Huobi is a Chinese exchange that commanded a significant portion of the market in China when exchanges were thriving. The exchange recently announced that they would be deploying their token, conforming to the ERC-20 standard.
The team over at Huobi will be calling their new issuance, the Huobi token, this issuance will have a limited supply of five hundred million coins and will never be increased. They planned on allocating sixty percent of the total supply, (300 million HT’s) and distributing them over the course of fifteen days.
The company states that their token can be utilized in various ways, but initially it will be used as material to provide holders of the token with significant discounts on their trading fees. The tokens can be used in other ways, a few of them are, certified corporation deposits for statutory token trading, token transactions and more.
An interesting aspect of these tokens is that holders of the token will have some voting rights, getting to choose which tokens will be supported by the exchange.
Not an ICO
The exchange wants people to know that is not to be considered as an Initial Coin Offering. They are conducting this offering differently because of regulatory concerns in China and other areas that they might be based out of. This offering allows users to purchase their tokens only with through the purchase of what they are calling a ‘Point Card’ via the Huobi Pro platform. The point card is a card rolled out by the Huobi platform to serve as a prepaid card for service charges. One point on the card will be equal to one USDT; these Huobi tokens can be traded for USDT, Bitcoin, and Ethereum on the Huobi platform.
They will be taking a similar stance like other exchanges and will be utilizing their profits to re-purchase their issued tokens in the open market. They will also be using a portion of these re-purchased tokens to allocate their investor protection fund.
How was their non-ICO?
Huobi has already deployed the token to immense success. After officially releasing their global points – Huobi Tokens, they were able to see all deployed tokens quickly snapped up by the market. The team over at the organization stated that their point packages sold out within one minute. It seems like there is a real demand for Huobi in the marketplace.
As noted above, Huobi was able to be one of the largest exchanges at a time when exchanges were thriving in China. Huobi and others still operate in China, by placing their headquarters and registering in neighboring countries and Hong Kong. After the Chinese government clamped down on the cryptocurrency industry and left it somewhat in disarray, operators had to choose from several options.
The first option was to leave and go elsewhere, and many have done so. But Huobi and others chose to stay and continue operations in China in a limited manner. They’ve done so through the aspect of the OTC market, of which, there are players like OKEx and OTCBTC, who also participate and cater to the clients.
These companies are playing the role of a connector, they connect those who want to buy to those who want to sell, and they do this by making the site to where it’s like a simplified eBay. A buyer can choose the digital currency that they want and can then browse through the different offers that pop up on the screen.
Buyers then connect their financial accounts to make the purchase and then move the virtual coins to other exchanges.
The only issue is that this quite a hassle, users might have to take more steps to conduct a transaction. A barrier, due to the government regulations in this space is the fact supply is scarce, leading to an increase in prices. Users have to pay a premium to participate in the market, and the price differentials can vary in the thousands, thus providing a more inferior quality experience for these buyers.
Even in the OTC market, users are discouraged in being blatant about their purchases when dealing with banks and other financial institutions which handle money.Follow us on Social Media: