Huobi.pro starts a new buyback program to protect liquidity and create a “User Protection Fund”.
On the 16th of April Huobi released Token Q1 Buyback Information, regarding the first ever buyback of Huobi Tokens (HT).
Huobi has pledged 20% of its revenues to buyback Huobi Tokens (HT) from the open market to be put into the “Huobi User Protection Fund”. Revenues from transaction fees are converted into USDT (as the closing price of March 31), while the related information are disclosed on a quarterly basis. The bought-back HTs will be used to protect users’ interests and compensate for their losses in cases of an emergency.
Since episodes of hacks on crypto exchanges increased along with the popularity and diffusion of cryptocurrencies and crypto-assets all over the world, the need to create security reserves with the aim of compensating users in the case of a security breach, has to be met. Investors protection is one key market differentiator on which exchanges should focus on and care about.
Also, on February 10 of 2018 Huobi.pro officially launched another user protection initiative called “Huobi Security Reserve”, providing a unique level of asset protection to its global users. The Reserve, owned by Huobi and stored in an independent cold wallet, amounts to 20.000 bitcoins (BTC) and is pledged to compensate in full its users in the case of a security breach (i.e. an hack such as the one happened to Coincheck, a Japan based exchange) or losses not caused by users themselves.
The Token Q1 Buyback Information report is also pretty unique because it provides numbers and details about the circulating supply of Huobi Tokens, which are not available on Coinmarketcap or others major providers. This is because HTs are relatively new and in existence only since January 2018.
According to Q1 report, the total supply in the market amounts to 303,129,300 HT of which 70,454,600 are locked up.
38.3599 million HT are locked in the Investor Protection Fund, the other 32.0947 million are owned by Super Nodes (HADAX), Super Partners and OTC Merchants. Therefore, the report states that the Current circulating supply (i.e. freely trading on Huobi.pro) amounts to 232,764,700 HT (Circulation = total amount in the market — total locked).
It will be interesting to see if others will follow Huobi’s example in establishing security mechanisms and protections for investors, both professional and retail.