Chinese Crypto Exchanges Scramble to Burn Their Exchange Tokens
Chinese crypto exchanges scramble to burn their exchange tokens in Q3,2019. OKEx intensively completed four repurchases in May this year, while Huobi started intensively burn its token (HT) from April (including quarterly burn and weekly burn). And Binance burned its token owned by its staffs, which was controversial.
The common way to burn is that the crypto exchanges buy back its token from the market regularly or irregularly with a part of its profit / income / transaction fees, thus reducing the total market flow to deflate coin value.
Huobi global repurchased 11.3321 million HT, of which 8.3389 million were directly repurchased from the secondary market, 2.9932 million were from the HT deduction income with a cumulative investment of 40.637 million USDT, an increase of 70.6% over 2018 Q3’s 23.8134 million USDT in Q3 2019.
On October 17th, Binance announced that it had finished the BNB destruction of Q3,2019 with a total amount of 2061888 BNB, equivalent to $36.7 million. This is also the ninth destruction of BNB, now 185475866 BNB is remaining in the current market.
BNB burnt is directly from the team is also the major difference between Binance and the other two major exchanges in the management of exchange tokens. At present, both OKEx and Huobi adopt the mode of “buy back + burn” to deflate their exchange tokens.
It is notable that 2019’s Q3 is the last time that Huobi adopted the previous way to repurchase. From the fourth quarter, the HT destruction plan will be adjusted, that is, 15% of the quarterly revenue will be used for destruction, 5% for destruction of HT used for “team incentive”, and HT of “team incentive” will no longer flow the market.
“Thanks to the significant increase in trading volume, the repurchased amount in the third quarter increased significantly compared with Q3 last year. In the third quarter, Huobi global added more high-quality assets, reducing transaction costs and expanding our one-stop service advantage in crypto asset transactions. ”
Said CEO of Huobi global, repurchase is a good way to deflate the coin’s price. In fact, the growth logic of the exchanges is very simple. C-end users follow B-end projects, only by grasping high-quality B-end projects can they maintain the growth of C-end users.