Major Binance Announcement Concerning Many Crypto Users
TL;DR
- The exchange plans to burn a substantial amount of Binance-pegged assets.
- Following a recent BNB token burn, the price showed a minor fluctuation.
The world’s largest cryptocurrency exchange will burn “a significant amount of Binance-pegged” assets on various chains today – January 22.
“The equivalent amount of these tokens on their native networks, which were used as collateral, will then be released,” the company said.
However, the exchange’s statement failed to name the exact tokens that will be affected by the burn.
Such burning programs, adopted by numerous crypto organizations, aim to reduce the circulating supply of a certain asset, making it scarcer and potentially more valuable in time. One of the most popular projects utilizing this strategy is Shiba Inu, whose ecosystem burns tokens quite frequently.
Some users praised Binance for its move, claiming it reflects its “commitment to token economics” and that the firm stays true to its promise about more transparency. Others, though, believe the move could trigger enhanced volatility for the affected cryptocurrencies, especially those with smaller market caps.
Last week, Binance completed the 26th quarterly burn of BNB tokens, reducing the supply by 2.14 million assets (equaling approximately $660 million at the time).
It’s worth noting that the exchange aims to reduce the total circulation supply of its native token to 100 million, which is 50% lower than its starting point. You can find more on the BNB burning program in this article.
Today the @BNBCHAIN team completed the 26th quarterly #BNB burn, reducing the supply by 2.14M $BNB
https://t.co/S6u2Q2MZ4Q
— Binance (@binance) January 17, 2024
At first, BNB’s price showed little to no volatility, continuing to trade sideways at around $310 (per CoinGecko’s data). It headed north in the following days, surpassing the $320 mark earlier today before retracing to its current level of $315.
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