On Tuesday (17 July 2018), Changpeng Zhao (“CZ”), the CEO of one of the world’s largest crypto exchanges (by trading volume), recapped the 4th quarter of Binance via a letter (on Linkedin) to customers and/or BNB token holders, and in the process, he revealed quite a few interesting bits of information.

Binance had its first birthday on 14 July 2018:

A few hours before CZ published his recap of Q4, Binance announced on its website that in line with the company’s policy of quarterly token burn based on that quarter’s earnings/profits, it was going to “burn 2,528,767 BNB (roughly $30MM USD equivalent)” and it was going to do it “within the next 2 days.” 

According to the Binance White Paper, Binance has the following BNB token repurchase plan:

“Every quarter, we will use 20% of our profits to buy back BNB and destroy them, until we buy 50% of all the BNB (100MM) back. All buy-back transactions will be announced on the blockchain. We eventually will destroy 100MM BNB, leaving 100MM BNB remaining.”

CZ announced the latest token burn using the following tweet:

Although the token burn was mentioned right at the beginning of the Binance CEO’s letter, this was not the most interesting fact or comment that we noticed in this letter. Here are the highlights (please note that bold emphasis is our own):

  • “The overall market (BTC) remains relatively flat, with a slight drop in price compared to last quarter, but Binance was still able to pull in decent earnings. This is the highest number of BNBs we have burned in a quarter so far.”
  • “The fact that the overall market dropped doesn’t make much sense. We have seen $14 billion USD raised from ICOs so far this year, on par with 4x the amount raised in 2017. This alone should boost price.”
  • “On top of that, we have seen many jurisdictions releasing favorable regulations towards ICOs, exchanges, and cryptocurrency.”
  • “Lastly, we have seen a huge uptick in institutional investments in the crypto space, both in number of firms and the size of their buy orders.“
  • “So, I don’t understand why the price is dropping. I guess markets always overreact, both on the high and the low side.”
  • “… a shocking amount of people still don’t understand the concept of ‘burn’. Simply speaking, if someone destroys 10% of a currency (burn), that achieves the exact financial effect as spreading that 10% proportionally to the other 90% holders (usually called a dividend distribution).”
  • “We have seen some interesting, but flawed, new concepts in the exchange space. The cleverly masked selling of coins through enticing words likes trade-mining, 100% refund on trading fees (using platform tokens), 100% dividend distribution, zero fee listing (but with other requirements), etc. At first glance, I was almost tempted to copy them (which we would shameless do if they are indeed good), but as I learned more, I understood these models are simply scams to sell their coin(s), and not great innovations.”
  • “Counter to the misconception, we don’t ask for a high listing fee. Projects propose what they are comfortable paying to us, including 0… Many projects who don’t get listed (yet) mistakenly think it’s the fee that’s the problem, while not realizing most of the time, it’s the project.”
  • “We have made about 200 upgrades to our exchange system in the last 90 days.”

Finally, as of press time, the Binance token (BNB) is the 17th largest cryptocurrency by market cap ($1,579,551,697), and BNB is trading at $13.85, up 4.68% in the past 24-hour period.

 

Featured Image Credit: Interface Image Courtesy of Binance