Huobi (HTX) has disclosed its intention to burn a total of 2,062,217 Huobi Tokens (HT) during the third quarter of 2023.
This move is in line with Huobi’s ongoing commitment to reduce the supply of HT in circulation and bolster its value.
The practice of burning tokens has been a consistent strategy for Huobi since 2018, and as of October 15, 2023, a cumulative total of 301,002,441 HT has been burned.
The deflation rate for the third quarter stood at 0.9718%.
In the first two quarters of 2023, Huobi reported revenues of $16.55 million and $26.91 million, respectively, with the announcement indicating that 20% of its Q3 revenue, estimated at approximately US$24.75 million, would be directed towards the burning of HT.
This allocation of a significant portion of revenue for token burning highlights the exchange’s commitment to the practice.
During the second quarter of 2023, Huobi had already burned 1,950,555 HT, further contributing to the reduction of the total supply of HT tokens in circulation.
The accelerating pace of token burning means that as of July 15, 2023, a total of 298,940,224 HTs have been removed from circulation, underscoring the exchange’s determination to diminish token supply.
Huobi’s token burning mechanism is an integral part of its strategy to maintain and enhance the value of HT.
This process involves allocating 20% of the exchange’s revenue towards the burning of HT tokens.
The revenue considered for this purpose encompasses transaction fees generated from spot, futures, and over-the-counter (OTC) transactions, as well as interest earned from isolated margin loans, cross margin loans, and OTC loans.
Withdrawal fees, in addition to revenue derived from various services like margin trading, are also included in this calculation.