The activity is a quarterly ritual aimed at reducing the number of BNB tokens in circulation. The tokens are not usually burned from outside holders but done within the team treasury.
Binance setting the pace in the market
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In the past, Binance usually set aside 20% of the exchange’s earning to burn. But the latest activity exceeded that percentage, although it’s not clear the actual percentage that was burned this time.
Sam Bankman-Fried, chief executive officer of crypto futures exchange FTX, estimated that Binance’s Q1 revenue could reach $1 billion.
On the other hand, its next direct competitor Coinbase has a total lifetime profit of between $780 million and $1.3 billion. Coinbase went public by listing on Nasdaq last week.
After the burn, the total supply of BNB tokens decreased to 160 million BNB from 170 million BNB.
Coin burning is usually undertaken to reduce the supply of a particular token in the market, which lowers inflationary pressures. It’s a strategy to keep the demand of the token high, influencing a price increase. With a limited supply, it leads to a positive price action, which is beneficial for the token holders and the developers.
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The highest dollar value of burnt tokens
The BNB burnt token for this quarter represents the highest when it comes to dollar value. This is only because the value of the BNB token is worth more than its previous value in other burnt quarters.
BNB has surged to unprecedented levels since the emergence of the DeFi space and the Binance smart chain (BSC). The token has increased in price by over 2800% within the past year. Additionally, the use case of BNB has spread to several applications and the platform is still expanding to other projects within the crypto ecosystem.