Crypto exchange Huobi has just sent 20 million of its native HT tokens worth over $60 million to a burn address. This significant transfer was highlighted by the renowned blockchain tracker Whale Alert.
Token burning is the intentional, long-term elimination of a specific number of cryptocurrency tokens from circulation. The burn involves sending the tokens to an address where they are irreversibly locked or rendered unusable, a practice that plays a significant role in shaping various aspects of a cryptocurrency’s ecosystem.
There are several ways to implement burning cryptocurrency tokens, and each has its own mechanics and ramifications. In Huobi’s case, it operates on a buyback and burn program. The exchange commits to using 20% of its quarterly revenue to buy back HT from the market and subsequently burn it thereby reducing the token’s total supply and increasing its demand in the market.
Huobi Burns 20M HT Tokens
According to Whale Alert on X (formerly Twitter) the crypto exchange sent 20 million of its native token HT worth about $60 million to a burn address. This action might have been aimed at reducing the overall token supply which will lead to the scarcity of the remaining tokens potentially impacting its value. Users and investors may find this scarcity appealing because it can give the product a feeling of exclusivity and rarity.
Houbi’s recent token burn marks the exchange’s first burn of this year. It is worth noting that the firm has been using this program since 2018.
Meanwhile, data from the price tracking platform Coinstats shows that the latest news had no significant effect on the token’s price. At the time of writing, HT trades at $2.87, representing a 1.64% increase in the last 24 hours.
Huobi’s Previous Token Burn
Huobi executed a substantial token burn in the third quarter of last year eliminating 2 million HT coins from circulation. As of October 15, 2023, the exchange has burnt a total of 301 million HT marking a crucial step forward in the platform’s burning mechanism.
The idea of burning tokens is probably going to stay a dynamic and important part of determining the future of different blockchain projects as the cryptocurrency industry develops. This is because the practice goes beyond reducing token supply, it also influences the economics, sustainability, and value proposition of a cryptocurrency.
