- Binance is committed to reducing BNB’s initial token supply by half.
- Regularly scheduled burns achieve the goal of reducing circulating supply.
- The latest token burn sees over 2 million BNB tokens removed.
Binance is committed to reducing the total supply of BNB tokens over time. The original circulation of 200 million BNB tokens has been targeted to be cut down to 100 million through periodic token burns executed on schedule. The 26th such burn occurred on January 17, removing over 2.14 million BNB tokens from circulation.
Binance BNB Tokens Removed
The 26th quarterly BNB token burn saw the removal of 2,141,487 BNB tokens from circulation by Binance. With BNB trading at around $297 at the time, this equated to $636 million worth of tokens burned. According to CoinMarketCap, the BNB supply now stands at 149,549,151 tokens, meaning Binance is halfway through its goal of removing 100 million tokens from the circulating supply.
The BNB Auto-Burn mechanism is responsible for the scheduled burns. It incorporates two procedures; the first conducts transparent quarterly burns per calendar schedule. The second, introduced via BEP-95, burns a portion of BNB spent as gas fees on-chain in real-time. Both procedures ensure the original commitment of culling the starting supply.
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Although some assume burned tokens are permanently destroyed, tokens earmarked for burning are sent to an inaccessible address, rendering them unusable. This deflationary mechanism is used to constrict circulating supply to bolster scarcity-derived value. The BNB token saw no significant immediate price movement on this round of token burning.
BNB Has Disappointing Start to 2024
The BNB token saw no major price movements as an immediate reaction to the token burn. BNB is priced at $313.50 at the time of writing, up 0.3% over the last 24 hours. In line with the rest of the crypto market, BNB saw significant growth in Q4 2023, gaining 45%.
However, this performance did not carry on into the new year, recording a year-to-date high of $334.70 on January 3, leading into a downtrend that found support around the $290 zone on four occasions between January 8 – 13. While bulls triggered a 7% upswing on January 15, the resistance zone around $320 has proven to be a stubborn level to crack.
On the Flipside
- While token burns are generally considered a positive price driver, Input Output founder Charles Hoskinson believes they are a short-term endeavor.
- Trust in the BNB burning process’s consistency and transparency instills confidence in holders and the broader crypto community.
Why This Matters
In the world of cryptocurrency, scarcity breeds value. The destruction of 2.14 million BNB tokens spotlights Binance’s efforts toward provable deflation to compound the utility value of existing tokens for users and partners within the BNB ecosystem.
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Read more about Binance’s diminishing share of the exchange market here:
Binance Dips Below 50% Market Share, OKX and ByBit Gain
Find out about Trump’s pledge to halt the digital dollar rollout here:
Trump Vows to End Central Bank Digital Currency Plans
