10 Questions with Fred Episode Twenty-three | Huobi’s COO Robin Zhu Responds to Listing Policy, the High Rate of New Stock on First Day of Trading and the HADAX Crisis

10 Questions with Fred Episode Twenty-three | Huobi’s COO Robin Zhu Responds to Listing Policy, the High Rate of New Stock on First Day of Trading and the HADAX Crisis

Sept 27th 2018| Investment By:Sakura
From the point of view of the exchange, a good project may make the exchange bigger; while a bad one may destroy the exchange.

Time: At 22:00, July 6 (Beijing Time)

Group: Mars 3.0 wechat group


Robin Zhu: COO of Huobi Group, responsible for operation and management of the Group; ever served in Oracle and Capgemini Consulting; boasting rich experience in corporate management and data analysis as well as business operation and management. 

Fred Wang: Founder of Mars Finance, Chairman of Linekong (HK. 8267), founding partner of Geek Founders, and former senior vice president of Kingsoft.

The following is the sorted dialogue script. 

Fred Wang: Hi, everybody, good evening, and welcome to the 23rd Ten Questions with Fred Wang of Mars Finance sponsored by the YUE Blockchain. I would like to introduce today's guest: Robin Zhu, Huobi COO.

Let’s take a look at Robin’s experience at first: in 2007, graduated with the Master Degree from Hohai University and joined Oracle; in 2010, served as person in charge of projects of Capgemini Consulting (China) Co., Ltd.; worked in dozens of famous enterprises including Tencent, Sohu.com, Qunar.com, ifeng.com and China Resources; in 2015, joined Huobi and successively held such positions as CEO assistant, operation director and Chief Operation Officer. 

Recently, it is not so good for various traditional digital currency exchanges. Especially, Huobi has also somehow “internal heat”: after violent shock from “trading mining” exchanges represented by FCoin, Huobi was directly faced with the resistance of several blockchain VC claiming withdrawal due to changes in super node rules of HADAX last Friday. In fact, competition of new players or resistance from partners does not matter, since the focus of dispute is inseparable from one thing - coin listing.

What is the criterion for coin listing? Why is the coin listing fee so high? Why some good project cannot be listed? Why did it fall below issue price after coin listing? I believe that many people have similar questions about exchanges. As the market is constantly growing, the project owners and investors are becoming more reasonable. In the exchange scramble, they may make their own choice by “voting with feet” with respect to keeping staying in the circle or transferring to other camps. 

Today, I’m pleased to invite Robin Zhu to participate in this Ten Questions with Fred Wang of Mars Finance. Since Huobi is one of leading roles of recent “coin listing disturbance”. I hope that Robin can confront this disturbance and frankly tell us the story behind the disturbance, which may give us more calm and deep thinking. Next, let’s begin our Ten Questions with Fred Wang for today. 

Question 1

Fred Wang: I guess, you may not have thought that the introduction of rectification plan for Huobi HADAX have made a splash and caused such a huge disturbance. HADAX released a new rule on June 29, dividing the super node into two layers, i.e. standing node and preferred node; standing nodes mostly are conventional VC while preferred node mostly are Token fund. According to the new rule, if a project wants to be listed in HADAX, the support from a standing node is essential and the preferred node obviously lose the say in the voting stage for coin listing. Why do you divide the super node into two layers, i.e. standing node and preferred node? Will such handling make Token fund feel being discriminated? As Weixing Chen says, “We want to live in a new world rather than die in an old one.” Why do you prefer to the “order of the old society” of classic internet in determining the coin listing criteria?

Robin Zhu: It’s really a long story. Let me tell you the truth. As the test field of blockchain project, HADAX needs to introduce more start-up projects to enable investors to get the bonus from early investment in the project on one hand; on the other, an entrepreneurship project is really a narrow escape. In the fast-developing industry, we need to control all risks of the project. It is a pair of contradictions. Every day, we are always thinking and discussing how we can do better. Such an original intention has never changed. 

Since the voting for coin listing in HADAX started in March 2018, three rounds of voting, including 13 sessions of voting, have been conducted. From the initial bid ranking in the 1st session, to establishing the airdrop incentive, to introducing project deposit as the support for investors, to joining the super node selection mechanism, and to free voting to arouse the enthusiasm for community voting, several revisions of HADAX are made to select better projects for investors through community-based operation. 

However, we found in the execution that for some reasons, some behaviors of some super nodes are completely deviated from our original intention for establishing such super nodes. Especially, after INC incident, we also received information feedback from all parties in all dimensions and we were aware that the reform must be done for current execution rules. 

Therefore, we stopped the voting for coin listing. Instead, we start to control from the origin of the project by adopting the scheme of “standing node”. It is the first time that HADAX has applied the “sponsorship system” in conventional area to the blockchain area. 

In view of rapid development of current blockchain industry, a lot of excellent funds have emerged. However, because most of such funds have a short existence period, a longer observation in recommending projects is required. Hence, we want to make super node the sponsor and bind the brand of the sponsor with the development of the project as sponsored. In such case, we may evaluate the result of such super node more easily on one hand; on the other, we also force such super node to strictly review the projects that it has recommended and be liable for them. 

When we did the design, we hoped that the super nodes could do us a favor by selecting the recommended and premium projects, and keep following these projects to help their development. However, we found later that the relationship between some super nodes and project owners was not like this. So we consider adopting the sponsorship system. 

In fact, we want to make effort in this aspect by introducing conventional VC. Since early this year, we especially hope that conventional investment institutions can step into this industry. It does not mean that Token Fund is discriminated. We give them more chances and expect their participation because we hope that they can speed up the advancement of this industry. 

Actually, they are not competitors since the participation of conventional VCs will not undercut Token Fund. Instead, they may make the business greater together with such VCs and promote the implementation of something that could not be implemented initially within the industry. In view of excessive industry liquidity, people may think that entrepreneurship seems easy, and investment seems easy to earn money. There are a lot of people who lose their mind. 

Actually, entrepreneurship is a narrow escape. In one month, hundreds of projects may appear globally, which is rational originally. Entrepreneurs, investment institutions or ordinary investors finally may get hurt because of such irrationality. We don’t want to face this situation. After years’ development, conventional VCs have their own investment logic and investment methodology. Such accumulation will bring new concepts and rules to current blockchain industry. That’s why we especially introduce conventional VCs. 

Fred Wang: I notice that Node Capital has expressed its intention to give up the cooperation with Huobi HADAX but cooperated with such exchanges as FCoin in free coin listing, indicating “the aggression and dictation of an exchange has gone for good”. Jun Du, boss of Node Capital, provided the picture of “flipping the bird” in his WeChat Moments, and even used such words as “Fuck”. 

Obviously, Jun Du, Dong Zhao and others are greatly discontented with the new policy. As COO of Huobi who is directly responsible for the coin listing business of the Group, you may face a great pressure internally and externally. Is this the biggest crisis management for Department of Coin listing of Huobi? Is the adjustment made by Huobi caused by the aggressive mental state of the coin listing party? Since such a sensational event occurred during the vacation of Leon Li, how do you communicate with him? 

Robin Zhu: Firstly, as for the change in HADAX’s super node rules, we didn’t communicate and synchronize with super nodes in advance, thereby affecting all of you. It’s our fault. I would like to take this opportunity to apologize to all partners and teams of each super node, and we will establish a communication mechanism later. 

In the past week, I personally arranged the appointment with many partners of super nodes. We talked much. Maybe there are some I have not met. I will continue to do so next week. In my opinion, sufficient communication can eliminate previous misunderstanding. 

Helping the user select high-quality projects for investment is the common goal of super nodes and us, which is highly consistent between us.

I have a good relationship with Jun Du, co-founder of Huobi at early stage; on the second day following the event, I met with Dong Zhao, one of regular clients of Huobi, and talked about it with him. I found people, including super node partners whom I had met with, could understand it. They all hoped that they could move on together with me. I was appreciated for that. 

It’s so lucky for us to have so many partners who can understand us on the way to explore unknown. So I don’t think it is a crisis. Instead, I think it is an opportunity that enables me to better understand the implication of super node and allows us to do more things. 

Recently, we are busily preparing HADAX 2.0. We want to build a brand-new HADAX for both industry and users through further innovation. Actually, Leon Li’s vacation does not affect us too much. Even if during his vacation, we still kept close communication with him. So, he was clear about the event and its handling process, and all of us have seen his WeChat Moments. 

Fred Wang: Statistics show that HADAX has made adjustments to its rules for 4 times since its launch. Why can’t it offer a solution satisfactory to all parties to date? In his latest statement, Leon Li said that HADAX must be overturned. A major upgrade will be made in July. I wonder whether you will solicit comments in a greater range. 

Dovey Wan from Danhua Capital proposes the “Reverse voting mechanism” not long ago: not only those which got more votes can be selected, but also they cannot be selected; because the cost required to make you included in Top 10 is far lower than that required to exceed others, and such mechanism may play a role of reporting any fraud. I wonder whether you have ever considered Dovey’s solution is feasible, or is there any better solution?

Robin Zhu: Following the launch of HADAX, our discussion regarding the rules has never stopped. As an old saying goes, where there is a rule, there is a countermeasure. There is no perfect system or perfect rule. Continuous optimization must be made in actual operation, which may be the charm of community-based operation and also an issue to be solved for community-based operation. 

Negative information regarding Huobi this year almost comes from HADAX. Someone said that it is a difficult problem that we put forward for ourselves and why we do that? Huobi Pro is properly operated, and other business units are also developing well, including site, pool, wallet and ecology for each country, etc. For HADAX, we do this thing with an aspiration of community-based operation in our mind. 

In our opinion, building business ecology through community is one of major development directions for the future of blockchain. In view of existence of Token economy and incentive, community decision-making will be required for more and more things and effective incentive may make decision-making more reasonable. Therefore, we must learn how to realize community-based operation. Our team is trying, so is the community. For all of us, it is the first time to attempt community-based operation. Now that we choose innovation, we should be willing to endure it. 

We hope that we can offer you a better rule through continuous optimization. When we met many super nodes this week, we also solicited their comments. In the first session, I have talked with Dovey about her solution. We have deduced those with affirmative votes and those with dissenting votes inside our company. During actual operation, there may be many projects which get the same number of votes. 

Actually, we have ever proposed some funny ideas, such as “coin listing through weekly report” which offers a platform, on which a project owner may update the project progress in real-time manner, including weekly report, roadshow video, live project progress, company staffing and financial condition, etc. Only those that have been updated for 8 weeks and longer can be qualified for voting. In such case, everyone knows the progress of the team; super nodes and HT holders may give likes or dislikes, and the project with likes ranking top can be qualified for coin listing. We also racked our brain every day for similar fun solutions. If you have any good idea, please inform us of it.

Question 2

Fred Wang: Different from Huobi Pro involving coin listing review mechanism launched in last July, HADAX is a whole-new sub-brand that Huobi launched on February 12, 2018, and is positioned as Autonomous Digital Asset Exchange with the greatest feature of coin listing free from coin listing fee. By July 5, 40 coins totally have been listed in HADAX, 31 of which have fallen below the issue price, resulting in a rate of falling below issue price up to 78%. Someone even said that HADAX had become the home to trash projects. Media reported that canvassing and vote buying were seen among HADAX project owners. So, can the current rule of HADAX work smoothly?

