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Binance conducts 12th quarterly Coin Burn

21 Jul 2020,

The Binance exchange recently burned 3,477,388 Binance Coins (BNB), equivalent to US$60.5 million.

Binance is currently listed as the largest exchange market on the Brave New Coin exchange tracking page, with a daily recorded trading volume of just over US$1.4 Billion across 737 recorded markets.

The original Binance whitepaper describes the platform as a digital asset exchange that focuses primarily on crypto-to-crypto trading. The document states that the exchange is designed to improve on factors like technical architecture, customer service, liquidity, internationalization, and language support, all of which were lacking in the crypto-to-crypto exchange space.

Binance Coin (BNB) provides access to various features on the Malta-based Binance exchange. The asset was initially an ERC-20 token before a migration to the Binance Chain (BEP2) in late April 2019.

BNB is currently listed as the 11th largest asset on the Brave New Coin market cap table with a capitalization of ~US$2.3 billion. It currently trades for ~US$18.26, having risen by ~14% in the last month.

A feature of BNB token management is burning events that take place every quarter. Token burning is an intentional action taken by the controllers of a digital crypto token to permanently remove assets from circulation.

The Binance coin burns are paid for with 20% of the total exchange profits from the quarter. The most recent burn represents trading activity across Binance spot, margin, and futures exchanges, as well as the various portfolio projects and ecosystem partners that use BNB, from April to June 2020.

In a blog post announcing the burn, The Binance team noted that the 12th quarterly burn is the biggest ever, in terms of BNB and fiat volume. It also coincides with the three year anniversary of the Binance exchange.

The team highlighted some of the business activity from the second quarter of 2020 that contributed to the burn. The Binance futures platform increased its perpetual contract lineup from 24 to 32. Quarterly futures contracts were introduced on June 11th, and launched with a BTCUSD contract with up to 125x leverage.

Also in the second quarter of 2020, Binance launched an Options platform and leveraged tokens. Options are financial instruments that are derivatives based on the value of an underlying asset. An options contract offers the buyer the opportunity to buy or sell the underlying asset, depending on the type of contract. Leveraged tokens are tradeable tokens that can give traders leveraged exposure to cryptocurrency markets without the trader having to manage a leveraged contract position. For example, the BTCDOWN token offered by Binance rises by between 1.5%-3% every time the price of BTC falls by 1%.

Towards the end of the quarter, Binance acquired Swipe, a crypto debit card platform that they jointly collaborated with to launch Binance Card. The Binance card works like a traditional debit card and enables users in the UK and Europe to convert and spend Bitcoin (BTC), Binance Coin (BNB), Swipe (SXP), and Binance USD (BUSD) and fiat at over 60 million merchants across 200 regions and territories worldwide. Binance notes that it has worked extensively on enhancing its fiat-to-crypto channels. The Binance spot exchange now features 30 fiat-to-crypto direct trading pairs while Binance P2P supports 31 local currencies.

Binance also expanded into new markets and new areas through investments. The company invested in a regulated cryptocurrency exchange in Indonesia, Tokocrypto, in May. The investment was meant to accelerate the growth of Tokocrypto’s business, in directions including new products and services, technology enhancements, nationwide expansion, and new initiatives for blockchain education in the region.

Discussing the deal, the Founder and CEO of Binance Changpeng Zhao stated that "with fast technology adoption, strong economic growth, and the world’s fourth-largest population, Indonesia will become one of the leading centers of the blockchain ecosystem in Southeast Asia. Our investment in Tokocrypto will allow us to explore exciting new opportunities together for the Indonesian market with a regulated local partner to further enable the freedom of money.”

Also in May, Travala.com Merged with Binance-backed TravelByBit. The merger was a strategic decision between Travala.com a blockchain-based accommodation booking platform and TravelByBit cryptocurrency-friendly flight booking portal backed by Binance. Discussing the deal, Juan Otero, Travala.com CEO, said, “We couldn’t be more excited to join forces with TravelbyBit, which is backed by Binance and have constantly been achieving and pushing crypto adoption by providing blockchain-based online travel booking services. We share similar values with Binance and TravelbyBit and are fully aligned on our vision for the future of massive cryptocurrency adoption.”


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