Binance recently completed its 13th quarterly burn of BNB tokens, valued at $68 million. This is the biggest burn from the exchange to date in terms of dollar value. The destruction of tokens did not affect the price of the token.
How many tokens did it burn?
The exchange burnt 2,253,888 BNB tokens which were 1.13% of its total supply. This is the fourth-biggest burn in terms of tokens burnt and the biggest term in dollar value. The Malta-based exchange destroys BNB tokens on a quarterly basis to take them out of circulation. Theoretically, burning helps in increasing the price of the coin and preserves its sanctity as well.
The profits earned hence are used by the exchange to buy Binance Coins on the open market, then burn it. The aim of the exchange is to reduce the supply to 100 million BNB tokens. Currently, there are about 144,406,561 BNB tokens in circulation.
After the burn, the price of the token increased by about 20 cents, taking the price up to $30.42. In the last quarter, it burned about 1.74% of its token supply. At the time, there were 3,477,388 tokens worth $60.5 million. In the quarter before that, it burnt 3.4 million tokens worth $52.4 million which was 1.69% of its token supply.
A strong year for BNB token
Binance Coin had a strong year in 2020. After a crypto price crash in March and the market uncertainty because of the coronavirus pandemic, its price went from $25 to $8. However, during the decentralized finance boom of this summer, investors poured in billions of dollars into DeFi protocols, exchanges, and other synthetic assets.
Binance CEO Changpeng Zhao noted in a blog post,
“From locking liquidity into Burger or PancakeSwap to paying for the minuscule gas fees on Binance Smart Chain, all of these helped expand the utility value of BNB.”
The Binance Smart Chain also hosted several DeFi projects which imitated some popular projects on the Ethereum network, which became the hub of DeFi activity.