Binance, in addition to launching its own mainnet to which it migrates Binance Coin (BNB), has also changed its whitepaper. Allegedly to avoid price manipulation related to regular quarterly BNB (coinburn) burning.
According to the original wording, Binance used 20% of its earnings in dollars every quarter to buy BNB tokens for that amount and then destroy them. It happened at the beginning of this week, when Binance announced that it had burned 829,800 BNBs, which was $ 15.6 million at the time. Binance committed itself to this process until it burned 50% of all BNBs in circulation, a total of 100 million BNBs.
The point of this idea is that the less BNB in circulation, the greater the scarcity of these tokens.
However, in the new white paper, Binance has changed the "Repurchasing plan" to "The Burn" and the information about how many percent of the exchange's profits will be used every quarter to refine the number of BNBs to be burned has disappeared. However, it remains to be noted that the burning of coins will continue every quarter until exactly 50% of all BNBs disappear from circulation.
Exchange Chief Executive Changpeng Zhao explained to The Block Crypto: "We recently updated our whitepaper to better describe how we actually do coinburn. For example, we have canceled the buyback link because we are not actually buying BNB and simply reducing its supply by burning BNBs. We also removed the wording that refers to our profits because in some regions there is a tendency to combine profits with securities and we want to distance ourselves from that. So we continue next, we decided to describe the coinburn in this way and we will burn as much as we will… ”
What does it mean?
By changing the formulation, Binance leaves more freedom as to the coinburn conditions. He is no longer committed to the exact number of BNBs he burns (from profits) every quarter, he only promises that one day the BNB will circulate half less than at the start. At the same time, this step limits the possibility of price manipulation, as before the previous fires there was a tendency for speculators to buy BNBs and then sell them. The nearest coinburn will take place around July 15th and it will probably tell more.
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