BNB, Binance Chain’s native asset, has registered a new all-time high (ATH) of about $712 to prove its place as a top-five cryptocurrency. Many tokens deployed on its chain also saw a massive spike in activity, with Floki and PancakeSwap’s CAKE gaining 15% and 25%, respectively.
The BNB ecosystem has since witnessed a rise in TVL by over $2.4 million as of Wednesday, showing increased user interest in its DeFi ecosystem. The largest chunk of the inflows was channeled into PancakeSwap’s DEX, as users took their value to the numerous pools on the application. Lending application Venus trailed behind in value inflows.
As user activity on the BNB Chain increased, the native token’s price rallied impressively, crossing $700 and going slightly above the $710 mark to record its new ATH. BNB has maintained a sturdy performance since bullish forces blessed the markets earlier this year. In fact, the token was seen holding its own during the depths of the bear market last year.
Analysts expected it to break out as the bull market progressed this year, and it has finally done and can go further. The catalyst pushing its price upwards is its deflationary mechanics observed due to the chain committing token burns. Token burns are a process in which tokens are sent to wallets with no private keys – no one has access to such wallets. The point of doing so is to remove tokens from circulation periodically to invoke scarcity.
The BNB Chain has been indulging in frequent burns of its native asset since 2021 by removing a portion of the gas fee of every transaction from circulation. Blockchain trackers reveal that over $400,000 worth of BNB tokens were burnt just in the past week. The sudden deflation alongside bullish forces pushing the crypto market up the past few days, has allowed the BNB token to reach new heights.