Changpeng Zhao, Binance Founder, and CEO takes advantage of the BNB burn to assess the history of the exchange.
Changpeng Zhao opens his post on Binance’s blog celebrating the achievement that they reached with the twelfth BNB burn in history. This is the largest burn of the cryptocurrency since its launch, withdrawing the equivalent of USD 60,500,000 from circulation. In the previous burn, there was only a withdrawal of USD 52,466,000.
Some blockchains burn cryptocurrencies aiming to limit the supply of the virtual coins in circulation. In this way, they seek to guarantee the value of the crypto asset to users. Besides, it helps them to prevent excess in money issuance from depreciating it and causing inflation.
Cryptocurrencies that do not have an automatic mechanism would use this method to limit the supply of money, such as happens with currencies like Bitcoin through halvings. For this reason, burning becomes the only alternative to avoid an inflationary phenomenon. The sheer size of the BNB burn is an indicator of the increasing growth in the use of Binance’s cryptocurrency.
Changpeng Zhao Talks about Binance
Changpeng Zhao’s assessment of the current status of Binance is the most interesting thing about his post. He lists the many achievements that the exchange has reached since its birth. Among them, he includes futures contracts, the fiat money market, the stablecoin BUSD, the purchase of CoinMarketCap, and Swipe, as well as the partnerships with BitTorrent, Brave Browser and BitPay.
In this way, he briefly tells the history of Binance, trying to show that the company has maintained the culture and the attempt to decentralize as much as possible, since its foundation with an Initial Coin Offering (ICO) in 2017.
The exchange faced great challenges such as its transition to remote work after China banned cryptocurrency exchanges in September of that year. Binance had to use 40% of its funds (USD 6 million at the time) just to protect its users from losses.
Although that move was risky from a financial point of view, it did gain Binance a strong reputational boost, with thousands of users migrating to the exchange. Thanks to this, during the peak in the price of Bitcoin in December 2017, Binance was already the first exchange in the world by trading volume.
Even the crypto winter after the 2017 rally did not stop Binance’s work of building a solid financial infrastructure. The exchange and its team took advantage of this period to travel around the world promoting cryptocurrencies. They lobbied for the adoption of modern regulations for the cryptocurrency market during the 2018 financial uncertainty.
This effort had its counterpart at the technical level, where the performance of the exchange continued to improve. This could not prevent the 2019 attack, in which users lost USD 42 million, which the Binance fund had to cover.
However, this setback could not prevent the company from continuing to develop, as Changpeng Zhao comments. It launched a series of new products in 2019, with the Binance Chain at the center, and has prepared a blitz of innovations so far in 2020.
Today, decentralization and the motto “put users first and do the right thing” have led Binance to become the world’s leading cryptocurrency company. Changpeng Zhao runs an ecosystem of unparalleled products and services that will only continue to grow in the coming years, according to what he wrote in his post.
By Alexander Salazar