Robin Zhu: Actually, the fact that a project falls below issue price is caused by several factors, including poor overall situation, overvaluation of the project and unsmooth project progress. Since the beginning of this year, the price of each backbone asset of Bitcoin and Ethereum has fallen by about 60%, resulting in insufficient market confidence. In case of bull market, the market often gives a high valuation; while in case of market slump, the valuation may fall along with it. Such case is common in the financial market. 

In addition, an opinion in the market is actually a misunderstanding since a project going up is not certainly a premium one and a project going down is certainly a trash one. Fluctuation of short-term price cannot be used as the judgment index for a project. With the implementation and promotion of various projects, the premium project will be popular in the market. Maybe long-term fluctuation can better reflect the quality of the project. 

Hence, HADAX will take measures later to allow project owners to conduct the roadshow and update the project status on the platform, just like “coin listing through weekly report” I said just now. In such case, the performance of each project will be evident. 

As for vote buying, we have announced in the latest scheme that we will crack down offline voting fraud. In the meantime, we will also process any report about it. Once any offline vote buying is found, we will disqualify its listing. In subsequent rule implementation, we will also crack down any non-transparent phenomenon. 

Fred Wang: In early June, HADAX released its trial scheme regarding transfer to Huobi Pro. According to the scheme, if a coin wants to transfer from HADAX to Huobi Pro, the project coin needs to meet the requirements in terms of average turnover, persons involving in trading, and rating model before being listed in the main site with voting cycle changed to once every two months. “To put it plainly, it needs rising coin price and sufficient market trading depth.” Some project owner sighed, “It is very difficult to find way out unless you make investment.” It has been nearly one month following the release of board transfer scheme, but there seems no project transferring from HADAX to Huobi Pro. 

Can the project owner succeed in board transfer only through investment? Will it be difficult to be implemented for the board transfer scheme being a “pie in the sky”? What can board transfer bring to the project owner? I’m afraid that board transfer cannot offer sufficient incentive to the project owner. 

Robin Zhu: Eh, no project has made board transfer yet because we found through assessment that the project has not met the conditions for board transfer at the time node. Projects in Huobi Pro are positioned as material ones while projects of HADAX are positioned as startup ones. Number of trading persons or turnover is an important indicator that may reflect whether the project has developed into certain stage, and whether it can satisfy SMARTChain, a quantification assessment model for Huobi blockchain assets, is also an assessment of development direction and fundamentals of a project. 

Besides, the project owner can only create a bigger trading volume through investment, which is a misunderstanding. Performance of trading market may vary along with the development of the project. Enhancing the confidence of investors in holding coin by providing information regarding project development to the community and empowering one’s own Token through enriched application scenarios may result in better market performance. It possibly needs money, but such money may be spent in different aspects. 

Dong Zhao (founder of DFund): I think HADAX has made a meaning attempt, but it is basically a failure. What do you think about it? 

Robin Zhu: Haha, I like putting it reversely. Though it is difficult and may be encountered with some failures, we are going to make meaningful attempts. 

Fred Wang: The exchange adopts the mechanism of board-based operation and allows some project to transfer from one board to another in certain conditions. It is not a unique mode for coin circle. Instead, a mature mechanism may be referenced in the conventional financial market. Let’s take China as example. Anyone may invest in shares listed in A-share exchange. However, in National Equities Exchange and Quotations (NEEQ), only qualified investors (who have securities assets of at least RMB 5 million) can participate in the trading. Board-based operation has the most important objective which is to protect investors’ interests since investors with more capital may have higher capability of enduring risks and may be better encountered with high-risk investment subjects. 

HADAX and Huobi Pro currently only distinguish projects, but don’t set any threshold for investors. How do Huobi consider about it? Since any investor may trade in HADAX and Huobi Pro with a single account, is it necessary to release different coins in different boards? For users which require trading, what differences are there between HADAX and Huobi Pro? 

Robin Zhu: In its early establishment, HADAX considered user layering and we set the entry threshold for investors. According to our decision, only investors with assets of 1BTC or users who had ever traded for more than 30 days might trade in HADAX. We set the threshold for investors with a view to allowing people to know that projects in HADAX, compared with those in Huobi Pro, had greater fluctuation and risks, thereby reminding investors of such risks. 

After the threshold was implemented, we basically achieved our goal: users had clear knowledge with respect to the differences between Huobi Pro and HADAX. Therefore, we cancelled such entry threshold for investors. Based on data statistics, there was no big data difference before and after cancellation. 

Therefore, the focus is not board differentiation, but community-based operation. In the future, HADAX will still be the pilot field of blockchain projects and realize the recommendation and screening of projects through community-based operation. As Dong Zhao says, it may fail, but we are driven by our dream to make attempts.

Question 3

Fred Wang: Recently, major exchanges are responding to the challenge from emerging FCoin. On June 19, OKEx officially announced the open win-win program to support 100 exchanges adopting “trans-fee mining” model. Soon, Binance also launched “Digital Asset Exchange Open Alliance Program” and indicated that it would increase the number of exchanges adopting “trans-fee mining” model as support to 1,000. Two of three major exchanges have been forced to move, but Huobi seemed be quiet without any move. Three days later, Huobi announced that it would upgrade HT from “Huobi Global Universal Bonus Point” to “Huobi Global Ecological Token” and released its specific measures. 

In my opinion, FT is the share dividend of the exchange, while HT is the ecological dividend of the exchange. Both models are different, so what do you think about Huobi’s chance of success? Will Huobi imitate the “trans-fee mining” model in the future?

