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Crypto Exchange Huobi DeFi Blockchain in Public Beta Testing

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Decentralised finance, or DeFi (also called open finance), is a blanket term for financial services like borrowing, lending, and trading built using decentralised infrastructure, such as public blockchains and smart contracts.

By using decentralised technology like smart contracts, which you can think of as self-executing contracts made of computer code, DeFi allows for the elimination of middlemen. DeFi is among the fastest growing trends based on blockchain since late 2019.

Huobi, a Singapore-based cryptocurrency exchange announced that its proprietary network, Huobi Chain, had been successfully deployed on its testnet. Developed in collaboration with layer-1 protocol provider Nervos, the blockchain will be utilised for offering DeFi services, providing a framework for financial organisations to deploy such services and applications, including their own blockchains, tokenised assets, payments and identity verification, lending services, and decentralised exchanges.

“With Huobi Chain, we want to provide the decentralised framework that facilitates industry-wide collaboration, which is critical to the widespread adoption of DeFi,” said Ciara Sun, Huobi VP for global business.

According to the exchange, entities in the financial services sector, including banks, will be able to use Huobi Chain to develop DeFi applications that have anti-money laundering (AML) and know-your-customer (KYC) compliance. A Huobi spokesperson said the firm plans to engage talks with banks or other financial institutions once Huobi Chain has successfully passed the public beta phase.

Huobi Chain offers a flexible governance model based on a variation of the delegated proof-of-stake (DPoS) consensus algorithm. To provide verifiable decentralised digital identities on its network, the blockchain is utilising a decentralised identifier (DID) system, making cross-border compliance and regulation more easily achievable at scale. DID allows users to create identity profiles that can be accepted and verified by regulators in multiple jurisdictions.

Huobi Chain will support multiple cryptocurrencies such as bitcoin (BTC) and ether (ETH); However, the exchange’s native Huobi Token will be the protocol’s sole utility token. Support for other types of digital assets will be added over time according to a spokesperson.

Huobi Chain’s mainnet launch is expected to take place later this year.

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