The popular crypto exchange behemoth, Binance, has successfully concluded its quarterly burn of 1.99 million BNB coins, tantamount to roughly $477 million. This burn, part of a commitment made in 2017, is meant to taper off the token’s supply. The Binance Coin, however, witnessed a slight increase of 1% post-burn, trading around $244 over the last 24 hours.
As per the firm’s launch announcement, the aim is for the process to remove 100 million BNB, accounting for half of the total supply. As a result, BNB coins are phasing out quarterly, facilitated by the Auto-Burn formula. The calculation burns BNB based on its price and the volume of blocks created within the BNB chain. The recent burn, being the 24th in sequence, eradicated an additional 747.51 BNB from circulation under Binance’s Pioneer Burn initiative. This program replicates provable lost funds by eligible BNB Chain users.
Indications from Changpeng Zhao, the CEO of Binance, suggest more on-chain transactions to disperse the coins to more addresses. Interestingly, this announcement has caused a certain degree of skepticism among users, with many noting the resemblance between Zhao’s tweet and Sam Bankman Fried’s tweet that coincided with the downfall of FTX.
Another element of concern arises from increased pessimism within the derivatives market concerning BNB, the native coin of the besieged exchange. The ever-intensifying regulatory tumult has led to traders anticipating a price decline. Consequently, bearish traders are willing to compensate those predicting gains to withhold their positions. The open interest of BNB on perpetual swaps exceeded $400 million at the time of writing.
Moreover, the fifth-most significant cryptocurrency by market cap may encounter massive liquidations if the token price falls to around $220. Potentially exacerbating this situation, the US Securities Exchange Commission recently leveled lawsuits against both the exchange and its CEO, alleging illegal operation of an exchange, broker-dealer, and clearing agency stateside. Such a cloud of uncertainty over the future of BNB and Binance itself may further drive bearish perspective. Unsurprisingly, however, Binance continues undeterred, embracing its planned Auto-Burn and Pioneer Burn initiatives, to stick to its intended supply path.
Source: Cryptonews
