Binance, one of the most popular cryptocurrency exchanges in the world, has reminded users that its quarterly coin burn is right around the corner – but what is it, and when will exactly will it take place?
Burn Binance Burn
In case you forgot, Binance – one of the world’s most popular cryptocurrency exchanges – is slated for its quarterly buyback and burn of the company’s own soon-to-be-native token, Binance Coin (BNB).
On Thursday, the company took to Twitter to remind its followers of the seasonal event:
Not long until the quarterly #Binance BNB buyback and burn. How many $BNB do you think will be burned this quarter?
— Binance (@binance) April 11, 2018
Binance Coin (BNB) is the exchange’s own ERC 20 token which currently runs natively on the Ethereum blockchain.
Most users of the exchange are aware that the coin significantly cuts back on trading fees when said fees are paid with BNB. Currently, fees are reduced by 50 percent, but the benefit is set to decrease with each year of the exchange’s operation.
What many users do not realize, however, is that Binance buys back and burns a certain percentage of its BNB tokens every quarter.
At the time of its creation, a strict limit of 200 million BNB was created, and no future tokens will ever be generated – making the cryptocurrency deflationary in nature and rewarding those who invest in the token. As explained in the company’s white paper:
Every quarter, we will use 20% of our profits to buy back BNB and destroy them, until we buy 50% of all the BNB (100MM) back. All buy-back transactions will be announced on the blockchain. We eventually will destroy 100MM BNB, leaving 100MM BNB remaining.
Only two BNB burns have taken place so far, in October 2017 and January 2018. Both of those coin burns were announced in the middle of their respective months, with the first taking place on October 18. The second was announced on January 15.
It thus stands to reason that Binance’s third coin burn will be announced as early as Sunday, or as late as April 18, 2018.
The first coin burn removed 986,000 BNB from the total supply, while the second removed a more significant 1,821,586 BNB. It’s safe to speculate that this third coin burn will remove even more from the total supply — given the sheer volume of trades which have been taking place on the exchange every day. Currently, BNB has a total supply of 197,192,382, with 116,261,604 in circulation.
It’s also important to remember that cryptocurrency exchanges as reputable and popular as Binance are always turning a profit, regardless of whether or not we are in a bear market.
Do you use Binance, and are you a fan of Binance Coin (BNB)? What do you think about the exchange’s quarterly coin burns? Let us know in the comments below!
[Disclaimer: The author of this article is invested in Binance Coin (BNB).]
Images courtesy of Twitter/@binance, PxHere