Robin Zhu: For the “trans-fee mining” model, many people may think Huobi keeps silent. In fact, we have already conducted many rounds of live discussion. We also have the research report for the purpose of tracking various types of data of the exchanges adopting the trans-fee mining model. 

Undoubtedly, the trans-fee mining model is an innovative model in Token economics. FCoin itself is also changing in a rapid and drastic manner. It is difficult to determine whether Huobi will imitate FCoin in the future, but we will keep eyes on it. In our opinion, the exchange does have its own essence, and has the mission of satisfying users’ appeals no matter what it does. 

Our established strategy for this year is to build industrial ecology. We think that properly building industrial ecology, setting up global communities with exchanges as the core, and extending through ecological organizations may have more profound implication to the industry and also lay a good foundation for our subsequent public chain strategy. Therefore, we keep doing so. Jian Zhang is former employee of Huobi, and we did get along with him. If FCoin achieves its growth, we will give our blessing since it is lucky to make innovation and create a bigger market together with him in the market. 

Fred Wang: In the world of internet, competition often relies on continuous financing to subsidize the user until your opponents are destroyed and you become the winner to monopolize the market, thus ending the battle thoroughly. WeChat, Didi and JD.com are beneficiaries of the hand-to-hand combat for network competition. Since FCoin become popular, there have been a lot of imitators of trading-mining exchanges, but subsequent players seldom go beyond it. Someone thinks that there will be a strong lead finally for trading-mining exchanges like social media, sharing economy and e-commerce. Now, it seems that FCoin is running so fast. Just now, Dong Zhao asked me whether it should be a strong lead or letting a hundred flowers bloom. As a peer, do you think it is time to grant the market affirmation to FCoin finally?

Robin Zhu: The pattern of the industry remains unsettled yet and changes very fast. In the past year, many exchanges took the first place in terms of global trading volume and the competition is very cruel. In the future, there will definitely be a process of “letting a hundred flowers bloom” while innovation of trading mining may be just begin followed by numerous “XX is mining” later. Innovation has not stopped, so it is too late to think that there is a strong lead in the market.

Fred Wang: Jian Zhang, founder of FCoin, is also your former colleague in Huobi. I think Jian Zhang does well in entrepreneurship. I think people like Jian Zhang and Changpeng Zhao have become the entrepreneurship examples for senior technical management of current exchanges. Will they result in a wave of continuous resignation and entrepreneurship in the technical team of every exchange? Does Huobi impose any non-competition restriction on senior management?

Robin Zhu: We do sign non-compete agreement with our employees and senior management. Jian Zhang resigned in 2016 and run a blockchain technology company for more than one year. He didn’t compete with Huobi’s business. Recently, he founded FCoin, but now the non-compete period has expired. 

The culture and values of an enterprise is an important magic key for talent retention. As along as employees’ goals are consistent with the values and goals of the company, they will not leave. If employees’ goals are not consistent with the values and goals of the company, they have the reason to leave. Many employees of Huobi have the trace of Huobi even if they have left Huobi. We always adopt integrity and rigorousness, opening up and innovation, cooperation and aggression as the core values of Huobi, and take the behavior bottom line of “Do not be evil”. This is what I’m proud of and an important intrinsic factor for us to attract many talents. 

Fred Wang: In the evening of July 5, FCoin released a statement, indicating that it will launch the main board C “currency reform” pilot area, thereby supporting the token reconstruction of conventional enterprises. To put it simply, “currency reform” is conventional/internet enterprise+token, i.e. “blockchainization” of conventional/internet enterprise. The person who puts forward the idea of “currency reform” today should correspond to “internetization” of conventional enterprise several years ago. FCoin is relying on the token economics model to stimulate the giant increment market of internet and traditional industry and compete for quality potential projects. I believe it is the big cake of the future. What does Huobi think about this market?

Robin Zhu: As for “currency reform”, we actually started doing this thing very early. We call it “blockchain+”, maybe a different name, which helps conventional enterprises and internet companies implement “blockchain+”. In March, we signed a cooperation agreement with Tianya.cn, which is only a beginning. “Blockchain+” consists of two aspects. One is to solve problems with blockchain technology and the other is to solve problems with Token economics model. 

In the first half of 2018, I also discussed with a lot of conventional enterprises and internet companies with respect to how to design a token model to solve their existing pain points. Competition actually does not lie in the trading market, but in the incubator and the academy. 

Design of token economics model is a complicated science. Having read hundreds of white papers, I understand that Token design plays a decisive role in a project. In this aspect, I think we have advantages. Huobi Blockchain Research has many excellent teams which may produce industrial reports and other reports including big data analysis and in-depth research on the weekly basis. Such reports are well received in the market and translated into other languages globally, and attract a great deal of attention in global market. 

Fred Wang: I notice the HT-centered ecological layout of Huobi, mainly covering the upstream, midstream and downstream of blockchain industry chain including pool, node and project, which seems to attach more emphasis on the connection of resources within the blockchain industry; however, FCoin goes beyond the blockchain industry and seems to attach more emphasis on the connection between entity economy and blockchain. Two kinds of connection and integration are different, so who will win finally? Someone says that digital currency reform with token model as the core may result in a social wave of token economics. Are you optimistic about the development prospective of token economics? 

Robin Zhu: As mentioned earlier, the core competitiveness of “blockchain+” in conventional enterprises does not lie in trading, but in the design of Token economics model. I am very optimistic about the development prospective of token economics, which is an important area. An excellent token model may make the application bigger. The most classic is Bitcoin. When I discussed the projects with Huobi Blockchain Research, an important indicator is that Token must make the project bigger. That’s why blockchain bring endless imagination to the world. 

