1) Alright guys it's time to talk about @HuobiGlobal!
2) Huobi burned 2.3m HT ~ $22.6m for the month of July.
What does that mean?
3) Well, Huobi claims to burn 20% of its revenue.
(This is a little complicated -- they buy/burn 15%, and then they buy/burn 5% from something that looks kinda like the team allocation: huobi.com/support/en-us/…)
So that means they're claiming about $110m revenue in July 2021.
4) Our data has Huobi doing about $750B of volume in July (roughly $25B/day).
$110m revenue / $750B volume --> 0.015% take rate, which roughly lines up with other large exchanges whose volume is primarily futures.
(This doesn't say anything about expenses, mind you.)
5) What does this imply for HT?
Well, it has a circulating market cap of $2.2B and a fully diluted cap of $2.9B (excluding already burnt tokens).
It's burning about $250m/year, so HT is trading at roughly 10-years burn at this rate.
(How long will Huobi keep burning? IDK!)
6) That's on the low end of multiples as far as exchange tokens go.
Either it's a great buy (relative to others), or the market is pricing in future declines in relative volume.
FWIW, here's Huobi's % of market volume for the past few years:
7) Now what does it say about the business?
Well, Huobi seems to be making about $110m/month ~ $1.3B/year of revenue.
In terms of expenses--I don't know; but based on other large crypto exchanges, I'm guessing they're spending about $500m-$1b/year ($250m from buy/burn).
8) That would imply a net profit of roughly $500m/year for Huobi.
FWIW -- this is in the same ballpark as FTX
9) EDIT: the above is a bit wrong, see here:
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