Binance CEO Confirms BNB Coin Burn In The Exchange’s Fourth Quarterly Update
Changpang Zhao, the well-known CEO and founder of Binance, has just released Binance’s “Q4 Recap” article, which covers a variety of insider insights on the progress of the platform over the past 3 months.
Binance CEO Confirms $32 Million Coin Burn
On Sunday, Binance’s CEO announced that the Binance team was preparing for the coin burn that occurs for every one of Binance’s fiscal quarters.
@binance is doing a final tally on the numbers, and will announce our 4th quarterly burn in the next day or so, and finish the burn within a couple days after that. Thank you for your patience and support! pic.twitter.com/ulWfHeUGbb— CZ (not giving crypto away) (@cz_binance) July 16, 2018
According to the exchange’s whitepaper, every quarter, Binance will use 20% of its profits to buy back Binance Coin at market value and ‘burn’ them, removing said tokens from the overall circulating supply. This process will continue until 50% of all BNB are burned, or approximately 100 million tokens.
But with this most recent announcement in the aforementioned Q4 recap article, Zhao has confirmed the burn, giving more details about the amount of BNB burned and the funds used. The announcement states that Binance will be burning 2.528 million of its in-house token, which is currently valued at approximately $32.7 million USD.
These figures are up from the 2.22 million BNB burned and the $30 million spent on said Binance Coin last quarter, which indicates that Binance’s financials are on the uptrend.
Commenting on the increase from Q1 2018 to Q2 2018, Zhao wrote:
This is the highest number of BNBs we have burned in a quarter so far. This is a result of the strong support from our community, you, and hard work by the team, including our Angels. Thank you so much!
Binance closed off the coin burn announcement stating is currently working on acquiring the BNB and plans to execute the ‘burn’ command within the next two days.
So Why A Coin Burn Instead Of Profit Sharing Or Dividends?
Zhao, or CZ as crypto community members like to call him, clarified why Binance does coin burns instead of profit sharing/dividends, like with an exchange like KuCoin or Coss.io. Zhao wrote:
I also learned a shocking amount of people still don’t understand the concept of “burn”. Simply speaking, if someone destroys 10% of a currency (burn), that achieves the exact financial effect as spreading that 10% proportionally to the other 90% holders (usually called a dividend distribution).
CZ also added that a coin burn requires fewer transactions, and therefore, a lower fee and a close to zero chance that the burn transaction(s) will clog the network a token is built upon. Additionally, Binance’s CEO pointed out that not only does a dividend distribution require more work, it also may be an issue for regulators in “some jurisdictions,” as he cited legal and tax worries.
Binance Sees Successful Quarter
Over the course of the past three months, Binance has made serious developments to better the platform, including creating and developing a series of new programs and systems that will see the company expand its horizons.
Some of these programs include Binance Charity Foundation, Binance Info (Information on the crypto industry), Binance Research, Binance Academy, Binance fiat-crypto exchanges, SAFU and Binance’s decentralized exchange, fittingly named Binance Chain.
However, despite working hard on other projects, Binance has not ceased its work on improving the main Binance exchange. The update pointed out that there have been 200 upgrades to Binance’s exchange system in the last 90 days, with most of these upgrades happening in the background, and did not interupt trading.
CZ closed off the update seeming to hold high hopes for the future of Binance and the cryptocurrency industry, writing:
There are many exciting things brewing for the next quarter and beyond. I am tempted to make more pre-announcements of announcements, but will hold off until things are done. As always, I thank you for your unwavering support in Binance, and look forward to building a higher freedom economy together.