Binance Confirms $32 Million BNB Coin Burn
The exchange conducts coin burn every fiscal quarter. Currently, they are ready for the fourth quarter coin burn which involves around $32.7 million BNB.
On July 16, Zhao shared a tweet about the final tally:
@binance is doing a final tally on the numbers, and will announce our 4th quarterly burn in the next day or so, and finish the burn within a couple days after that. Thank you for your patience and support! pic.twitter.com/ulWfHeUGbb
— CZ (not giving crypto away) (@cz_binance) July 16, 2018
In accordance with the exchange’s whitepaper:
Every quarter the platform utilizes 20% of its profits to purchase back BNB at the market value and “burn” them, eliminating said tokens from the final circulating supply. This procedure completes after the burning of 50% of BNB, or approx. 100 million tokens.
The announcement also mentions that Binance will burn around 2.528 million of its in-house token, which is approx. $32.7 million USD.
These figures are much greater than the exchange last quarter. The Binance Coin BNB burned was around 2.22 million and the value spent was $30 million. However, this clearly declared that Binance financials are moving uptrend.
On the growth from Q1 2018 – Q2 2018, Zhao wrote:
This is the highest number of BNBs we have burned in a quarter so far. This is a result of the strong support from our community, you, and hard work by the team, including our Angels. Thank you so much!
They completed the coin burn announcement saying they are working on obtaining the Binance Coin BNB and planning to accomplish the ‘burn’ command within the coming two days.
Coin Burn Seems a Good Option than Profit Sharing
Zhao shed light on why the exchange performs coin burns instead of profit sharing. He wrote:
I also learned a shocking amount of people still don’t understand the concept of “burn”. Simply speaking, if someone destroys 10% of a currency (burn), that achieves the exact financial effect as spreading that 10% proportionally to the other 90% holders (usually called a dividend distribution).
The executive of Binance said that a coin burn is classified by fewer transactions and therefore, they end up holding lower fees. Also, the burns are unlikely to affect the network they are designed to clog on. Dividend issuance usually requires additional work and might end up with the regulatory issues in jurisdictions due to the strict tax laws.
Binance Perceives Successful Quarter
The “Q4 Recap” article of Binance covers several insider insights on the headway of the platform from last 3 months. The exchange has made tremendous developments; including the design and build of the new program series. This growing speed will surely expand the company’s horizons. Some programs are as follows:
- Binance Research,
- Binance Info (Crypto industry),
- The Charity Foundation,
- Binance Academy,
- The fiat to crypto exchanges,
- SAFU and Binance DEX (Binance Chain)
The team has also made 200 upgrades to the exchange platform within last 90 days. Most of these upgrades were accomplished in the background, however, did not interrupt the trading activity.
What will be the response on the Binance fourth-quarter update? Share your response in the comment section below.
Image Source: Binance