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14mln Huobi tokens burnt for improving market conditions

Maya Mandz | Jul. 16, 2019
14mln Huobi tokens burnt for improving market conditions

July 16, 2019 | AtoZ Markets - A Singapore-based digital currency trading platform and one of the oldest crypto exchanges Huobi has recently burnt 14 mln Huobi tokens to stabilize the currency’s price and create an incentive for users to hold the token by curbing inflation. 

14mln Huobi tokens burnt to improve crypto market conditions

Huobi Group was established in 2013 in China. The crypto company includes 10 separate businesses, operates in more than 130 countries and exceeds $1 trillion in accumulative turnover.

As per latest reports, Huobi in a quarterly burning event has taken steps to reduce the supply of the token that powers its decentralized platform Huobi Token (HT).

As per platform's buyback plan, the exchange has completed the destruction of 14,011,700 Huobi tokens ( 53,664,900 USDT) from a 310,318,300 market supply, at a rate that is 116 percent greater than it did last quarter.

The company explained, that the reason behind Huobi tokens burn is “improving market conditions” and sales growth for the entire Huobi Group product line.

The company’s officials 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.

According to the company's announcement, in July 2019, a Huobi's community vote will be carried out regarding two changes :

1) adjust the token burn cycle from quarterly to monthly or daily;

2) confirm the release and Huobi tokens burn proportion of team allocation reserves.

In addition, the company said this token burn cycle “will be the last time Huobi tokens will be destroyed using the traditional buyback method.”

Huobi tokens burn is a regular procedure for the company

The Singapore-based crypto company performs Huobi tokens buyback every quarter, since its tokens’ introduction in 2018.

In the latest Huobi tokens burn, Huobi Global and Huobi DM have spent 20% of its quarterly revenue buying back outstanding digital assets.

As per crypto experts, Huobi does not always burn a consistent amount of Huobi tokens, because revenues fluctuate quarter to quarter.

According to the crypto community, the company’s revenues put towards its token burning plan has increased 232 percent quarter-over-quarter. It hints a significant company's overall revenue growth.

Since the first Huobi tokens destruction on April 15, Huobi has held eight token burning events of a total 21,356,800 HT, more than the 6,474,800 HT it repurchased in the first quarter.

The repurchased tokens are stored in a visible ethereum address, dubbed as the Huobi Investor Protection Fund, and act as a reserve fund. By today, the total circulating supply of the ethereum ERC-20 token is 478,643,200. 

Of course, Huobi is not the only crypto company, performing its tokens buyback.

Recently, Whale Alert tweeted, that Tether Treasury burned 5 billion USDT tokens minted on the Tron blockchain. Later, however, Tether’s CTO Paolo Ardoino explained that they meant to perform a swap of 50 million Omni-based USDT tokens to the Tron blockchain, but made a mistake with the decimals. 

Another large crypto exchange, Hong-Kong based Bitfinex announced that it will spend 27% of past and future their native IEO platform’s Tokinex revenue on burning their native utility LEO tokens

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Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ, nor should they be attributed to AtoZMarkets.