Changpeng Zhao, the founder of the Binance cryptocurrency exchange, believes the impact of its policy to “burn” its associated cryptocurrency is not fully understood by the market.
Each quarter the trading venue destroys an amount of Binance Coin (BNB) and publicly declares the new circulating supply. The coin burns will continue until there remains just 100,000,000 BNB. This will represent half of the total Binance Coin that ever existed.
What Does Burning a Coin Mean, Especially for BNB?
Despite information about the Binance Coin burns being publicly available, Changpeng Zhao, founder and CEO of the exchange, believes the market is yet to fully grasp its implications. In response to a follower asking about whether the burns were priced in, Zhao wrote that he did not think most people even knew that the exchange periodically burned BNB.
The above question about the burn policy came in response to Zhao posting evidence of what has been described as an aggressive business policy and “blitzscaling” by some commentators. In a report describing the exchange’s native cryptocurrency asset and Binance’s strategy of rapid expansion into every corner of the cryptocurrency industry, Multicoin Capital used the term, originally coined by Reid Hoffman to describe businesses like Amazon.
Binance Aims to Own Asia
The latest evidence of such efforts to become completely synonymous with all things cryptocurrency sees the firm making moves into both the Korean and Japanese cryptocurrency markets. As reported by Business Korea, the exchange has just invested in a business issuing called BXB. The publication cites Binance stating “We are drawing up a long-term plan to lead the Korean cryptocurrency market.”
Similarly, the exchange announced via its blog that it was in talks with licensed Japanese cryptocurrency exchange TaoTao and Z Corporation, which was established by Yahoo Japan in 2018. The post says that the firms are preparing to launch trading services for users in Japan.
Is Burning the Same as Halving?
Other local Binance departments, such as the US-facing exchange, introduced similar reward schemes as those offered original, global trading venue. By allowing traders discounts on fees for holding BNB and expanding into new markets, the trading venue is likely ensuring new demand.
This, coupled with the shrinking BNB supply, which Zhao is sure is not priced in, could mean that the cryptocurrency has a lot more room to grow in the future.
Binance Coin Burn
BNB, or Binance Coin, is a cryptocurrency created by Binance. Binance Coin (BNB) powers the Binance Ecosystem. As the native coin of Binance Chain, BNB has multiple use cases: fueling transactions on the Chain, paying for transaction fees on Binance Exchange, making in-store payments, and many more.
Binance burn, which took place, represents activity across the Binance spot, margin, and futures exchanges. Binance uses 20 % of the quarterly profits to buy BNB and permanently burn it. The Binance coin also referred to as BNB is the cryptocurrency token, which has issued on the Binance platform.