Binance CEO Responds to Concerns Around BNB Supply and New Token Burn Process


Binance concluded its token burning process on Friday, 12th July 2019, as it destroyed over 808,888 BNB tokens. The value of the tokens burned is $25.2 million at press time. It represents the 20% quarterly profit of the Exchange.

The design of the Binance [BNB] coin is such that Binance will burn about 100 million coins from the initial 200 million. The Binance Team allocated itself 40% of the supply, i.e. 80 million coins. Including the last token burn, Binance has completed the burn of 12.5 million tokens.

bnb coin
Binance [BNB] Coin Burn Transaction Details (Source

Larry Cermak, the director of Research at The Block, noted that while reducing the supply implies a price jump, the case is different with Binance. Binance will now burn from the initial 80 million tokens allocated to its team, to complete the burning process.

Also Read: CZ Focusing On BUIDL, Binance Completes Its 6th Edition of BNB Coin Burn

Note: there are about 187.5 million tokens in the supply currently. However, overall it is a zero-sum game. This is because the team will burn an equivalent amount of token that it is actually earning from the trading fees. So essentially the burnt tokens are just replaced by the earned tokens.

Moreover, as Cermak noted, Binance will now burn the tokens based on trading volume and on the profits. He tweeted,

Binance removed any mentions of burning 20% of profit from its whitepaper and from its website. In yesterdays announcement, it said “we’ll still burn BNB based on trading volume” – not based on profit.

Furthermore, according to him, the change has been brought to address regulatory compliances primarily in the US. However, the CEO Binance, Changpeng Zhao feels differently, according to him the regulatory assumption is “wrong”. He said,

The main reason is there is no longer a need to worry about the team unlock and dump. Not possible now.

Cermak also pointed at the classification of Binance as a security or a cryptocurrency. While CZ and the Binance team have always reaffirmed BNB as a legitimate cryptocurrency. Its nature of being associated with an Exchange also points to it being ‘financial security.’

Also Read: Margin: Binance Signs Up 10k New Customers, CZ Praises Retail Traders

Moreover, the Securities Exchange Commission (SEC) in the US has often tried to lay guidelines to separate the security tokens from utility tokens. Moreover, Binance has had to change its strategy in the US considerably and has opened a separate Exchange there. Hence, it evidently raised suspicion around the price of Binance [BNB] Coin and its future.

However, Changpeng Zhao noted in the retweet that the points raised above only add fuel to FUD and have no basis. He said,

Pretty good thread with numbers, up until 6. The hypothesis that it is regulatory related is all wrong. 7 [securitization doubts] onwards is FUD.

The details of the change in the burning process are compiled in the blog post – here. Hence, while the new age tokenized world continues to baffle the people, the team’s conviction has been unshaken. The price of BNB at 13: 15 hours UTC is $31.17.

Do you think that Binance [BNB] Coin is clear as a cryptocurrency under all regulatory rules? Please share your analysis with us. 

Summary

Binance CEO Responds to Concerns Around BNB Supply and New Token Burning Process

Article Name

Binance CEO Responds to Concerns Around BNB Supply and New Token Burning Process

Description

Binance concluded its token burning process on Friday, 12th July 2019, as it destroyed over 808,888 BNB tokens. The value of the tokens burned is $25.2 million at press time. It represents the 20% quarterly profit of the Exchange.  

Author

Nivesh Rustgi

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CoinGape

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Disclaimer
The presented content may include the personal opinion of
the author and is subject to market condition.
Do your market research before investing in cryptocurrencies.
The author or the publication does not hold any responsibility
for your personal financial loss.



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