Question 4

Fred Wang: In the afternoon of June 9, in some coin wechat groups, five major project owners including INC Huobi.com claimed that it smashed the market without bottom line. According to chatting records as leaked, responsible persons of several major projects questioned that Huobi established multiple data accounts within the platform, modified and sold off trading data of each coin, recovered each coin after lowering its price to the lowest, and finally liquidate them at zero cost. According to the responsible person of INC project, Huobi’s operation gave it away because INC adopted the mechanism of locked position for its coin and no single user can reach a release volume of two million. Though the event ends finally with INC making a public statement to apologize to investors and Huobi, there are a lot of doubtful points: Did Huobi do an inside job in reshuffling the project owner by modifying trading data? Is there any connection between significant drop of coin price of such project as INC and the project itself? Do you want to make it right by giving additional explanations? 

Robin Zhu: First, we don’t have any motive to reshuffle the project owner. Once the project owner goes wrong, we have to spend our time and energy to solve it together with the project owner. 

Second, we don’t have any impetus to reshuffle the project owner, either. We have no need to do so since the trading commission is enough to maintain the team and develop the enterprise. 

Upon occurrence of the event, we immediately retrieved and analyzed the trading records of the project. The fact is the single user mentioned by the project owner has many sell orders, which are not one-off sell orders but accumulated ones. In the trading market, there are a lot of API strategy trading users which make profit by frequent ‘buy low, sell high’ through the grid. There may be a great number of accumulated buy orders and accumulated sell orders, but net buy or net sell is not great. Therefore, these misunderstandings have been clearly explained by both parties later. 

Mei Luo (Associate Professor with Tsinghua University): What do you think about the anecdote “The exchange is a big banker”? We cannot see the address of exchange wallet, so we cannot know whether the exchange has embezzled the coin in the account of an ordinary user. 

Robin Zhu: The exchange wallet system is an important system. For the purpose of risk control, the wallet is generally divided into cold wallet and hot wallet. The address of the user for topping up is the address in the hot wallet. Once the user finishes topping up, the wallet system will be sweep the fund topped up by the user to the withdrawal address for the user to withdraw; if the fund is huge, it will be swept to the address of cold wallet. 

Fred Wang: The relationship between the exchange and the project is very subtle: in case of bull market, currency listing may produce profit and all parties achieve win-win; in case of bear market, even a flamingo will turn into a chicken, which means the project will seem nothing special. Many projects will, once listed in the exchange, be reshuffled. Following suffering ups and downs in the currency market, what do you think about the cooperation between the exchange and the project? Many projects are queuing for currency listing, which is a proven fact. However, I want to ask you whether you or your team will compete for initial offering projects. Haha.

Robin Zhu: From the point of view of the exchange, a good project may make the exchange bigger; while a bad one may destroy the exchange. So, we will compete for good initial offering projects. 

From the point of view of the project owner, a good exchange may make a project succeed; a bad exchange may drag down a project. So, we also try our best to provide the project owner with better service and assistance. 

Based on above, the exchange and the project owner are complementary and win-win. We hope that we can make every project succeed and enable the value and circulation of their Token can be embodied completely. 

Fred Wang: In the Ten Questions with Changpeng Zhao (CZ) from Binance last week, “In our application form for currency listing, there is a field that requires you to give a price, including zero. We will review such information completely. If you think your project is especially amazing, you can fill in the field with Zero.” Though CZ’s reply is really shrewd, it means that Binance offers opportunities for free currency listing, and I know someone has got such opportunity. Does Huobi offer any free currency listing project?

Robin Zhu: Of course, we do. From the third-phase planning, HADAX offers free currency listing. HADAX Pro initially had some projects which were listed for free. In addition, there are many projects of which expenses are funded by the project owner, mainly including expenses used to carry out campaigns together with Huobi, also including some operation activities or market promotion and marketing activities. 

Question 5

Fred Wang: There is a question I always want to ask Leon Li, i.e. why does he try to build a large and all-round company? You are also dealing with public blockchain ostentatiously. How about we talk about it here? On June 6, Huobi announced in Singapore that it will mobilize community force to build a public blockchain Huobi Chain; the originally Ethereum-based general bonus, Huobi Token (HT) will become the Huobi Chain-based token. A person in charge of public blockchain project told me that such companies as Bitmain have never consider making public blockchain. Why does Huobi itself make public blockchain? Why do you use existing resources and technologies in the industry? I associate it with Binance which, in launching Binance Chain, indicated that its aim is to build a whole-new decentralized exchange; now, does Huobi have the same motive to build public blockchain?

Robin Zhu: To build the public blockchain, Huobi has three motives: the first one is belief. We think that current form of trading platform is the primary form of financial asset trading, and may be evolved into a distributed system in the future. As one of the most forces in blockchain industry, Huobi has sufficient reasons to believe in it and is willing to make exploration in this direction. 

Secondly, Huobi has an ambitious planning layout: platform-ecology-public blockchain. This is 2.0 era for ecological development of Huobi. Some time ago, we released an announcement, indicating that HT was upgraded to global ecological token from general bonus, and opened HADAX ecological area. In the future, Token of Huobi ecological partners will have the opportunity to become a HT-based ecological sub-token to receive the dividend of Huobi development. That’s why we build it by ourselves, and it may result in higher ecological engagement. Huobi Chain is definitely not a decentralized exchange, or decentralized trading is not a function of the public blockchain and Huobi Chain is a self-finance public blockchain. 

Thirdly, we want to build a really excellent public chain. We hope that it is a next generation of self-finance public blockchain that really represents the highest standard in global industry. In the future, generation, circulation, notarization and confirmation of all assets and warrants will be conducted in the public blockchain, thereby guaranteeing security, performance, regulation and scalability. 

