Huobi Revenue Took a Hit in July, Burn Rate Suggests
Right now•2 min read•Other
That rate at which Huobi Global burned Huobi Token in July indicates the crypto exchange’s revenue probably fell last month.
Huobi's burn rate dropped 54% from June to $22.3 million worth of Huobi Token, the exchange said. The burn rate is positively correlated to revenue, so a decrease in burned tokens indicates a fall in revenue. Token burning is a process by which crypto coins are taken out of circulation, often aimed at keeping inflation low. Huobi burns 15% of its revenue, and allocates another 5% of total income to repurchase and burn a portion of HT Team Incentive Rewards, a spokesperson told CoinDesk via WeChat. The drop in burned HT is a "natural response" to market trends, the Huobi spokesperson said. Trading volumes have decreased throughout the industry in the last month because of regulatory actions, they said. Factors other than revenue, such as token price, could affect the burn rate, Wayne Zhao, a partner at Beijing-based crypto analytics firm TokenInsight, told CoinDesk. Huobi's burn rate had been increasing since March until it reached $138.579 million in May, and then started dropping. Chinese authorities started a harsh crackdown on the domestic crypto industry in May. The exchange dissolved a Beijing entity in late July, claiming it was a defunct corporate entity that was not in use. TokenInsight estimated Huobi's spot trading volume at $1.16 trillion in the second quarter, beaten only by Binance's $3.57 trillion. OKEx was third with $877 billion.