A $166 Million Prize to be Offered by Huobi for Own Blockchain Creation

Huobi, a cryptocurrency exchange, announced on Wednesday that it plans to give 30 million of its Huobi Tokens (HT) to fund the creation of the company’s own open-sourced blockchain protocol.

The fund is worth around $166 million and is based on CoinMarketCap data. The company said at a press conference in Singapore that this fund will be used to launch the Huobi Chain Project, with the aim of establishing a decentralized autonomous organization (DAO) on top of the proprietary blockchain.

Chen Guang, a director at the company’s ecosystem development arm, said that the blockchain would serve as a platform for users to participate in token fundraising events (ICOs), and also to vote for which tokens should be listed on Huobi.

The vision of the firm is to migrate its exchange to the blockchain system so it can evolve into a decentralized exchange. But, such a move is not quite certain as it would involve higher levels of efficiency and security.

Chen, nevertheless, believes that the future of the blockchain ecosystem should be a combination of centralization and decentralization.

He told CoinDesk: “We want this to be a social experiment. The future is not likely to be entirely decentralized. As such it’s important to find the equilibrium that balances the two pillars, which is the ultimate goal of this exploration.”

Huobi is, therefore, seeking for external assistance so as to develop the new system by providing the 30 million tokens as a form of encouragement over a number of stages. Also, Chen said that the exchange will allocate a fraction of its yearly revenue to the pool, even though it is yet to disclose the exact percentage.

18 months is the time set in anticipation of the development of the project, which will divide into 8 phases: each of them being a contest for developers to participate in and to compete for the tokens.

Chen said that the company is in the process of recruiting up to 10 well-known leaders from open-source blockchain projects, to be part of the committee that will be established in the next two to three weeks so as to craft a policy and self-regulatory framework for the competition. The company has refused to reveal the names on the list.

Once in place, the committee will nominate a list of candidates for Huobi Chain project’s potential global lead. Then after, users will vote for the preferred candidate with their Huobi tokens. The winner will lead the development of the project and fund allocation for each phase.

Chen said that the amount of funding to be provided for each stage, even though yet unknown, will increase as the project progresses.