What is hekuchin? Introducing the blockchain network of Hubei HECO exchange
If you operate in the cryptocurrency market, then probably the name Hubei Exchange (Huobi) is familiar to you. Hubei is a centralized exchange that has entered the decentralized world by launching a blockchain network called Hekuchain. The HECO network, like many third-generation blockchains, has a purpose Increased scalability has been launched. But what advantages does the Hekuchain blockchain network have over its competitors? Can we envision a bright future for this blockchain network?
In the rest of this article, stay with Valx to fully get to know Hekuchin and examine its future.
Blockchain HECO What is?
Hubei One exchange Chinese exchange has started its activity in the field of cryptocurrency trading since 2013 and has attracted many users, especially in East Asia. In 2020 and with the progress of the DeFi field, the demand of users to operate on the Ethereum platform increased significantly; But Ethereum was not responsive to this volume of demand and faced scalability problems. Subsequently, many blockchains were created that provided services with higher scalability by using new technologies. The centralized exchange Huobi also took advantage of this opportunity to launch the Hekuchain blockchain and enter the world of DeFi.
The HECO network is a blockchain that supports smart contracts and uses a hybrid consensus mechanism called HPoS (Hybrid Proof of Stake). This mechanism is a combination of PoS and PoA mechanisms, which increases scalability and improves network performance. Hekuchain places great emphasis on reducing energy consumption in transaction processing; This network has the ability to process 500 transactions per second (TPS) and create each block in an average time of 3 seconds (TTF).
Huobi has paid special attention to the user experience, so that the cost of making a simple transaction in this network is only about 0.0005 dollars and the transactions are finalized in the shortest possible time. Of course, in addition to users, Heko also gives special importance to developers. in such a way that with Ethereum virtual machine (EVM) is fully compatible and Ethereum developers can easily port their decentralized applications to the HECO platform. This issue can have a positive effect on the expansion of this blockchain ecosystem.
Investigating the performance of Hekochain in decentralization
Three factors of scalability, decentralization and security are very important in examining the performance of blockchains. The two factors of decentralization and security go hand in hand to some extent, but most blockchains sacrifice decentralization to increase scalability. It is very difficult to have good performance in scalability and decentralization at the same time.
The number of active nodes in the Hekochain blockchain network is limited to 21 units. According to the HECO mechanism, only 21 nodes can operate and validate in this network. If any of these nodes have bad behavior, they will be expelled from the network and replaced by another node. Compared to other decentralized networks such as Ethereum, 21 nodes are relatively small and it can be said that Hekuchain has not performed well in decentralizing the network.
Mechanism HECO DAO What is?
The HECO DAO mechanism is used in the selection of Hecochain nodes. The function of this mechanism is that a node must first submit a proposal to be launched in the blockchain network and this proposal will be voted on by the old nodes. If this proposal has more than 51% of votes, the node is approved and added to the list of approved nodes.
The Heko community can vote for any of the approved nodes by staking their assets; Each Heubi currency unit is equivalent to one vote. 21 units of the nodes that get the most votes are selected as active nodes, and the rest are placed in the list of possible nodes and in the waiting queue. The processing of the network is the responsibility of the active nodes, but if any of them performs incorrectly, it is removed from the list of active nodes, and the node with the highest vote among the possible nodes replaces it.
Users can withdraw their staked assets at any time (voting will be withdrawn, of course) but the assets will be locked for three days after withdrawal and then credited to the user’s wallet.
Communication between blockchains in HECO Chain
One of the current limitations of blockchains is the inability to communicate with each other. To solve this limitation, Hekuchain has created cross-chain bridges so that it can interact with other blockchains, including Bitcoin; In such a way that users can transfer their assets, for example, from the Bitcoin blockchain to Heko. Of course, this is done in the form of Rapid tokens; That is, the user locks his BTC in the Bitcoin blockchain and receives a token equivalent to Bitcoin in the Hacko blockchain network. The equivalent of Bitcoin in Heko is called HBTC or Huobi BTC and is used in the field of decentralized finance. At the time of writing this article, there are 38900 Bitcoin units in the HECO network.
Digital currency HT What is?
