Today, news outlets burst up with a striking update – Binance Coin (BNB) lost its market capitalization of $1.5 billion in just one day. This information was revealed by a well-known crypto data provider CoinMarketCap. As a result, Binance Coin slid down two positions in the ranking. Currently, having lost more than 8% of its value over the last 24 hours, it is trading at a price of $26.13 with a market cap $2 853 125 349.
The reason behind this startling change lies in the decision of Binance to burn 808,888 of its coins for a total worth of $23.838 million. This is a part of Binance long-term schema to cut from circulation all of the coins allocated to employees, accounting for 40% of the total emission. Having noticed that, CoinMarketCap was quick to respond, consequently re-evaluating BNB market capitalization and reducing it by $1.5 billion. Now, Binance finds itself on #8 spot.
This, however, should not come as a surprise – the coin reduction was officially announced by CEO of Binance, Changpeng Zhao, earlier this month. As a part of its plan, Binance intends to destroy BNB each quarter until it comes down to the number of 100 million tokens in total circulation. But, as Mr. Zhao emphasized, the only coins to be affected are the ones for internal use.
Soon after Coinmarketcap declared the downfall of BNB, Mr. Zhao reacted on Twitter with a sarcastic comment:
CMC just gave an 80M BNB haircut. They way CMC calculate Circulating Supply works only for mining coins, it does not work for projects with burn, unlocked team allocations, etc.
— CZ Binance (@cz_binance) July 16, 2019
Binance – What You Should Know
Two years ago, Binance brought up the idea of launching its own token. Binance Coin (BNB), as it is known today, came to life after an ICO in July 2017. With the established circulation of 200 million BNB, Binance now took a decision to cut off 100 million of its tokens. This decision came after the company’s resolution to reduce crypto allocation to their co-workers.
Binance is aiming to serve a variety of purposes. The most noteworthy use cases of BNB are:
- Covering trading fees on the exchange;
- Using as a supported currency with Crypto.com wallet (mobile app and Visa Card available);
- Buying virtual gifts on Uplive platform;
- Employing as a collateral for instant crypto loans on Nexo platform.
Among the most recent developments, Binance switched all transactions in BNB to its native centralized network, Binance Chain. As Coinspeaker has reported earlier, this so-called process of changing blockchain network, Mainnet swap, occurred on April 23, 2019. However, Binance is not going to stop on that – in the future, it has even a more ambitious plan of building a decentralized exchange with Binance Coin as an underlying currency.