Huobi Burns 116 Percent More Tokens Amid Quarterly Revenue Gains
Huobi, a major Chinese cryptocurrency exchange, has taken steps to reduce the supply of the token that powers its decentralized platform, Huobi Token (HT), in a quarterly burning event.
The exchange removed 14,011,700 tokens from a 310,318,300 market supply, at a rate that is 116 percent greater than it did last quarter according to its statement, The company cited “improving market conditions” and sales growth for the decision.
“There are two big trends reflecting the size of this quarter’s buyback. The first is a rapidly strengthening market for digital assets and the other is the increasing popularity of our entire product line.”
As Leon Li, CEO of Huobi Group said.
Since the launch of HT in early 2018, Huobi and its derivatives market, Huobi Derivative Market (Huobi DM), have spent 20% of its quarterly revenue on buy-back each quarter. The bought-back HT will be stored in an Ethereum address called the Huobi Investor Protection Fund as a reserve fund.
The company cited increasing membership to Huobi Prime and Huobi FastTrack programs – generators of fees – as well as a productive spring for the $504 billion trading volume Huobi DM platform.
“The rest of 2019 will see even more improvements and innovations coming from Huobi,” said Li, pointing to coming upgrades to the Huobi Finance Chain, a decentralized finance public blockchain, and improvements to the high-frequency algorithmic API.
Huobi’s quarterly buy-back amount
By the end of the second quarter of 2019, Huobi had burnt 213.568 million HT, including 2 quarterly burn and 6 FastTrack and Prime Lite burn.14.0117 million were burnt, 20% of Q2 revenue, 64.7748 million were burnt, 20% of Q1 revenue, and 870.3 million by FastTrack and Prime Lite votes. Revenues fluctuate quarter to quarter, meaning Huobi does not always burn a consistent amount. This past quarter is no different. Driven by strong growth, the company’s revenues put towards its token burning plan represents an increase of 232 percent quarter-over-quarter.
HT’s current market supply is 246.437 million, 10.478 million less than Q1’s 256.918 million. Its current circulation rate (HT market circulation/HT market total) is 74.3%, which is 3.55% less than Q1’s 77.85%.
In addition, Huobi announced the adjustment of HT destruction plan. Considering the recent high price at the end of this quarter, the destroyed price is adjusted to the average actual repurchase price. The second quarter of 2019 will be the last time to burn by traditional method of repurchase. In order to further enhance the transparency of HT destruction and reduce the impact of release of team incentives on the market, Huobi will optimize the HT destruction plan in the near future.