Binance chief executive officer Changpeng “CZ” Zhao has published a guide for avoiding common fallacies in token economics and dispelling myths related to its binance coin (BNB).
In a blog post, CZ explained the prevalence of “flawed thinking” in the cryptocurrency community towards token economics and finance. He created the post in order to provide insight on the subject while also promoting the learning tools available through Binance Academy.
According to Zhao, many investors suffer from the “buckets of money” fallacy and refuse to spend their cryptoassets due to fear of missing out on gains. CZ countered by saying that investors should convert the fiat they would normally spend into crypto, thereby moving their money “between buckets.”
Binance’s chief executive also explained the exchange’s process for burning binance coin, including the destruction of $60.5 million BNB on July 17. According to Zhao, the “team portion” of BNB set aside during the ICO stage is unlocked yearly over five years and does not impact the process of burning coins.
The post reads,
More importantly, the team tokens belong to the team, and our earnings also belong to the team. BNB is a fungible token, there is no difference between one bucket to another. We could put them into the same wallet, same address, or we can keep them on separate addresses, but they all belong to our team. When we do a burn, we sacrifice the BNB we own and reduce the total supply.
CZ continued, saying the majority of Binance’s income is locked in BNB and that the exchange only converts to fiat what they need to spend. He also dispelled the myth that Binance sells their BNB and re-buys from the market ahead of coin burns in order to turn a profit.
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