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The world's largest cryptocurrency trading platform, Binance, has revealed plans for a significant token burn that is set to take place on Monday, January 22. The burn would happen for different chains that are Binance-pegged. The action is not surprising because the cryptocurrency exchange has already carried out token burns, primarily involving idle tokens that were wrapped with Binance.
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Regarding Binance's latest burn campaign
Binance said that their team "will burn a significant amount of Binance-pegged tokens on various chains" in a recent post on X. Furthermore, they mentioned that the procedure will entail the release of a commensurate quantity of these tokens, which previously functioned as collateral, on each of their own local networks. It is unknown, though, exactly how much will burn or which cryptocurrencies would be impacted.
Token burns of this kind have become standard procedure for cryptocurrency platforms and developers. These burns are typically used to control the supply of tokens. However, Binance's primary goal is to increase token economics by burning dormant tokens.
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Token burn inside September 2023
On September 14, Binance made public on its official X account its intention to start a significant burn of pegged currency. Four of the five tokens that were listed as potential candidates for destruction were Binance USD (BUSD) tokens on various blockchains. As part of this endeavor, the exchange burned the pegged tokens on the local blockchains and then released the same amount of tokens that had been collateral.
Furthermore, the most recent burn today will be conducted using a similar procedure. The September burn featured the following tokens: BUSD on the MATIC, BNB, BPSC, and TRX chains, and TUSDOLD on the BSC chain. Shortly after the cryptocurrency exchange declared that it would stop supporting BUSD in 2024 due to legal challenges from the U.S. Securities and Exchange Commission (SEC), the token burn was started.