Huobi, the third largest cryptocurrency exchange by trading volume, has recently announced it plans on investing $100 million towards building Huobi Chain Project, which is set to allow it to migrate its operations onto a blockchain and become a decentralized exchange.
According to an announcement the company posted, the Huobi Chain Project (HCP) is going to be accompanied by the Huobi Chain Superhero Championship Program (HCSCP), a competition that’s reportedly divided in ten milestones that will incentivize the community to help build HCP.
The project is initially going to be funded with 20 million Huobi Tokens (HT), which at press time are worth about $104 million. Per Huobi, once its complete all developed code will be open-sourced, so the company can gradually migrate its platform into the new public blockchain.
Leon Li, Huobi’s founder and CEO, stated:
“We firmly believe in a decentralized future, and the main goal of the Huobi Chain project is to transform a centralized corporation to a decentralized one that’s run by the community. Our dream is for Huobi to run on the public blockchain and become a truly decentralized autonomous organization.”
Becoming a decentralized exchange will see Huobi move from a centralized structure where its team is in charge, to one where code and the community make the decisions, with no third-party interference. Essentially, a decentralized exchange will have no control over who uses it, and no one verifying financial transactions in the back.
Decentralized cryptocurrency exchanges have been part of the cryptocurrency ecosystem for a few years. The first experiment the industry made with a similar decentralized autonomous organization (DAO) saw The DAO, a project that raised $150 million through an initial coin offering, lose $50 million to hackers. These losses were later on reversed in a bailout that split the Ethereum blockchain to its current form, where we have Ethereum (ETH) and Ethereum Classic (ETC).
Binance, the world’s largest cryptocurrency exchange, has also revealed it’s going to launch a decentralized trading platform, which is set to exist alongside its centralized platform that, in the last 24-hour period, processed a $1.4 billion trading volume.
As for Huobi’s effort to become a decentralized exchange, it’s set to start recruiting a team to work on the blockchain. According to reports, it’s going to be live in about 18 months, and will see a “percentage of Huobi’s yearly revenue” help fund the program.