HT digital currency was launched in 2018 on the Ethereum blockchain platform. This token was created by Huobi exchange to advance its trading goals; Using this token, users covered transaction fees in this exchange and received discounts. With the launch of Hekuchain, this token was transferred to this chain as a local currency. HT token and all HECO platform tokens are created with HRC-20 standard.
HT currency is the native currency of Heko Blockchain and is used in voting, staking process and payment of network fees. Due to the high scalability of its blockchain, this cryptocurrency can also be used as a daily payment method. HT digital currency continues to be used as a tool to cover the fees of the Huobi exchange.
At the time of writing, HT digital currency can be traded at $5.17 on exchanges such as Hubei, Kocoin, MEXC and UniSwap. Most of the wallets that support the Ethereum network, including Metamask and TrustVault, also support Heco Blockchain in storing HT cryptocurrency and HRC-20 tokens.
A look at the ecosystem HECO CHAIN
Hekuchain supports smart contracts and is a platform for hosting decentralized applications (Dapps). At the time of writing this article, HECO hosts 48 decentralized applications and has formed its own ecosystem with them. Decentralized exchange MDEX is the most active platform in this ecosystem; Coinwind, Solo top, Beefy, etc. platforms are among the other active platforms in the HECO ecosystem.
Function HECO In the field of DiFi
Heko was launched in late 2020 and managed to attract high liquidity in just a short period of time. This blockchain had nearly three billion dollars of locked liquidity (TVL) in May 2021, and in this regard, it was ranked second after Ethereum with 2.8% dominance in the DeFi field. But after that, the network’s TVL started a downward trend and at the time of writing this article, it has reached only 44 million dollars. Heko has fallen to the 38th place in this regard and its dominance in the field of DeFi has reached less than 0.1%. The top platform of this blockchain (MDEX) has also performed similarly.
Most of the top projects in the HECO ecosystem (including MDEX) have also been launched on the Binance Smart Chain (BSC) platform. Therefore, it can be seen that one of the reasons for choosing this platform by developers is the support of a centralized and large exchange.
Examining the advantages and disadvantages of the Hekuchain blockchain
As a 3rd generation blockchain and supporting smart contracts, Hekuchain has many competitors. In the following, we will examine the advantages and disadvantages of this project so that you can more easily compare it with competitors and make a decision regarding its future.
Advantages of blockchain HECO
Huobi Exchange is one of the oldest cryptocurrency exchanges and has a high trading volume; The credibility and position of this exchange is considered the biggest advantage of HECO blockchain. Considering the volume of transactions and users it has, Huobi exchange can well introduce new projects to users of the cryptocurrency market; This issue can increase the interest of developers to develop their projects on this platform. This issue, along with the compatibility of HECO with Ethereum virtual machine, is a positive advantage to attract developers. This exchange is a large organization with a high budget; This issue can also help the marketing and advertising part of this project.
High scalability is another advantage of this blockchain project. The low cost and high speed of transaction approval can turn this blockchain into a daily payment system. In addition, the low cost of transactions can be the basis for attracting users to the platforms of this network.
Disadvantages of blockchain HECO
Hubei exchange, as it is considered an advantage for the Heko blockchain, can also be one of its disadvantages. Centralized exchanges have faced many challenges in the past few months, including bankruptcy (FTX exchange) and regulatory restrictions (Binance exchange). Since the HT cryptocurrency is widely used in the Heubi exchange, as a result, its price is also highly dependent on the conditions of this exchange. If there is a problem for this exchange, it will have a direct impact on the HT cryptocurrency, and then on the Heko blockchain and its entire ecosystem.
Another disadvantage of this exchange is its semi-centralized mechanism. The world of cryptocurrencies has been created with the goal of decentralization, and projects that do not pay attention to this issue are less likely to receive the attention of users and investors. The not very powerful ecosystem, relatively weak performance in the field of DeFi, and the lack of successful cooperation are other disadvantages of this blockchain project. will be (This comparison is relative and proportional to the performance of competitors of this project)
What is Hekuchin’s writing? Introducing the blockchain network of Hubei HECO exchange for the first time on Wallex blog. appeared.