Huobi (HT)

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Chinese mining pool and exchange (the worlds 4th largest exchange in 10-2018)

Basics

  • Founded in: 2013
  • Testnet release: Huobi ECO Chain (Heco) Testnet was released on the 10th of December 2020. However, this is after it already announced a public testnet of Huobi Chain back on 29-2-2020.
  • Mainnet release: as of 29-7-2021 it says that mainnet has been live for 240 days.
  • Aka Huobi Group
  • Beijing-based, founded in 2017. Update (2-3-2020); Singapore-based. And now Seychelles-based according to CoinDesk (8-12-2020).
  • From this Bitcoin.com article (6-11-2019):

"A source has reported to news.Bitcoin.com that the Chinese government is attempting to directly manage the crypto exchange industry in the country. According to the source, this could lead to frozen assets for U.S. account holders and others. Notably, Huobi Global’s website has announced that U.S. accounts “have been gradually disabled” due to compliance issues, and that they “will freeze all US user accounts from 13 November 2019 (GMT+8) onwards.”"

History

  • From Unchained (6-8-2023):

"Data from DeFi Llama shows that Huobi saw over $60 million worth of outflows over the weekend, bringing Total Value Locked (TVL) at the exchange down to $2.5 billion at the time of writing.

The larger-than-normal outflows followed reports that senior executives at the exchange had been arrested by Chinese police, amid an investigation into whether the firm provided payments and settlements through cryptocurrency for gambling programs.

Cochran also claims that Huobi is likely insolvent, evidenced by a rapid selloff of USDT on Friday after the news of the alleged police investigation was made public, and weeks of steady decline in USDT reserves at the exchange. His analysis points to Huobi holding just $90 million worth of USDC and USDT, despite Huobi’s “Merkle Tree Audit” claiming a wallet balance of $631 million USDT."

  • Leon Li; founder "An alumnus of Tsinghua University, Li was a computer engineer at Oracle before founding Huobi. On August 1, Huobi launched a simulation trading platform, and on September 1 the Bitcoin trading platform launched."

Audits & Exploits

"⌛️ 26 days since Proof of Reserves

📎 Announcement

🔎 Assets included: BTC ETH USDT TRX

❌ Merkle tree not available or not verifiable online

❌ Merkle tree not open sourced

✅ Wallet addresses made public

❌ Wallet ownership not audited by third-party

❌ Wallet ownership not proven publicly by custom message"

  • CertiK claims to have done an audit for them, according to their website (12-6-2020).

Bugs/Exploits

  • HTX & Heco bridge $99M lost (11-2023).
  • HTX first disclosed the hack on September 25 after one of the exchange's hot wallets was compromised and drained of 5,000 ETH. "We have confirmed that the hacker has fully returned all funds, as promised, and we have also paid the hack a white hat bonus of 250 ETH," wrote Sun in a post (9-10-2023).
  • Is vulnerable to an exploit in Ethereum. From Bitcoin.com (27-8-2020):

"ERC20s who are allegedly vulnerable to the fake deposit exploit include BRC token, PWR token, BAT, HPT token, Cloudbric, RPL token, Moviecredits, and more."

Governance

DAO

Self Funding Mechanism

Token

Launch

Token allocation

"Huobi Token has a limited total supply of 500 million. After its launch, 60% (300 million coins) were allocated among the users of the exchange and the company kept aside 40% (200 million coins) in reserve."

Utility

"Huobi Token (HT) is an exchange based token and native currency of the Huobi crypto exchange. The HT can be used to purchase monthly VIP status plans for transaction fee discounts, vote on exchange decisions, gain early access to special Huobi events, receive crypto rewards from seasonal buybacks and trade with other cryptocurrencies listed on the Huobi exchange."

"Although Huobi Chain will support multiple cryptocurrencies such as bitcoin (BTC) and ether (ETH), the exchange's native Huobi Token will be the protocol's sole utility token. Support for other types of digital assets will be added over time, the exchange said."

  • There are burns and fee discounts.

