TVL of $2.3 billion in six months: how Huobi ECO Chain is developing

The DeFi boom in 2020-2021 proved to be the main driver of rising transaction fees on Ethereum. In April this year the average fee exceeded $20, and in May reached $70.

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This situation prompted major exchanges to create Ethereum alternatives: Binance Smart Chain, OKExChain and Huobi ECO Chain (HECO). The latter has become the linchpin for Huobi\’s ecosystem, which includes the exchange token Huobi Token (HT), the stablecoin HUSD and the Huobi Wallet.

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Together with Huobi, we discuss the advantages of HECO and the main DeFi projects on this blockchain.

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Development and features of Huobi ECO Chain

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In January 2018, Huobi launched Huobi Token (HT) on the Ethereum network. Holders received discounts on trading fees on the exchange. Over time, Huobi expanded the token\’s use. Currently HT provides access to the exchange\’s VIP services and token sales on the Huobi Prime platform.

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The rise in Ethereum fees affected the cost of HT and HUSD transfers. In March 2020, Huobi began development of its own blockchain, and in December launched the HECO mainnet.

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Huobi ECO Chain — public EVM-compatible blockchain with the consensus algorithm HPoS, which is a combination of Proof-of-Authority (PoA) and Proof-of-Stake (PoS). Ethereum developers can use libraries web3j, web3js to build decentralized applications and DeFi protocols on HECO.

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Validation of transactions on HECO is performed by a network of 21 validators. The protocol rotates this network each epoch. The epoch duration is 200 blocks. To become a validator, one must stake at least 32 HT.

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HECO can process more than 500 transactions per second. The average network fee is $0.001.

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The HECO roadmap includes four stages:

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• Tinder, Q1 2021. Release of core tools for developers of decentralized applications.
• Spark, Q3 2021. Work on expanding HECO infrastructure and attracting new developers.
• Flame, Q2 2022. Implementation of Layer2 solutions to boost network performance.
• Blaze, Q1 2023. Release of decentralized applications for large enterprises.

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HECO is currently in the Spark phase. Huobi is working to expand the blockchain ecosystem: awarding grants, hosting hackathons and launching ambassador programs. Information about activities in the HECO community can be found on the page HECO Activities.

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Connecting a wallet to the HECO network

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At the time of publication, HECO supports MetaMask, Huobi Wallet, Bitkeep and another 10 cryptocurrency wallets.

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We illustrate how to connect to HECO using the MetaMask wallet. Find the Networks menu on the MetaMask home page. In the list of networks, select Custom RPC.

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After that, a network settings window will open. Enter the parameters to connect to HECO:

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• Network Name (Network Name): heco-mainnet;

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• New RPC URL (New RPC URL): https://http-mainnet-node.huobichain.com;

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• Chain ID (Chain ID): 128;

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• Currency symbol (Currency symbol): HT;

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• Block Explorer URL (Block Explorer URL): https://hecoinfo.com.

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After filling in the details, click the Save network button (Save).

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If you decide to connect your wallet to DeFi protocols on HECO, MetaMask will offer to add this network and will fill in the data automatically.

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To verify the network parameters, click View all details. Then click Approve and confirm the switch from Ethereum to HECO by pressing Switch network.

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DeFi projects on HECO

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As of writing, 18 DeFi protocols operate on HECO. By mid-June, the total value locked (TVL) in them reached $2.3 bn. The top three include:

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• MDEX — a decentralized exchange (DEX) supporting Ethereum, Binance Smart Chain and Huobi ECO Chain. Thanks to the \”dual mining\” mechanism, users earn rewards for providing liquidity and executing transactions on the platform.

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• LendHub — a lending protocol, fork of Compound. The platform offers farming of LendHub (LHB) tokens. The project\’s token has been added to listings on Huobi, Hotcoin and Bibox.

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• O3Swap — a liquidity aggregator across HECO, Ethereum, Binance Smart Chain and NEO.

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The full list of DeFi projects on HECO can be viewed on the analytics service Defibox Defi Llama.

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Conclusions

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Eight months have passed since the HECO mainnet launch. In that time, developers have deployed more than one hundred projects on the blockchain, with a peak TVL of $2.3 billion.

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The rapid development of HECO has been driven by community interest in DeFi, low transaction fees, and compatibility with Ethereum. In the near term, HECO could become a cheaper and more environmentally friendly alternative to this blockchain.

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