Fred Wang: According to Yuming Yuan, President of Huobi Blockchain Research, there is a widely recognized and ready-to-use public blockchain in the industry to date. Hence, everything is possible. However, developing a public blockchain is far more difficult than as you imagine with TPS, scalability and security encountered with great challenges. To build the public blockchain, are you ready to deal with various difficulties? It is a lengthy and hard process from R&D to mainnet launch, but it is impossible without an absolute life of the party. Of course, you have money. But, if someday, I mean if, Huobi fails in the exchange competition, will Huobi Chain continue?

Robin Zhu: An exchange is one of cores in the ecology. If you don’t prevail in the exchange competition, the public blockchain as built may be less influential by one order; on the other, the development of public blockchain may feed back to the exchange and provide it with quality assets. Therefore, we will continuously try to facilitate the building of Huobi Chain while maintaining the competitive advantages we’ve established in the trading area. 

Currently, Huobi has started 2.0 era of ecological building. We are not fighting alone. Within Huobi, dozens of departments work together to promote ecological development; outside Huobi, we allocate 30 million HTs to solicit excellent public chain leaders. By doing so, we can gather excellent technical talent and technical forces throughout the world for mutual exchange and collision. With double support of ecology+technology, we believe we can find the most powerful leader team to build a truly quality public blockchain. After all, technology and ecology are essential for a really successful public blockchain. Huobi public blockchain needs the support of all of you. More talented people are welcome to join us and run for the leader of Huobi public blockchain. 

Question 6

Fred Wang: A ferocious battle of EOS super node is in progress. At present, more than 120 project teams participated in the campaign globally. Established in March 2018, Huobi pool announced its campaign for EOS super node in early May. Why did Huobi campaign for EOS super node? Why does Huobi participate in the campaign for EOS super node? According to the latest ranking information as of July 5, Huobi pool took the 13th place among all super nodes with 54019935 votes. Is current result desirable? 

Robin Zhu: EOS super node is a great attempt in DPoS and also a very, very important node event in the development history of digital currency. Besides, it is also a great attempt of community autonomy and the first global voting in the history of human. 

Huobi participated in the campaign for EOS super nodes for the following reasons. On one hand, we hope that through our effort, more and more people can join us to promote the development of EOS ecology and get involved in some blockchain community to contribute to the community; on the other, it may also accumulate related experience for the establishment and promotion of our own public blockchain. Since EOS is representative, maybe we have the same way to go. 

As for why the pool participates in the campaign, we, following internal communication, think that EOS super node is essentially a DPoS mining act, so Huobi pool’s participation is most suitable. In the ranking of super nodes, we were the first place last week, and now are in Top 10. Competitive ranking of super nodes is changing over time. The campaign for super nodes is not a pure ranking game. Instead, it fluctuates greatly. It is a protracted war and also a game in which all super nodes compete and cooperate with each other. 

Fred Wang: Yes. I noticed that in the Huobi EOS Global Super Nodes Show on May 14, Huobi Pool announced Huobi EOS Super Community was formally launched. Upon the launch, a lot of global EOS nodes applied for settling down in EOS Super Community, including many domestic and foreign nodes such as EOSAsia, EOSUnion, HelloEOS, EOS Gravity, EOSCANADA and Eosio.SG. Interestingly, in the context of ferocious competition of EOS super nodes, why does Huobi “set up a stage” for other node competitors?

Robin Zhu: In fact, when we set our own goal, we didn’t position “elected super node” as our own goal. Our campaign goal is to become the earliest EOS super node and help the development of EOS ecology. 

We did there things: establishing the super community, establishing EOSDAPP special fund and creating a trading area for EOS ecology. EOS nodes are not only competitive, but also cooperative and co-built. That’s our understanding of EOS community operation. The ultimate goal of all nodes is co-building while the campaign aims to select the most helpful for co-building. That is to say, the campaign aims to achieve the goal of win-win. In fact, it is essentially cooperative. 

Therefore, we build EOS Super Community with a view to combining the power of all communities to realize more integrated information and more efficient cooperation through the super community platform. 

Question 7

Fred Wang: Media reported that People’s Bank of China recently took a series of specific cleanup and banning measures together with related departments with a view to preventing and eliminating any possible financial risks and ethical risks. Specific measures include: organizing the blocking of “going-abroad” virtual currency trading platform; as of May 2018, 110 websites (including such trading platforms as Huobi and Binance) have been blocked. What kind of regulatory signals do you think these measures convey from national regulatory departments? As Huobi is one of the institutions involved in this cleaning action, how are you affected? To what extent?

Robin Zhu: We have not received any notice. Huobi is developing globally. We comply with laws of every country where we develop, maintain close communication with the regulatory authority of each country, and make appropriate adjustments as per the requirements of each regulatory authority. We hope that we can become a globally compliant blockchain service enterprise. 

Fred Wang: On April 30, Huobi announced that it will establish Huobi China Headquarters in Hainan. Huobi China will formally relocate to Hainan, initiate a global blockchain industry fund of USD 1 billion, and build 10 global blockchain+ labs, one global top blockchain research academy and one 40,000m2 blockchain incubator. Someone disclosed in Weibo that Huobi spent RMB 100 million in buying a building. To my knowledge, governments in Zhejiang, Chongqing and Hebei, etc are actively promoting the development of blockchain industry, and promulgating various policies successively to support the settle-in of blockchain enterprises. Why do you finally choose Hainan as the location of Huobi China Headquarters? Talent environment of Hainan is totally different from that of Hangzhou where also attaches emphasis on the opportunities for blockchain industry. 

