Analyzing the impact of BNB Chain’s latest burn event on its stablecoin ecosystem

Binance said that it will burn a sizeable portion of Binance-pegged USDT, USDC, and BUSD tokens from the BNB Chain.

The equivalent amount of these tokens on their native networks, which were used as collateral, will then be released.In recent years, stablecoins developed into a crucial part of the digital asset industry, serving as the main channel through which fiat currency enters and leaves the market., using the ERC-20 standard, which limits their usage on other chains.

Binance offers a wrapped version of these stablecoins. This helps in transporting coins to other chains for the sake of increasing interoperability. Moreover, with a market cap of $6.63 billion, BNB Chain was the third-largest repository for stablecoins, according to data from DeFiLlama. USDT took up the majority of the supply on the chain, approximately $3.38 billion at the time of publication.However, as evident, the market cap has shrunk considerably, nearly 27%, since February.

This followed after BUSD issuer Paxos halted the issuance of the stablecoin. It led to a flurry of BUSD redemptions for other assets. The graph below sums up the reducing dominance of BUSD on BNB ChainThe news of the burn event had a positive impact on the price of exchange token, BNB, as it soaked gains of 1.24% in the 24-hour period, data from

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