Binance BNB Burn: Boon or Scam?On July 12, Binance announced the completion of its eighth quarterly BNB burn, destroying 808,888 BNB, worth $23,838,000. However, unlike previous burns, this time, the burned BNB was not from market buyback, but directly deducted from Binance team's holdings
Binance BNB Burn: Boon or Scam?
On July 12, Binance announced the completion of its eighth quarterly BNB burn, destroying 808,888 BNB, worth $23,838,000. However, unlike previous burns, this time, the burned BNB was not from market buyback, but directly deducted from Binance team's holdings. This move has sparked widespread controversy in the crypto community, with questions and criticisms sweeping the industry.
Controversy over the "New Way" of Buyback and Burn
As the world's leading cryptocurrency exchange, Binance's platform token BNB has been known for its "buyback and burn" mechanism. Since its launch, the whitepaper clearly stated that Binance would repurchase BNB with 20% of its quarterly profits and burn it directly. This initiative garnered wide market recognition, being seen as a guarantee of BNB value.
However, Binance abandoned this commitment in the eighth burn, directly deducting from team holdings, which raised concerns. This act has been interpreted as Binance unilaterally changing the rules to avoid buyback costs and secretly cash out.
Binance's Defense: Boon or Cover-Up?
In response to the controversy, Binance CMO, Ms. He Yi, responded on Weibo, stating that although the burn method has changed, Binance still adheres to burning 20% of its BNB profits, emphasizing that the team has 100% given up their share of BNB to ensure market stability.
However, Binance's explanation is not enough to quell the doubts. Giving up on market repurchase of BNB means no longer bearing the buyback cost and unable to guarantee the actual reduction in BNB circulation. Conversely, this could intensify market risks for BNB and even harm its long-term value.
Industry Reactions: A Heated "Crypto War"
The controversy sparked by Binance's "new way" has also affected other exchanges. Huobi founder Li Lin publicly stated, "If everyone thinks Binance's new method is good, Huobi will also do the same next time." This statement has undoubtedly fanned the flames, pushing the "crypto war" in the community to a climax.
Where's the Spirit of Contract?
Binance's decision not only raised market doubts but also ignited a reflection on the spirit of contract. As a blockchain leader, Binance should uphold its promises, maintain market order, and not arbitrarily change rules for its own interests.
Value is More than Just Deflation
The value of a platform token depends on multiple factors, not just deflation, but also its fundamentals. Binance's decision will undoubtedly have a negative impact on BNB's fundamentals and could damage its market reputation.
Time Will Tell
Time will tell whether Binance's new way is a boon or a scam. Ultimately, the market will be the judge. Hopefully, Binance can learn from this experience, regain market trust, and contribute to the development of the blockchain industry.
Conclusion
The Binance BNB burn incident has triggered a rethinking of the "buyback and burn" mechanism and exposed the complexity of platform token value. While pursuing profits, can Binance also uphold the spirit of contract and maintain market order? Ultimately, this will determine its future development direction.
Keywords:
- Binance
- BNB
- Buyback and Burn
- Controversy
- Spirit of Contract
- Platform Token
- Market Value
- Blockchain
Related Information:
- Binance Website: https://www.binance.com/en
- Huobi Website: https://www.huobi.com/en
Suggestion:
- Follow Binance official announcements for the latest updates.
- Read relevant reports and analysis to understand the underlying causes and impact of the event.
- Conduct thorough research before investing and make careful decisions.
Disclaimer:
The above content is for reference only and does not constitute any investment advice. Investment involves risk, and please proceed with caution.
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