Major cryptocurrency exchange Binance has completed its Q2019 2017 burn of Binance Coin (BNB). It was the XNUMXth quarterly symbolic burn the exchange has conducted since the BNB's launch in July XNUMX.
The event, which took place over the weekend, saw a total of 2.2 million BNB worth more than $ 38 million destroyed. Although the figure represents only 1.1% of the total BNB supply, it is Binance's second and third largest burn in terms of USD and BNB, respectively. Although token burning is a common word in the cryptocurrency space, not many have a clear understanding of what it means.
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Burning tokens or coins
Token burning refers to an intentional effort used by coin makers to reduce the circulating supply of coins. This is done by destroying or permanently removing a certain amount of the coin from the total amount that will ever exist. This mechanism is used mainly for deflationary purposes.
Binance, in its whitepaper, promised to burn 20% of its quarterly earnings, until half of the initial total supply of 200 million from the BNB token has been removed. The previous It was in October, and the exchange burned $ 36.7 million worth of BNB.
The numbers imply that Binance made a profit of $ 194 million in the last quarter of 2019, as shown in the chart below, which is only $ 6 million less than what the company made in the bull run of 2017.
What's behind the profit increase?
As well as being the world's largest crypto exchange by trade volume, Binance is arguably one of the most prominent builders in the crypto space. The exchange is always looking for new ways to expand its service by establishing new associations and releasing new features and products for your customers around the world.
Changpeng Zhao, CEO of Binance, revealed that one of its products, Binance Futures, was primarily responsible for the increase in its profit margin during the last quarter. Binance Futures launched in September and allows traders to enjoy up to 125x leverage on specific trading pairs.
