Sam Bankman-Fried, CEO of FTX (SBF), posted a series of tweets in which he examined the BNB-burning mechanism – shortly before Binance’s 19th scheduled burn.
CryptoPotato earlier this week reported on the latest BNB burning, where more than $740 of the asset was destroyed. CZ, the company CEO, commented on the incident, saying that BNB is now deflationary. SBF delved into the formula for determining the annual issuance and burning rates of BNB tokens. It found that the asset’s value determines how many new coins are issued each year. In the future, the number of tokens that are annually burned will reach 7.142M. SBF took into account BNB’s value when determining the burnt rate in the next years. He said:3) This is quarterly, so it’s annually:
10b / (price + 1000)
There are approximately 170m BNB tokens. The burning ceases when there are less than 100m tokens.
— SBF (@SBF_FTX April 19, 2022
BNB’s market cap should exceed 200B if its price is higher than $1,000. SBF forecast that $10B worth BNB would be burned each year, until there are 100M tokens remaining. BNB’s current price of $1,000 per coin will cause 10M tokens to be burned each year. This is equivalent to $10B in market losses. However, SBF expects that the price will drop to around $100B within the next 7-10 Years. There are currently 170M BNB tokens in circulation. He called BNB’s tokenomics “cool” and said that the quarter’s burn rate, which removes 1.7M BNB from the supply, was in line with Binance’s formula.
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