Token Details

  • Has it's own token: Huobi Token (HT)
  • Has interest on deposits 

Burns

20% of revenue from Huobi Contract will be used for the regular repurchase and destruction of HT.

20% of revenue from Huobi Global will be used for the regular repurchase and destruction of HT.

Stablecoin

  • HUSD stablecoin returns to $1 peg (19-8-2022) after slipping to $0.92 per token. Issuer says de-peg was caused by the closure of some market maker accounts.
  • Approximately $70.8 million of Gemini dollar (GUSD), which represents 78.6% of the total supply, is currently stored in Huobi's wallets. In October, Huobi launched an all-in-one stablecoin wrapper called HUSD, which allows users to deposit any of TrueUSD, Paxos Standard, USD Coin and Gemini dollar and then withdraw any of them regardless of which one was deposited. Huobi has less than $7 million of the other three stablecoins combined, which could suggest that there is higher demand to withdraw non-GUSD stablecoins. 
  • HUSD is now running on both Ethereum and Nervos (8-12-2020). 

Coin Distribution

  • Justin Sun, the founder of the Tron network, revealed his new role as an advisor to the Huobi exchange and now owns “tens of millions” of its tokens (17-10-2022).
  • There are multiple addresses within the top 10 that have between 12 and 3% of the total supply (29-7-2021).

Tech Huobi Eco Chain (HECO)

Transaction Details

  • Average block interval: 3s

How it works

  • From here (29-7-2021):

"Huobi Eco Chain (Heco) is an EVM-based blockchain that uses HT as the native currency. HT is the Huobi token. Heco is using POS consensus with a maximum of 21 Validators."

"The technology would allow regulators to maintain oversight of the distributed ledger through delegated proof-of-consensus (DPOS). A decentralized identification system (DID) allows users to create identity profiles that can be accepted and verified by regulators in multiple jurisdictions."

"Huobi Chain, the regulator-facing public blockchain of exchange Huobi Group, is now open source and publicly available to all developers on GitHub, the firm said Tuesday.

The firms are developing pluggable components for the network that could enable regulators to supervise contract deployments, asset holdings and transfers, as well as the enforcement of anti money laundering regulations, Bo Wang, a Nervos researcher, told CoinDesk. The components will also allow financial institutions, such as banks and regulatory agencies, to freeze assets and accounts in case of emergencies via sidechains, according to Wang.

“Supervision nodes will enable regulators to independently run and maintain nodes, extract data, and participate in the ecosystem’s supervision,” he said, noting Huobi Chain will also provide tools for pre-deployment audits and continuous tracking.

Huobi Chain unveiled the public blockchain in July in partnership with blockchain startup Nervos. It can be used for financial services and applications, including lending, debit services, stablecoins, security token offerings, exchanges and payment services, the company said."

"Huobi said its new blockchain will allow businesses and regulators to determine the rules of the road for the emerging DeFi space. "With Huobi Chain, we want to provide the decentralized framework that facilitates industry-wide collaboration, which is critical to the widespread adoption of DeFi," said Ciara Sun, Huobi vice president for global business.

Entities in the financial services sector, including banks, will be able to use Huobi Chain to develop DeFi applications that have anti-money laundering (AML) and know-your-customer (KYC) compliance baked into the chain itself, the exchange said."

Fees

Upgrades

"In December 2020, the Huobi ECO chain, Heco officially launched its "Tinder" phase, which will focus on improving the on-chain infrastructure, including but not limited to: Oracles, Voting tools, Anchor Coins, DEX, Lending, Fnancial Management, Insurance, Synthetic Assets, Cross-Chain Solutions, Data Analysis, Smart Contract Innovation, etc."

Staking

"Incomes will be allocated according to the ratio between users’ votes and total votes. The specific nodes and users’ income rules are stated as follows:

1. Node earnings:

All node service charges will be allocated according to the following ratio: 50% service charges will be equally distributed to each host node. 40% service charges will be issued according to the HT quantity of locked by all 21 central nodes. 10% will be distributed to the corresponding locked position HT of 11 standby nodes for allocation.

