Watch out, Binance Chain. The Huobi brand is coming out with its own in-house blockchain.
Announced on July 1st, the platform, developed in collaboration with Nervos — a “layered blockchain network” project — was announced by the exchange group as a “regulator-friendly” and efficient system for companies to launch their own tokens through:
“The project [is a] high-performance financial blockchain that allows enterprises, financial institutions, and exchanges to deploy their own blockchains, tokenized assets, and DeFi services […] the project will have the potential to host lending services, debit services, stablecoins, security token offerings (STOs) and other means of asset issuance, decentralized exchanges (DEXs), real-world payment services, and more.”
Expanding on the announcement, Huobi Group chief executive officer Leon Li said the pivot was part of ensuring that Huobi’s brand would be able to withstand the shifting tides of the cryptoecomony:
“During the past six years, Huobi has accumulated a lot of experience in the field of cryptocurrency trading, which has given us advantages in terms of understanding blockchains, accumulating key technology […] Although Huobi is currently a leader in the cryptocurrency industry, this industry is likely to undergo far-reaching changes in the future. Exploring public chain technologies and business models both keeps us innovative and serves as a strategic defence.”
The platform, which will be open-sourced and thus freely available for contributions, will provide native Know Your Customer (KYC), Anti-Money Laundering (AML), and decentralized identity (DID) solutions.
The exchange group has accordingly said regulators will be able to serve as validators on the new blockchain network, similar to how Facebook’s partners have committed to serving as Libra validator nodes.
The effort comes as the only the latest initiative involving a cryptocurrency exchange launching its own blockchain platform. For example, the Binance Chain mainnet activated back in April, and ever since then, the system has started gaining ground as a keystone of the exchange’s coming decentralized ecosystem.
Building a Blockchain to Become More Dominant
When Binance Chain activated in the spring, Binance DEX — the company’s decentralized exchange offshoot — launched on the blockchain, giving traders the ability to use a non-custodial trading service under Binance’s banner.
With the new mainnet has come a new token standard, BEP2, akin to the ERC20 token standard that has become popularized by Ethereum, and the exchange has invited projects throughout the ecosystem to launch their tokens on Binance Chain or migrate their existing assets over.
The first such project to take the leap was Mithril, a cryptocurrency-centric social media play. The associated MITH token acutely spiked more than 60 percent upon the declared shift to BEP2.
Indeed, giving startups the ability to leverage Binance’s brand infrastructure and users the ability to trade without an exchange controlling their funds have been characterized by the exchange’s leadership as the pillars of the Binance Chain and Binance DEX tandem.
“With no central custody of funds, Binance DEX offers far more control over your own assets,” Binance CEO Changpeng Zhao said upon the DEX’s release.
“We hope this brings a new level of freedom to our community,” he added.
Binance and Huobi Global are currently among the top three largest cryptocurrency exchanges in the world per daily trade volume, so the fact that the two have pivoted to spinning out their own blockchains suggests other prominent though smaller exchanges may be influenced to do the same.
And while Binance Chain will have a de facto competitor in Huobi Finance Chain, both platforms can tap into their parent exchange’s large and cosmopolitan userbases to propel their prospects forth.