2024-01-22 14:04:04
The world’s largest cryptocurrency exchange will burn “significant amounts of Binance-pegged” assets on various chains on January 22.
“The equivalent amount of these tokens on their native networks used as collateral is then released” – the company said.
However, the exchange did not name the exact tokens affected by the burning in its announcement.
Such burn programs, adopted by many crypto organizations, aim to reduce the circulating supply of a given asset, thereby making it rarer and potentially more valuable over time. One of the most popular tokens using this strategy is Shiba Inu, whose ecosystem burns tokens quite often.
Some users praised Binance for its move, saying it reflects its “commitment to the token economy” and that the company is staying true to its promise to increase transparency. However, others believe that the move could lead to increased volatility in affected cryptocurrencies, especially those with smaller market capitalizations.
Last week the Binance completed the Q26 burn of BNB tokens, reducing the supply by 2.14 million assets (equal to approximately $660 million at the time).
It is worth noting that the exchange aims to reduce the total supply of the native token to 100 million, which is 50% lower than the starting point.
Initially, the BNB price showed little volatility and remained around $310 (according to data from CoinGecko). It headed north over the next few days before crossing the $320 level earlier today before returning to the current $315 level.
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