According to Binance’s official announcement, the exchange was able to burn 3,373,998 BNB in its 11th quarterly burn. So far, this has been the biggest BNB burn, followed closely by its 4th burn at 2.5 million BNB coins.
Binance burns BNB tokens as a way to pay holders instead of handing out dividends. In essence, burning tokens should drive their price up eventually. Additionally, it also means that other investors might be interested in BNB since their supply gets smaller over time which means it’s a good long-term investment.
Binance has stated that BNB burning events will happen every quarter until 50% of the total BNB is destroyed. Each burning event is calculated based on the number of trades performed on Binance within the last 3-month period. Binance has been burning BNB tokens since October 2017.
More Trading Volume in Q1 For Binance
As mentioned above, Binance burns more BNB tokens if there is more trading volume on the Exchange. Despite the recent Coronavirus pandemic, Binance still managed to see higher trading volumes and user visits. According to Binance, the exchange is seeing 5x more traffic.
“While economic activity has slowed in many non-essential sectors and bitcoin price wasn’t able to escape the drop in tandem with stock prices, we have seen a sharp rise in crypto activity” – Binance
Binance notes that usually when Bitcoin price plummets, its trading volume also suffers, however, this time, Bitcoin has seen a lot more trading volume after the crash and has managed to almost recover fully in less than 1 month.
Binance New Partnerships And Updates Driving BNB Price Up
Not only did Binance burn BNB tokens but they also announced the purchase of CoinMarketCap, ‘the landing page of crypto’. Recently, Binance also announced the launch of Binance Smart Chain which intends to create a smart chain that allows projects in the Binance ecosystem to build decentralized applications compatible with Ethereum and based on EVM.
Binance also launched its Korean crypto exchange based on Binance Cloud to tap into the Korean crypto market. It is not a surprise that Binance continues being the most popular crypto exchange in the world considering its pursuits.