The amount of Huobi token that Huobi Global burned in July indicates the crypto exchange’s revenue probably fell last month.
- The total value of HT burned dropped 54% from June to $22.3 million, the exchange said.
- The burn 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 decline 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, the person said.
- Factors other than revenue, such as token price, could also affect the burn, Wayne Zhao, a partner at Beijing-based crypto analytics firm TokenInsight, told CoinDesk.
- Huobi's token burn 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.
CORRECTION (AUG 16, 11:34 UTC): Clarified that the change was in total burned, not burn rate.