Huobi, formerly one of the largest cryptocurrency exchanges in China, has announced the release of his own token on the blockchain of Ethereum in the standard ERC-20. Limited edition of 500 million Huobi Token (HT) is scheduled to begin on January 23. According to the statement, 300 million HT (60%) will be available for sale to customers within 15 days, and 40% will be reserved for the working platform, promoting the team and encouraging users.
Huobi said that the launch of the token «is not the primary location of the token (ICO)». HT 300 million will be sold at a discount for users who purchase the package service on Huobi Pro for Tether (USDT) is a cryptographic token tied to the U.S. dollar. The company said that there will be a limit as to the maximum and minimum number of purchased tokens for a single user. Minimum order should be 100 HT.
According to Leon Lee (Leon Li), the founder of Huobi Group, the news marks the latest step taken Huobi to recover lost market share after the business suffered significantly from the ban of the Chinese government. After the actions of the Chinese regulators, the market has moved on OTC trading and is targeting overseas markets with the opening of the platform Huobi.pro.
«We ceased trading on 15 September and opened the OTC-trade 1 November last year. On 1 November, the trading volume reached only 4-5% of the volume, which was before closing September 15,» — said Lee in an interview. «Regulators significantly influenced our work.»
Lee also noted that due to new emission Huobi will be able to charge for the service in advance, increasing the level of user loyalty.
«For example, if you purchase package 1 000 HT, it will cost just 990 USDT and you will get 1 000 HT free. HT can be used to compensate for the trading fees,» the company said.
The ultimate goal, according to Lee, is to turn a HT into an asset that will unite members on the exchanges Huobi in Japan, South Korea and the United States as the company expands abroad. Lee also added that business registration in the US will take some time, but new enterprises in Japan and South Korea is scheduled to open in March of this year.
Meanwhile, the HT will also be available for trading as the company’s platform will offer trading a few token USDT, BTC or ETH. Huobi will buy the HT at the market price each quarter with a 20% net profit for the period. Lee said that the funds will be kept in the air as a reserve, called the investor protection Fund Huobi, details of which will be available to the public.
Issue of tokens of cryptocurrency exchanges is not new. The first such attempt was made by the exchange Cryptsy at the end of 2014, however, trade tokens helped her to avoid bankruptcy. Second wind tokenization exchanges acquired with a light hand Bitfinex, which after the robbery in August 2016 has released a series of tokens — BFX, RRT and others to monetize the losses. Trade tokens allowed the exchange to close the debt much faster. than expected, mainly due to traders who sold the tokens much cheaper value. Besides Bitfinex has launched a project Tether — tokens tied to Vietnam currencies.
Bitfinex after creating the token after the closing of the American secret services have used the exchange WEX (formerly BTC-e). These tokens are now in the process of foreclosure and are actively traded on the WEX that allows the exchange, at least, to return part of the token in the form of trading commissions.
In 2017 two major exchanges — Binance and KuCoin — ICO conducted, which allowed them to raise funds for business development. Obviously Huobi plans to go the same way. However, the release of the token may indicate that the exchange didn’t go too well, and even a successful tocancel does not guarantee improvement. Therefore, before buying such toknow you need to consider all possible risks.