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Andy Blignaut

More Controversy for Binance after Token Burn

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Token Burns are commonplace in the industry, but Binance’s latest destroying of tokens has proven quite controversial due to its size.

Binance have said they will do a quarterly and regularly burn until 50% of their team tokens are destroyed.The basis for how Binance works out how many tokens it burns comes from the amount of profits taken and the trading volume. But this has caused confusion for many after the Q3 burn. 

The official statistic from Binance said that the exchange had burned 2,061,888 $BNB (36,798,103 USD). This means Binance burned their second highest amount, so profits and trading volume should be high, right?

No. As the figure below shows, the Q3 trading volume was much lower than that of Q2.  Their white paper states that,“every quarter, we will destroy BNB based on the trading volume on our crypto to crypto platform”. Surely, Binance are going against their white paper?


The Block’s Larry Cermak was quick to point this out, saying:

“Binance’s spot volume dried up in the last few months. The market has been dead and yet Binance just burned the equivalent of the second-best quarter in existence.”

Not only that, but how an Binance’s profits be so large, despite the relative slow nature in the industry these past few months. “Since Binance burns 20% of profits, we can deduce that it made approximately $186 million in profit in Q3. This is the second-highest quarterly profit, “ stated Cermak.

The white paper is also shown to not be followed to the letter once again. The white paper claims they will remove 100 million BNB from the 200 million BNB they already have. 

Yet, when you add burned addresses (48,461,324) and current supply (185,474,825), the total comes out at 233,936,149 total. That’s 33 million more than Binance had said the held. Once again, Binance aren’t following their white paper, as this whole Q3 burn has shown. 

All these questions and issues. 2019 has seen a lot for Binance. 7,000 Bitcoins worth about $40 million were stolen in May and the KYC hack in August, resulted in its customer’s personal details being leaked online. Controversy and dubious acts are becoming a running theme for Binance…

Source of article: https://btchunts.com/more-controversy-for-binance-after-token-burn/

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How can Binance go ahead in carry out such a rate of Q3 burn?

This is another bad sign and those who can get off the ship should quickly do so now that they can.

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