Binance crypto exchange has announced that it has successfully burned nearly 2 million BNB tokens in its quarterly burn schedule. In the second quarter of 2023, Binance succeded in burning a total of 1,991,854 BNB tokens which has an approximate value of $484 million.
CEO Changpeng ‘CZ’ Zhao took to his official Twitter page to announce the development, stressing that even though the burning is done, there will still be some more large transactions to be done shortly. The purpose of the expected transaction is to distribute the coins to more addresses. he further assured its users that this is nothing to be worried about.
Binance uses the burn mechanism to reduce the amount of BNB tokens (Binance coins) in circulation. It plans to reduce its total supply to 100,000,000 (100 million) BNB. As stated in its whitepaper, the activity is carried out quarterly and it has been going on since the beginning of 2022.
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Binance uses an auto-burn mechanism that adjusts the amount of BNB tokens to be burned based on the number of blocks generated on BNB Smart Chain (BSC) during the quarter, and also on the price of BNB at the time.
The burning mechanism could be a good technique to prevent the value of BNB from falling too much in a volatile crypto market.
BNB price fluctuation
Meanwhile, BNB prices have been affected negatively in the past three months amid the news of several regulatory challenges faced by the crypto exchange, most notably the United States SEC lawsuit. The native token has lost more than 25% since all the global negative news hit the internet.
Also, the price of the BNB token has also been affected by FUDs related to the layoffs and departure of some key Executives from the company. Furthermore, if the price falls below $220, BNB might face more than $200 million in liquidation under the Venus protocol. This sum of money was sealed as a result of the BNB Bridge attack in October 2022, but it has yet to be addressed by the BNB Chain community.
According to live data from CoinMarketCap, the price of BNB today is $241. The price is down 0.29% in the last 24 hours. What’s more, BNB is ranked #5 on the global cryptocurrency market chart with a live market cap of $37.1 billion.