Binance Coin (BNB) Rises Fast Again After Token Burn

Binance Coin (BNB) Rises Fast Again After Token Burn

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Binance’s native token is growing three times faster than the leading cryptocurrencies bitcoin and Ethereum. 1,335,888 BNB (roughly $639,462,868 equivalent) is burned.

Regular burning of tokens, once a quarter, is carried out as part of the anti-inflationary Binance Coin program. This process will last until 100 million BNB remains in circulation, that is, half of the total emission. Each burn causes the BNB price to skyrocket. But this time the price rose especially strongly just before the burning. In fact, it turned out that BNB became the market driver. The growth started on October 12th with a price of $394, and to date, Binance Coin is up more than 25%. Moreover, after the token burn, the price added only 4%, the main growth occurred on the expectations of burning.

The last BNB burn occurred on July 18, tokens worth $393 million were burned. Then the cryptocurrency grew by more than 90%, from a price of $269 to $515 on August 26. But the maximum growth this year came on the expectations of April burning. This was the fifteenth burn in a row. BNB then soared above $607. After more than a million BNB was burned, its price dropped by almost a quarter. But then the bull run continued, and a new all-time high of $690.93 was set on May 10.

In order to burn, the Binance exchange is buying back BNB for 20% of its quarterly profit. Thus, the amount of the tokens burned can be an indicator of the exchange profitability. The seventeenth burn is not a record as for amount, so it is hard to expect a record BNB rise. However, BNB hodlers earned more this time than bitcoin or Ethereum holders in the same period. Both leading cryptocurrencies have gained respectively 8.7% and 8.9% since October 12.

Binance CEO Changpeng Zhao (CZ) does not hide his intention to bring his cryptocurrency to the first place in terms of capitalization, or at least to compete on equal footing with Ethereum. Binance Coin is the youngest of the top three cryptocurrencies, it was launched in 2017. Ethereum was released in 2015, bitcoin will soon celebrate 13 years. BNB is a native token for two blockchains, Binance Chain and Binance Smart Chain (BSC). The BSC uses the Proof of Staked Authority (PoSA) progressive energy-efficient consensus, a combination of Proof of Stake and Proof of Authority. Smart contracts can be launched here and it is used for decentralized applications, including for DeFi (decentralized finance).

BSC is a direct competitor to Ethereum, which is only trying to shift to Proof-of-Stake. Ethereum blockchain from time to time is overloaded, and CZ invites developers to migrate to BSC. Most recently, Binance launched a billion-dollar fund to support liquidity, developers, and “young talent”.