On Mar. 26, the Singapore-based cryptocurrency exchange Huobi Global launched a new platform for pre-release token sales; a Direct Premium Offering (DPO) platform, as they’ve christened it.
It’s called Huobi Prime, but the "prime" feels like a misnomer: the platform is meant to provide ordinary customers with better access to cutting-edge crypto projects that are usually reserved for “the deep pocketed and well connected,” according to their Mar. 20th press release (here).
How does Huobi Prime compare to the Binance Launchpad and other IEO attempts? We sat down with Ross Zhang, Head of Marketing for Huobi Group, to ask the pertinent questions.
1. You've called Huobi Prime a Direct Premium Offering (DPO). This is a brand new term; is a DPO different from a common Initial Exchange Offering (IEO)? How so?
Yes, they’re different. An IEO is a way for a project to raise funds through an exchange, and they will normally charge the project a listing fee. Huobi Prime is not an IEO but a DPO; it does not charge projects listing fees, and its purpose is not to raise funds for them but to become more consumer focused, by giving regular investors easier access to premium projects at discount prices. It is similar to Huobi’s existing listing process with a number of key advantages, including:
2. A main selling point of Huobi Prime is that it lets regular people access prime products. “Access for both big and small players (…) open to personal users, not just professionals or VIPs” (in your blog post). Considering this:
There will be tiered price limits in 30 min rounds, and a limit on the amount a single customer can purchase ($1000); but, have you considered limits on how much can be purchased per round? To avoid a situation like that of Binance Launchpad, in which tokens ran out completely in a matter of seconds?
3. About that same point, will there be any measures taken to prevent a single person from opening multiple accounts and buying everything out?
There is a max. number of TOP available each round, and users are limited to trading a total of $1,000 worth of HT overall. In other words, the total token supply is 20,000,000,000 TOP.
Prime Trading Allocation in total: 1,500,000,000 TOP (7.5% of Total Token Supply)
Prime Trading Allocation in each “Price Limit” round is limited to: 300,000,000 TOP, 450,000,000 TOP, 750,000,000 TOP.
For results of the token launch, please refer to this: https://huobiglobal.zendesk.com/hc/en-us/articles/360000226462-Notice-on-Upcoming-Second-Trading-Project-Huobi-Prime-
4. You’ve said that, after this first sale coming up on March 26, there will be a requirement for Huobi Prime customers to have an average monthly holding of 500 or more Huobi Tokens (HT). At the current price, this means a brand new customer would need to spend USD $1270 just to be able to participate in the crypto sale. Would you consider lowering this bar for newcomers?
The average daily holding of 500 HT is, in our view, a fair middle ground - Huobi Prime will appeal to traders who have been trading with us for a while. Having this eligibility mechanism helps to ensure that only genuine users will participate.
5. What are the concrete requirements for customers to participate in the sale, other than the average monthly holding of 500 HT? Anything legal?
Users are required to have a Huobi Global account and participation is limited to jurisdictions where such activity is permissible.
6. Binance is still a bigger player than Huobi. Why should a customer choose to trade in HT and participate in your Prime sales?
Huobi has been around for half a decade – a long time in the crypto world – and has built up a stellar reputation for flexibility and liquidity, as well as safety and security. From the beginning, we’ve designed our exchange from the ground up with safety and security in mind. In addition to consistently ranking as one of the biggest exchanges in the world by trading volume through Huobi Global, we offer a broader range of trading methods and services to our users. This includes being able to use our OTC service as a fiat-to-crypto onramp, the ability to trade coin-to-coin on Huobi Global, the ability to trade on margin through our margin trading service, and the ability to trade crypto contracts through our Huobi DM service.
Huobi Global also has one of the most comprehensive ecosystems in blockchain, and is interoperable with our other services, such as Huobi Pool, our cryptocurrency mining arm, and Huobi Wallet. We make it easy to transfer assets and airdrops between them. In other words, we offer a fuller range of services on – or at least connected to – the same platform.
Huobi Token is Huobi’s native token and we will continue to increase the liquidity of the token. As of now, it can be used for a wide variety of purposes, including security deposits for Huobi OTC merchants, Huobi Cloud, and Global Elites, as well as Huobi NEXT. HT is also accepted as corporate payment by various incubators, mining pools, community service providers and more. Huobi expects to add a number of other applications over the course of 2019. Huobi Prime is another platform that Huobi Token users can benefit by trading tokens from premium projects that have yet to be listed on Huobi Global at a competitive price.
7. Is there a tentative date for the second sale?
Yes, please refer to this link: https://huobiglobal.zendesk.com/hc/en-us/articles/360000226462-Notice-on-Upcoming-Second-Trading-Project-Huobi-Prime-
8. Your blog post also says that “rigorous screening and selection processes (will take place) to ensure only premium projects that have yet to be listed on any major cryptocurrency exchange are included.” How does your selection process compare to Binance’s for their Launchpad? Do you consider yourselves more or less strict?
We use the SMART Chain model, plus, all projects selected for inclusion in Huobi Prime must possess the following:
In addition, the Huobi Prime team will weigh the following factors heavily:
We are still improving the project selection process and criteria. This will be further improved later on.
9. In a Reddit AMA, you answered some questions. Here’s a couple that didn’t get answered:
By user ansondin: do you plan to return some of the investment?
By user koloshmatit: will there be restriction from bots? What, if any, security measures will be implemented?
No comment on the first question.
For the 2nd question:
As a security feature, Huobi has a verification slider that users will have to use to complete their purchases. The slider is an anti-script and anti-bot safety mechanism and it is one of the standard methods we use to ensure trading is fair and equitable.
10. Have you determined the responsibilities, if any, that Huobi Global has towards its DPO customers? If any of the tokens sold turns out to be a scam, will you compensate for it in any way? If you cancel a sale before it happens, will you compensate for that in any way?
11. Why should a project choose to list on Huobi Prime and not on Binance’s Launchpad?
Because of Huobi’s ecosystem support, operations support from Huobi to ensure the success of the project. Project teams interested in listing through Huobi Prime can contact us here to find out more about our requirements: https://www.huobi.com/en-us/application-center/
12. How much do cryptocurrency and blockchain projects have to pay to be considered for your DPO?
No listing fees are required.
13. Are the application requirements for Huobi Prime the same as those specified for Huobi Main and/or Huobi Next? Will Huobi Prime have the same KYC requirements as Huobi Global? (The requirements are available here).
It’s the same. The eligibility rules are the same as Huobi Global.
14. Are there any countries whose citizens or residents are banned from participating?
Huobi Prime is only open to users from countries where digital asset trading is not forbidden. Full rules can be found here: https://huobiglobal.zendesk.com/hc/en-us/articles/360000226302-Detailed-Trading-Rules-for-TOP-Network-Huobi-Prime-at-March-26-2019
Huobi Prime requires no listing fees and boasts a rigorous screening process, though they do not disclose a concrete plan in case a project does turn out to be a fraud or any other mishap. Huobi Prime's first sale, which featured TOP Network's TOP token, successfully delivered 1.5 billion tokens on Mar. 26. Huobi has stated that 3764 people took part in the sale.
Their second token launch — there is still no information on what token will be sold — is scheduled for Apr. 16 (GMT+8). The HT holding requirement that did not apply for the TOP sale will apply on this second date. If you're interested in participating, remember that you must have an average daily holding of 500 HT between Mar. 17, at 00:00:00 and Apr. 15, at 23:59:5. Don't worry if you can't participate in this next one; more sales have already been planned.
Thanks for reading,
The Coin360 Editorial Team