Major cryptocurrency exchange Huobi is developing a new public blockchain focused on decentralized financial (DeFi) services in collaboration with Chinese blockchain startup Nervos, according to a press release on July 1.
The joint initiative, provisionally named Huobi Finance Chain, is set to operate as a regulatory-compliant financial blockchain network that allows enterprises, financial institutions, as well as exchanges to deploy their own blockchains, tokenized assets and DeFi services.
The project will enable regulators to be able to join the network and contribute to it as validators. To ensure full regulatory compliance, the chain will feature requirements including decentralized identifier (DID) and implement identity protocols such as Know Your Customer (KYC) and Anti-Money Laundering (AML).
It is expected that Huobi Finance Chain will host lending services, debit services, stablecoins, security token offerings (STOs), as well as other means of asset issuance, decentralized exchanges (DEXs) and real-world payment services. The project is expected to open source in Q3 this year, launch its testnet in Q1 2020 and mainnet in Q2 2020.
“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.” Said Leon Li, CEO and founder of Huobi Group.
Earlier this year, another leading crypto exchange – Binance – has launched its public blockchain Binance Chain and been expanding its ecosystem based on it. According to Leon Li, Huobi chooses to partner with the best public blockchain teams, instead of building the new chain behind closed doors.
Its partner Nervos Network, founded by a former researcher and developer at the Ethereum Foundation, is a low-profile blockchain startup yet with high reputation in China. In 2018, the company raised $28 million from big name investors including Polychain Capital, Sequoia China, etc.
It seems everyone in crypto has been talking about DeFi – the notion that crypto entrepreneurs can recreate traditional financial instruments in a decentralized architecture without companies' and governments' control. Big crypto enterprises especially exchanges are scrambling to seize this business opportunity based on their advantages and resources accumulated in the industry.
Apart from bring DeFi to the masses, Huobi is also continuing its global expansion plan, saying it will be moving aggressively into Turkey where 20% of the population hold cryptos.