2. Node earnings for users:

Capital allocated to users by nodes will be limited to 70%-100%. The specific amount will be determined by the node sponsor or the community by voting.

3. Earnings gained by users

Earnings gained by users from nodes are calculated according to the ratio between HT quantity pledged by users via voting and all pledged HT quantity. And income distribution is conducted according to this ratio."

Staking Stats

  • The explorer says that there is a total 672 HT staked (which would mean about 6720$ worth.). When looking at the amount of HT in the validator accounts, the most common value was 0.0000001 HT.

Liquidity Mining

Scaling

Different Implementations

Interoperability

Other Details

Privacy Method

Compliance

  • Rumors about executives being arrested in China resurfaced (8-2023).
  • From Decrypt (8-10-2022):

"Huobi shuttered its U.S. operations back in late 2019 and hasn't reopened since. It shut its operations in China in 2021 shortly after a sweeping state-wide crackdown on cryptocurrencies by Chinese authorities forced the exchange to stop registering accounts with mainland Chinese phone numbers and halt trading derivatives in China in order to remain compliant. And earlier this month, Huobi delisted seven privacy coins citing “latest financial regulations.”"

Oracle Method

Has Chainlink integrations live on HECO (7-2-2023)

Their Other Projects

Validating

Bithumb

"Huobi is reportedly looking to purchase Bithumb in a bid to legalize its Korean operations."

Roadmap

  • Can be found here.
  • Plans to launch their public chain in Q2 of 2019. Update: Huobi Chain's mainnet launch is expected (2-3-2020) to take place later in 2020.

"Huobi chain that uses the Muta framework is expected to launch in Q4."

"In December 2020, the Huobi ECO chain, Heco officially launched its "Tinder" phase, which will focus on improving the on-chain infrastructure, including but not limited to: Oracles, Voting tools, Anchor Coins, DEX, Lending, Fnancial Management, Insurance, Synthetic Assets, Cross-Chain Solutions, Data Analysis, Smart Contract Innovation, etc."

Usage

  • From this blog (19-6-2021):

"It already has 124 dApps with a total volume locked (TVL) of $6.42 billion."

Projects that use or built on it

Competition

Pros and Cons

Pros

Cons

  • A wallet address linked to the Huobi exchange was found (13-11-2022) transferring 10,000 ETH to Binance and OKX deposit wallets soon after releasing its asset snapshot.
  • The Chinese government is on key positions within the company.
  • Has shown multiple times that it is willing to act unethical.
  • Participated in the Tron takeover of the Steem blockchain. From DAR Weekly (6-3-2020):

"Sun with the assistance of major exchanges Binance, Huobi, and Poloniex (recently acquired by Tron) used their stake of STEEM (native currency of the network) to prevent the soft fork as well as release the founders fund of STEEM, which accounts for approximately 20% of the circulating supply. Moreover, the funds were utilized to take over the majority voting rights and replace the previous Block Produces with loyal ones. The funds deployed by exchanges were determined to be those owned by individual users, who face a 13-week lockup period. As a result, a huge community backlash ensured, with the departures of multiple Steem developers as well as the Head of Communications.

Objectively speaking, since the announcement on February 14th, the STEEM token has declined 27%. As for the Steemit community, it has not only turned against Justin Sun, but also the very exchanges that aided in the takeover, despite Binance and Huobi citing misleading information."

"In EOS, token holders can vote for block producers (validators) and the top 21 block producers participate in the consensus process and share inflationary rewards. Since private keys controlling EOS tokens can also vote in governance, exchanges have effective control over the governance rights of the tokens custodied with them. Huobi, one of the largest cryptocurrency exchanges, was found to accept bribes from block producers in order to elect them."