Robin Zhu: The competent department has pointed out a new direction for the development of Hainan, and the development opportunity of Hainan Free Trade Zone also brings endless possibilities for the implementation and development of blockchain industry. We are always growing in an orderly manner by complying national laws and regulations. Hainan pattern aims to respond to the call of central government. We hope that we can contribute our technical power for the development of Hainan Free Trade Zone. 

We do have our own building in Hainan. Upon completion, we will invite all partners and friends to visit us.

Fred Wang: When Huobi China relocated to China, Chinese government released the Guidance regarding supporting the all-round deepening reform and opening up in Hainan with a view to promoting the deepening of reform and opening up in Hainan and building the free trade port. Rumors said that Hainan may have “great moves” with respect to blockchain and digital currency. Charles Xue recently indicated in a public forum that “Hainan might become the special economic zone for blockchain in Mainland China”. However, Hainan seems not clear and specific moves. Is it the speculation of the industry?

Robin Zhu: As for the planning of industry park and fund layout, we think that blockchain technology must have the scenarios for its implementation and application with improved infrastructure including public blockchain. During this process, Huobi hope to make its own contribution. In the meantime, we are also keeping learning, accumulating our experience and implementing the ecological planning during the development process. 

Question 8

Fred Wang: Next, we will talk about people and management culture. As for Huobi culture, maybe you are the most qualified to talk about it. Largely, a company’s culture gene comes from its founder(s) while you are the one who is closest to and most familiar with CEO Leon Li in Huobi. Before joining Huobi, you were colleagues in Oracle. You have been working for Huobi for more than 4 years, a long time in the world of blockchain. Compared with your previous working environment, what is the biggest different of blockchain environment with respect to culture?

Robin Zhu: Haha. You must have heard a saying, “One day in the chain circle equals one year in the real world”, which means “fast”! A person really working in this industry may experience the variation and follow-up of every day, every hour, every minute and every second, and feel that blockchain+WeMedia speeds up the velocity of earth rotation and revolution. 

Therefore, since stepping into this industry, we have been receiving various types of information almost round the clock and respond to a great deal of information immediately. I often talk to my partners that working in this industry for one year means working in other industry for 3-5 years. It is really cost-effective in accumulating working experience. 

Fred Wang: Many people say that Leon Li is a loyal person. Especially, when Jun Du was involved in a dispute, Leon Li spoke out for him; this time, Jun Du withdrew HADAX node publicly in extremely strong language, Leon Li didn’t say anything. I heard that Leon Li always safeguarded all people leaving Huobi, and was ready to be their angle investor. How do you get along with each other usually? In your opinion, what is Leon Li’s behavior pattern?

Leon Li is loyal to his brothers and friends and treats colleagues well. Interestingly, when Leon Li and I worked in Oracle, we established our friendship through table tennis. Later, I have been focusing on his entrepreneurship projects until I join Huobi. 

The trust between Leon Li and me allows for direct dialogue between us. As I often talk to my team, trust does not mean you assign a job to those who you believe can do it properly, but means you tell him all true ideas you have for him and does not need to worry any bad idea that he may have for you. Such trust can build the most effective communication culture, and we are always practicing such culture. 

The impression Leon Li makes on many people is that he is a person with integrity, sentiment and responsibility. All of these characteristics are very important in this blundering industry. With these characteristics, he can stick to his mission, affect his team, and try to change the world with his team. When he does anything wrong, he dares to assume the responsibility and then move on. Besides, Leon Li often derides himself that “he has been specializing in helping seedlings to grow by pulling them up for 30 years”. As for team building, he also has his own idea. He dares to make assignments to appropriate persons and is ready to trust others while providing opportunities and guidance to allow all people to assume responsibilities and achieve the growth. 

 I don’t know the fact that some departments of Huobi were blamed by node institutions for “bureaucratic style” due to lack of necessary communication when HADAX changed the rules for super nodes. But such departments do not include yours. The response that Leon Li gives is that a person may become “bureaucratic” once he/she has any power without regulation, “which is the humanity”. Is there any certain “vacuum zone” in Huobi with respect to internal management system and process that has resulted in the issue regarding lack of regulation? I heard that Leon Li ever asked for a long leave due to his physical condition, but the company became better. Haha. I don’t know whether there is an issue regarding excessive delegation of power in view of his style of treating people and doing things. 

Robin Zhu: Haha. Huobi now has 1100 employees, increased from about 200 in last November. Such a rapid development has had the pressure and responsibility on all employees, including all managers, from senior management to grassroots management, a couple of times, and also forced all employees to grow a lot.

Huobi is not a pure exchange anymore. Currently, Huobi Group consists of 18 business divisions, many of which are newly established, have new employees and businesses. In addition, management system and process are also continuously built along with business development. 

In its rapid expansion, a startup company may always be encountered with various problems, so we, as the management, are here to solve these problems. Neither “bureaucratic” nor “humanity” is what we don’t to see. We have a firm determination to solve these problems. We undertake to try our best to remove any inappropriate member from our team, optimize the process which contains anything unreasonable, foster a quality team and provide customers with better service. 

Though Leon Li took some leaves for his personal reason, the development of Huobi has not been affected, the team expansion allows us to do our own jobs. In addition, with clear authority system of the company, we may take appropriate punishment measures against any error or accident in our work. 

Fred Wang: I noticed that among several enterprises originated from head exchanges, Huobi has the greatest number of employees. Until the dialogue with you today, I have not known that Huobi Group has more than 1,000 employees and 18 business divisions. It develops so fast, do you want market share or scale? In my opinion, blockchain business didn’t begin to develop until last year. However, Huobi operates such forms as pool, exchange, information and public blockchain with extensive business scope and strong specialized independence in each business line. Since you have stepped into so many areas too early, don’t you worry that the company is too big but not strong? 

