Binance Coin (BNB) Quarterly Burns, Effect on Price
In crypto circles, 'burning' means sending funds to an irretrievable wallet. This way the coin is effectively taken out of circulation, left to float in the digital ether.
It is a strategy used by many projects, especially with those of billions of tokens in total supply.
In Binance's case, they have been regularly burning 'BNB,' aiming to halve their total supply to 100 million BNB.
This has had a profound effect on price since BNB is the central currency priming the Binance ecosystem, which has been growing, especially after the Binance Smart Chain (BSC) launch. The blockchain is home to several DeFi protocols, all of which require BNB as a utility—just like ETH is to Ethereum.
In Q2 2021, Binance said it destroyed roughly $400 million of BNB. In Q1 2021, the exchange said it burned a record $600 million of BNB. The USD value of destroyed coins has been rising, reflecting the growing demand for BNB, the richness of its ecosystem, and the increasing scarcity of the facilitating native currency, BNB.
The more coins are destroyed, the scarcer BNB becomes, the higher the BNB price.
CryptoAltum lists BNB, which is paired against several currencies, accessible to traders.
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