Binance again destroys large amount of BNB in ​​token burn

If you have been involved in the crypto industry for a while, then you have probably heard of Binance. Binance is the largest crypto exchange in the world and also has its own crypto coin with the binance coin (BNB). To improve the scarcity of that coin, the exchange platform throws a whole bop of coins on the digital pyre every quarter.

The digital pyre for BNB

With the digital pyre we naturally mean an address to which you can only send coins, but can no longer collect them. If Binance sends coins here, it will no longer be possible to do anything with them ever again.

Coins that go to this address are gone forever, which is why we call this a ‘token burn’ within the industry. For the 22nd edition of the quarterly BNB tokens burn process, over 2 million tokens have been burnt at the stake. You can find the transaction under this link: https://explorer.bnbchain.org/tx/34167E903B9F662A64817266D8A6CE4FE096868DAD0B883E4F838331E280EEFF

At the current price of $301.64, those more than 2 million tokens are worth more than $600 million. Every quarter, tokens for about that amount go on the digital pyre at Binance. That causes the token to become scarcer and the price may rise.

So far that has been quite a success, because over the years the value of the token has increased extremely. In recent months, the token even stood at one all time high relative to bitcoin.

What is Binance’s idea?

The idea with the burn is to eventually take 100 million BNB out of circulation, which is about half of the total supply. This ultimately leaves 100 million BNB floating around. Through this mechanism, Binance effectively creates a kind of share of the exchange platform, as more tokens are burned at the stake as trading on Binance increases. The more popular the platform, the more BNB tokens will end up on the stake.

That ultimately benefits the value of the tokens, effectively benefiting people from Binance’s growing dominance. At the time of writing, there are still over 157 million BNB tokens in circulation, which means that another 57 million will have to be burned at the stake in the coming years.