Robin Zhu: Actually, Huobi implemented full industry chain strategy in 2014 when it had just more than 100 persons. But we failed. Now, the ecological layout is driven by talent and different from that in 2014 when all the people were concerned about the industry. Presently, more and more excellent talents are devoted to this area. So, only with excellent talents can we make superior achievements. 

From the point of view of business, the business of the exchange can only satisfy some needs of the user, such as the needs for buy-sell and trading. Actually, the user may have more needs, such as reading news, community communication, offline gathering, wallet saving and investment consulting, etc, which can be met with different business forms or products. Capturing these needs may have more profound meaning for the business of the exchange. More and more people have access to this area usually based on non-exchange needs. Therefore, that is one of the reasons for us to make a multi-area layout. 

Currently, all areas that we have stepped in are related areas regarding exchange and blockchain but are not multi-sector. These areas may be combined to some extent. Once these business forms can be complementary, the ecological power may be shown. Of course, a bigger team may cause some management issues, but I think they are issues that the startup company must experience and overcome on its way of development. 

Question 9

Fred Wang: The other day, a dialogue recording of Xiaolai Li in a private occasion was exposed. The recording as exposed contains a great deal of information, involving many blockchain projects and many famous figures in the coin circle and relating to the attitude toward the investment in such mainstream cryptocurrencies as Ethereum, Ripple, Qtum and TRON, and public blockchain. Suddenly, Hongfei Da, Chu Shuai, Jack Yi and Changpeng Zhao were swept up in one after another, attracting significant attention from the public and the industry. What do you think about the opinion dispute caused by the words and deeds of a public figure of blockchain? 

Robin Zhu: Haha. To be honest, I didn’t listen to it carefully, or read the full text carefully. I just read the key points summarized by others roughly. 

My overall idea is that some objective things mentioned in the recording are objective; his subject judgment is subjective. One person makes comments on the other person, thereby creating a topic definitely; one topic makes comments on the situation, thereby also creating a topic, even hot one. WeMedia gives a person the capability of releasing and conveying information, which is also the feature of this era. 

Fred Wang: In the said dialogue recording, Xiaolai Li mentioned, “we offer the exchange-to-B service and turn the exchange into a blog. Give a name, find a domain name, and click on the mouse. The exchange is established. In 2013, I thought that everyone could open an exchange, which was the direction of the future”. I also discussed with many persons that there would be probably no exchange like today in the future since every project owner may launch its own trading scenario. If there is such a trading platform with which make the trading system available to all blockchain projects, will it produce a huge shock to existing exchange mode? Let’s predict bravely. Will the exchanges like today still exist in 3 or 5 years? I want to listen to your opinion. 

Robin Zhu: Now, some companies are selling their trading systems, but the trading systems for blockchain assets are greatly different from ordinary trading systems. Once the scale of a trading system reaches certain magnitude, the issues to be considered will be totally different from those to be considered when the system is started, including security, risk control, concurrency and performance, etc. As for our global layout this year, we look for partners globally for establishing the exchange, which actually means the output of exchange system. Currently, we have launched it in Korea, Australia and US, and later will cover Canada, Brazil and other countries. 

As for development trend, it must be the trend to offer users more convenience. Current exchange is not convenient enough obviously, but the exchange, as the core section of pricing and conversion, does exist, provided that the form may be different from the current one and the needs for coin buy-sell may be separated from those for trading. At present, many people obtain blockchain assets through the exchange, while in the future such assets may be given to you by others or converted directly. Therefore, the future form may be co-existence of centralized head project exchange and decentralized long-tail project exchange. 

Question 10

Fred Wang: The last question, what is the concern of Huobi? Will Huobi continue to be so popular? 

Robin Zhu: At morning meetings or weekly meetings, I often talk to my team that there are only 24 hours before our bankruptcy. What we concentrate on every day is security and risk control. In our industry, a security event is not a small probability event at all. Hence, we have made a great investment in security, and established a third-party security alliance to solve and support the security issues regarding the industry. I believe that it is the core competitiveness in the future. 

What I’m concerned about every day is whether our team can really keep up with industrial development. Different from other industries, this industry may produce new points of knowledge and innovation modes on the daily basis. This industry does not follow the principle of “Move forward, or you’ll fall behind”. Instead, in this industry, if you don’t move forward, you will be finished by subsequent players. 

Besides, what I’m also concerned about is whether our team can guard against arrogance and rashness, whether they can contribute to the industry in a normal manner, whether they can calm down in case of success or failure, and whether they can remember their original aspiration and keep their growth along with the development of the industry. I often say at meetings that when others ask you for help, you are downhill; and only when you ask others for help and feel bad, you are on the rise. 

Though there are many things I’m concerned about, I firmly believe that Huobi will continue to be popular. “Being popular” is not a purpose. Instead, our purpose is to allow more people to get into this area for sharing the development bonus of the industry, changing the mind of a generation, and changing the way of operation globally with Huobi.

Fred Wang: In digital currency market, the war among exchanges has never stopped. In view of challenge competitions advancing wave upon wave and numerous persons holding the flag of product design and commercial change, it is not an easy job for Huobi to make current achievements. In the new era, every exchange will be a witness, player, writer and creator. 

I just remembered that both you and I offer voice content program in Ximalaya FM where I previously listened to the program “Learn blockchain from 0-1”. Your program is paid while mine is free of charge. Recently, I’m considering producing a confrontation version of Ten Questions with Fred Wang in which two guests may confront each other and I act as the host by initiating the topic. Thank you again, Robin, for your presence in Ten Questions with Fred Wang of Mars Finance. Wish Huobi a better future! Look forward to changing the world with Huobi. Thank you for your participation.