Last night, Bitcoinist reported that Binance, one of the most popular cryptocurrency exchanges in the world, would likely be executing its unspecified quarterly coin burn sometime today — which is exactly what happened.
Earlier today, the Binance team announced the results of its Q2 2018 coin burn in an official post on the exchange’s support page, writing:
In accordance with our whitepaper, we have now completed the burn of 2,220,314 BNB (roughly $30MM USD equivalent) for the our [sic] 3rd quarter.
Thanks for your support!
Immediately preceding and immediately after the announcement, the valuation of BNB took a hit as profit-taking traders who bought the rumors decided to sell the news. Binance’s token fell nearly 9 percent against Bitcoin today, but it’s USD losses were largely mitigated by the market leader’s bullish weekend. Binance Coin is currently down only 2 percent against the dollar over the last 24 hours.
Today marks Binance’s third ever coin burn, which is a quarterly event as defined in the company’s white paper:
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 first coin burn took place on October 18, 2017, and removed 986,000 BNB from the total supply, while the second took place on April 15 and removed a more significant 1,821,586 BNB. Bitcoinist correctly speculated that this third coin burn will remove even more from the total supply — given the sheer volume of trades which have been taking place on the exchange every day.
From an investment perspective, Binance Coins offer holders certain clearly defined benefits. The ERC 20 tokens which currently runs natively on the Ethereum blockchain significantly cut back on trading fees when said fees are paid with BNB. Currently, fees are reduced by 50 percent, but the benefit is set to decrease with each year of the exchange’s operation.
Additionally, Binance plans on launching its own decentralized exchange in the near future, which will utilize BNB tokens to a greater extent while potentially offering fiat pairings.
Images courtesy of Pixabay, Bitcoinist archives.
[Disclaimer: The author of this article is a holder of Binance Coin (BNB) and various other cryptocurrencies.]
The post Binance Burns $30 Million in BNB Tokens, Price Drops appeared first on Bitcoinist.com.