last year, the firm had a meeting to discuss plans to foster fast token burning and supply cuts.
Like many other exchanges, Binance keeps recording larger trading volumes, linked to the higher number of investors interested in being part of the next crypto surge. Also, the popular platform could be one of the significant influencers for surging in digital assets. Coinbase recently hinted at the overwhelming traffic of new digital assets investors, which led to its poor user experience and technical glitches.
Asides from its technical problems, new regulations springing up are causing some issues for exchanges as the previous mode of operation could be abandoned to satisfy governmental requirements. It’s equally safe to note that the BNB token previously worth almost $50 billion in the market cap before the creators reduced its circulation, causing reduced market value.
Binance destroys 3.6 million BNB token
The firm is not slowing down as it burnt 3.6 million tokens worth $165 billion at the burn time. This recent burn doubled the worth of its previous burn, meaning that the token could see more burns in the future.
The idea behind its continuous burning is the creation of scarcity, which accelerates price with constant demand. When demand for the token increases and there is insufficient supply to follow, it creates scarcity, which skyrockets token prices.
Larry Cermak had opined that the quarter burn would be larger than the previous since Binance’s trading volumes for futures increased over the years. The platform’s CEO, Changpeng Zhao, had hinted that the burns bring the digital asset’s growth, and sources had revealed that the burns affect the exchange’s revenue.
The three-year-old startup asserts that cutting supply to BNB tokens would help the token increase in prices and speed up the burning process. The startup has had previous BNB burns in the past, and space anticipates the next burns being much larger.