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.
Today, I filed FTX, FTX US, and Alameda for voluntary Chapter 11 proceedings in the US.
2) I'm really sorry, again, that we ended up here.
Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them.
Ultimately hopefully it can be better for customers.
3) This doesn't necessarily have to mean the end for the companies or their ability to provide value and funds to their customers chiefly, and can be consistent with other routes.
Ultimately I'm optimistic that Mr. Ray and others can help provide whatever is best.
2) I also should have been communicating more very recently.
Transparently--my hands were tied during the duration of the possible Binance deal; I wasn't particularly allowed to say much publicly. But of course it's on me that we ended up there in the first place.
3) So here's an update on where things are.
[THIS IS ALL ABOUT FTX INTERNATIONAL, THE NON-US EXCHANGE. FTX US USERS ARE FINE!]
[TREAT ALL OF THESE NUMBERS AS ROUGH. THERE ARE APPROXIMATIONS HERE.]
Things have come full circle, and FTX.com’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for https://t.co/DWPOotRHcX (pending DD etc.).
2) Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. -- we apologize for that.
3) But the important thing is that customers are protected.
FTX keeps audited financials etc. And, though it slows us down sometimes on product, we're highly regulated.
3) We've already processed billions of dollars of deposits/withdrawals today; we'll keep going. (Taking up anti-spam checks to process more--sorry if you got those. We're hitting node rate capacity, will keep going.) Also tons of USD <> stablecoin conversions going on.