Huobi revenue took a hit in July, burn rate suggests
|That rate at which Huobi Global burned Huobi Token in July indicates the crypto exchange’s revenue probably fell last month.
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Huobi's burn rate dropped 54% from June to $22.3 million worth of Huobi Token, the exchange said.
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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.
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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.
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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.
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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.
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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.
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The exchange dissolved a Beijing entity in late July, claiming it was a defunct corporate entity that was not in use.
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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.
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