Team, Funding, Partners

Team

"According to reports, digital currency exchange Huobi has laid off approximately 20% of its staff. Colin Wu first reported on the situation on Dec. 30, 2022, and said: “Justin Sun’s Huobi exchange will cancel all year-end bonuses, and will prepare to lay off the team of 1,200 people to 600-800 people, and cut the salaries of senior employees, according to several insiders.”

“Due to the sudden investigation in early November, both acquisitions will be suspended until the Chinese government's investigation end. The founder of Huobi is not allowed to leave China since 2017,” he said. But Huobi disputes such allegations. It rubbished reports earlier this month that suggested any of its executive team members or founders were arrested or detained in China."

"The source most notably told news.Bitcoin.com that according to an insider, the Chinese Communist Party (CCP) is stepping into managerial positions at popular crypto exchange Huobi: "It’s the fact. Already have CCP members take role as huobi management.""

Investments

"In November 2013, Huobi received angel investments from Dai Zhikang and Zhen Fund. In 2014, Huobi raised a $10 million venture capital investment from Sequoia Capital."

"Tokai Tokyo, an important Japanese Finance Holdings group, announced a new $4.6 million investment in the Japan wing of Huobi, an important cryptocurrency exchange. In a press release Tokai Tokyo recognized the importance of decentralized technologies, and explained how this deal will help them “promote new businesses in the areas of crypto asset exchange, new financing schemes such as Initial Exchange Offerings (IEO), local currency issuance, and storage and management service associated with crypto assets.”"

"Huobi Group is deploying $100 million into decentralized finance (DeFi) projects as well as mergers and acquisitions through its new consolidated investment arm. Huobi Ventures is also setting up a $10 million NFT fund focused on investing in non-fungible token (NFT) collectibles and marketplaces, the firm said. To date, the company has invested $69.42 million in blockchain, media, stablecoin and other projects, according to the statement."

"Five strategic investment funds totaling $100 million have launched in a bid to accelerate the growth and development of key projects in Solana’s blockchain ecosystem. The funds are each bringing $20 million in investment to boost growth and development for Solana in the Chinese region. Three funds from crypto exchange Huobi; Gate.io’s investment arm, Gate Labs; and crypto investment firm NGC Ventures have each contributed $20 million."

Partners

  • Partner with Cointelegraph
  • Partnered through Huobi Chat with NULS
  • Has joined Chinese Blockchain Services Network (2-10-2019):

"Cryptocurrency exchange Huobi joined a newly created state-backed blockchain organization called BSN (Blockchain Services Network), which is an alliance created by the SIC (State Information Center). The initiative has already recruited some key members of the industry like China UnionPay (the Chinese Visa equivalent), China Mobile, and China Telecom. The new alliance seeks to join several members of the industry through a blockchain service platform."

Global DeFi Alliance

"Huobi DeFi Labs has launched a global DeFi alliance, which is set to establish universal protocol standards for the DeFi space and improve communications within the DeFi ecosystem. The alliance will also conduct research on emerging DeFi protocols to help avoid future crises in the community. The alliance’s inaugural members are MakerDAO (MKR), Compound (COM), Nest (NEST), and dYdX (dYdX)."

"New members comprise Curve Finance, Aave, Synthetix, Balancer, Loopring, Zapper, Zerion, Bitpie, Mykey and CoinGecko. The alliance will host webinars and events intended to bolster DeFi awareness and education targeting firms and users in the Asian region." 

OP Crypto Capital Management

"OP is led by David Gan, a former Huobi executive who played a role in various aspects of the exchange's business including its principle investment strategy as a director. He also served as managing director of Huobi Labs, which incubates early stage blockchain companies. [It will be] a $25 million fund focused on the [metaverse] — emerged from stealth Monday, announcing in a press release backing from Huobi Ventures, Galaxy Digital, Digital Currency Group, Asian investment consultancy The Brooker Group, and Bybit's venture arm Mirana Ventures."

GameFi Fund

  • From Forkast (17-9-2021):

"Huobi, today announced the launch of a US$10 million “GameFi” fund to invest in early-stage projects that integrate blockchain gaming and decentralized finance (DeFi)."

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