The Huobi Buyback Program Launches To Protect Users Funds
After successfully launching their Huobi buyback program, the giant crypto exchange has pledged to buyback tokens on the open market with 20% of its revenue. Each season 20% of the tokens bought again by Huobi will be stored in their Huobi user protection fund to protect users’ interest and compensate for their losses in cases of emergency. All funds will be converted into USDT to avoid volatility.
Huobi has a total supply of 303 million Huobi tokens in circulation. 704,000 tokens were locked while 4,860,000 tokens locked for OTC merchants. 29 million tokens were bought back from voting revenue, and 15 million from partners. A total of 70 million tokens were bought back this season.
Because of the high revenue from the voting in the first quarter, the revenue of the secondary market buyback does not include the token voting revenue, but at the same time all the revenue of the voting in the quarter was included and locked positions of the Investor Protection Fund for the protection of investors in all kinds of emergencies. The revenue from the HADAX first round of voting are also included in the Investor Protection Fund, which so far has 38.3599 million HT. Super Node, Super Partner and OTC Merchant, security deposit of project team and so on, have a total locked amount of 32.0947 million HT. (Huobi)
Huobi is also introducing the security reserve fund.
A lot of hacks have happened in the year that cryptocurrencies went mainstream. Japanese exchange Coincheck saw $530 Million hacked in January and the all known Mt Gox hack where 740,000 Bitcoins (around $6 billion in today’s market) were stolen from the platform. Hackers are able to steal a vast amount of crypto in one hack because some exchanges store their funds in one private key. If that private key is stolen, all funds can be stolen. Many crypto exchange don’t offer any form of user protection, thus if a platform is hacked, you had to consider your funds lost. Huobi has found a solution to help in the event of a breach inside the platform.The Huobi Security Reserve will give its users a form of security due this initiative.
A total amount of 20,000 BTC will be stored in the security reserve. Tokens will be stored in an independent address and used as an emergency fund during an unlikely security breach. The Huobi security reserve will cover losses only related to from security breaches in full compensation. If an individual loses his private key or is at fault for the losses, the reserve fund will not compensate his losses.
Even though Huobi has had a clean record when it comes to security breaches, they decided to take precautions and measures to give its users a piece of mind and insure the hot wallet. So far Huobi has raised $300 million from its token launch. They are looking to expand globally after the current situation in China.
What other exchange do you know that offers some type of insurance to its users?
By Menajem Benchimol