The cryptocurrency exchange industry is often seen as a black box—users trade assets, pay fees, and move on. But behind the scenes, these platforms are generating massive profits. One of the clearest indicators of an exchange’s financial health is its platform token buyback and burn program. By analyzing how much of their native tokens exchanges are buying back and removing from circulation, we can estimate their revenue and profitability.
In this deep dive, we analyze the buyback and burn data from 2019—focusing on major players like Huobi, Binance, and OKX, along with key second-tier exchanges such as KuCoin, MXC (MEXC), and BiKi—to uncover who’s truly leading in profitability.
How Platform Token Burns Reveal Exchange Profits
Most top exchanges issue a native utility token (like HT for Huobi, BNB for Binance, or OKB for OKX) that offers users benefits such as discounted trading fees. To increase token value over time, these platforms commit to regularly using a portion of their profits or trading fees to buy back tokens from the open market and permanently destroy them—a process known as "burning."
Because the amount burned correlates directly with exchange income, this data serves as a transparent proxy for measuring profitability—even when exact financial statements aren’t public.
Let’s break down what the numbers reveal.
The Big Three: Huobi, Binance, and OKX
🔹 Huobi: Consistent Profit Engine
In the first three quarters of 2019, Huobi destroyed 33.58 million HT tokens, valued at approximately $115 million at the time. According to Huobi's policy, 20% of the combined net income from Huobi Global and Huobi DM (its derivatives platform) is allocated to HT buybacks each quarter.
Using this formula:
$115 million ÷ 20% = **$575 million in estimated net income**
Applying a standard pre-tax profit margin of 64% (based on Accenture’s industry analysis), Huobi’s estimated profit for Q1–Q3 2019 comes in at around $368 million.
This demonstrates a highly efficient and scalable business model with strong cash flow generation.
🔹 Binance: Aggressive Burn Strategy
Binance burned 3.7 million BNB tokens during the same period, worth about $76.14 million. The exchange follows a clear rule: 20% of its quarterly profits are used to buy back and burn BNB.
With that in mind:
$76.14 million ÷ 20% = **$380.7 million in estimated profits**
That puts Binance slightly ahead of Huobi in terms of profitability during this window—making it one of the most profitable crypto ventures globally.
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🔹 OKX: Late but Promising Entry
OKX officially launched its buyback program in April 2019 and reported burning 6.1 million OKB tokens between June 1 and August 31, totaling $14.04 million. The exchange dedicates 30% of its spot trading fee revenue to OKB buybacks.
From this:
$14.04 million ÷ 30% = **$46.8 million in spot trading fees over three months**
Annualized, that’s roughly $187 million in annualized spot fee revenue**. At a 64% margin, OKX’s estimated profit from spot trading alone would be around **$29.9 million for those three months.
While lower than Huobi and Binance, OKX showed strong momentum—especially considering its later start and focus on derivatives and institutional services.
Second-Tier Exchanges: Who Stands Out?
While the top three dominate, several emerging platforms are making waves through aggressive token economics and niche strategies.
🔹 KuCoin: Early Innovator in Token Burns
KuCoin destroyed 656,000 KCS tokens (worth ~$715,000) in the first half of 2019. It commits to using at least 10% of quarterly profits for buybacks.
Thus:
$715,000 ÷ 10% = **$7.15 million in profit for H1**
Additionally, KuCoin announced an extra 894,000 KCS burn, signaling growing confidence in its revenue stream.
🔹 MXC (MEXC): Full Fee Redistribution Model
MXC burned 38.44 million MX tokens, valued at $5.61 million, across the first three quarters. Its unique model allocates 100% of daily trading fee profits to MX buybacks.
This means MXC generated roughly $5.61 million in net trading profit during this period—impressive for a smaller exchange.
🔹 BiKi: High Volume, Rapid Growth
BiKi reported burning 91 million BIKI tokens, worth about $6.26 million, in 2019. It reinvests 100% of all trading fees (from both mining and non-mining pairs) into buybacks.
Assuming a 64% margin:
$6.26 million ≈ total fee income → Profit ≈ **$4 million**
Despite aggressive growth tactics and frequent new listings, BiKi maintained solid profitability.
🔹 BKEX: Steady Performer
BKEX burned 8.31 million BKK tokens (~$1.1 million), using 70% of trading fees for buybacks.
Estimated fee income: ~$1.58 million
Estimated profit: ~$1 million
While not a market leader, BKEX shows consistent operational discipline.
Note: ZB Exchange conducted a one-time burn of 1 billion ZB tokens but did not disclose timing or financial linkage, so it was excluded from comparative analysis.
Key Takeaways: Who Is the Most Profitable?
| Exchange | Est. Profit (Q1–Q3 2019) | Burn Value | Revenue Model |
|---|---|---|---|
| Binance | ~$380M | $76.1M | 20% of profits |
| Huobi | ~$368M | $115M | 20% of net income |
| OKX | ~$29.9M* | $14M | 30% of spot fees |
| KuCoin | ~$7.15M (H1 only) | $0.715M | 10%+ of profits |
| MXC | ~$5.61M | $5.61M | 100% of fee profit |
| BiKi | ~$4M | $6.26M | 100% of fee income |
*Annualizing OKX’s partial-period data
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Clearly, Binance edges out Huobi by a narrow margin, making it the most profitable exchange in 2019 based on available burn data. However, both operate at an elite scale far beyond their peers.
Among second-tier platforms, KuCoin leads in profitability, followed closely by MXC and BiKi—though their models differ significantly in sustainability and transparency.
Frequently Asked Questions (FAQ)
Q: What does "burning" a token mean?
A: Burning refers to permanently removing tokens from circulation by sending them to an unrecoverable wallet address. This reduces supply, potentially increasing value if demand remains constant or grows.
Q: Can we trust these profit estimates?
A: While exchanges don’t publish audited financials, their burn policies are usually transparent and verifiable via blockchain records. As long as rules are consistently followed, estimates provide reliable insights into relative performance.
Q: Why do exchanges burn tokens?
A: Token burns create deflationary pressure, which can drive price appreciation. This rewards holders and strengthens ecosystem loyalty—similar to stock buybacks in traditional finance.
Q: Is higher burn volume always better?
A: Not necessarily. Context matters. A large burn funded by unsustainable practices (e.g., selling reserves) may mislead investors. Sustainable profitability behind burns is what truly counts.
Q: How does OKX compare today versus 2019?
A: Since 2019, OKX has expanded significantly into derivatives, DeFi, institutional services, and Web3 infrastructure—positioning itself as a full-stack digital asset platform rather than just a spot exchange.
Q: Are platform tokens good investments?
A: They can be—but come with risks. Their value depends heavily on exchange performance, market conditions, regulatory shifts, and broader crypto adoption trends. Always do your own research before investing.
Final Thoughts
The crypto exchange landscape is fiercely competitive—and highly profitable for those who master scale, efficiency, and user retention.
In 2019, Binance and Huobi stood head-and-shoulders above the rest, with quarterly profits rivaling established fintech firms. OKX trailed behind but demonstrated strong potential through strategic focus areas.
Meanwhile, rising stars like KuCoin and MXC proved that innovative tokenomics can help smaller players gain traction—even amid market volatility.
As the industry matures, transparency through mechanisms like token burns will become increasingly important for building trust and attracting long-term users.
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