On July 18th Binance, the world’s largest cryptocurrency exchange by trading volume, announced the burn of more than 3.4 million BNB tokens worth over $60.5 million.
The BNB or “Binance Coin” is the exchange’s proprietary ERC-20 token that runs on Ethereum’s blockchain. The coin can be used on the exchange platform as base trading pairs while offering a fee discount.
The amount of BNB destroyed during the process was reportedly at 3,477,388 BNB which is the biggest burn to date. The coin burn occurs every quarter as Binance aims to reduce the total supply of BNB to less than 100 million coins.
Why burn the coin?
According to BNB’s whitepaper, Binance will initiate the destruction of BNB coin quarterly in an attempt to reduce supply while pushing the price up. The exchange plans to spend 20% of its profit to buy back BNB from the open market and subsequently burn up to 50% of those purchased coins.
Nevertheless, the recent quarterly burn did not have much positive effect on the price of BNB. The coin slightly adjusted upward but less than 5% during the past 24 hours. At the time of writing, BNB is being traded at $17.6 and still remains below a formidable overhead resistance at $19 which it struggles to break through since the mid-March major sell-offs.
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