Huobi Chain Goes Open Source; Will Binance Chain Be Next?
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Global cryptocurrency giant Huobi Group has made a major stride towards fueling development of its eponymous blockchain. The company has revealed that its recently unveiled Huobi Chain will be fully open sourced, significantly boosting its prospects of attracting interest from the broader developer community.

Developed in collaboration with Nervos, Huobi Chain has been specified as a high-performance public blockchain that will host emerging crypto projects. It is anticipated that the most enterprising of these will eventually make their way onto Huobi’s global exchange, likely via its Prime token launchpad.

Although still under development, the decision to open source the project straight out the gates is being hailed by Huobi as evidence of its commitment to foster a genuinely decentralized ecosystem.

“Since the start of this project, our goal was to create an inclusive ecosystem...” said Leon Li, founder and CEO of Huobi Group. “In sticking to that vision, we’re now opening the code and inviting the greater blockchain community to help us shape and build the future of decentralized finance.”

One of these chains is not like the other

On the surface, Huobi’s decision to commission its own blockchain would appear to be replicating the approach trialled by Binance and subsequently Bithumb. There are key differences in Huobi’s endeavor however, starting with the fully open source code. Binance Chain, in comparison, is primarily closed source, with only certain components such as the ERC-20 atomic swap mechanism fully open. The software governing the nodes which oversee Binance Chain, however, are closed off, leading some to joke that Binance Chain projects don’t meet the exchange’s own listing criteria.

The main benefit of exchange chains, from the perspective of investors, is the ability to trustlessly trade tokens. In this context, Binance’s de facto control of the nodes overseeing its network is not of major concern for traders of its decentralized exchange. Huobi has elected to take a different approach, however, one which is closer to the original ethos of distributed networks. On the decentralization spectrum, Huobi Chain won’t be close to Bitcoin, but nor will it occupy the other end of the scale, where Binance Chain resides.

A delicate balancing act

Creating a blockchain that can satisfy the needs of trustless traders and inquisitive regulators simultaneously is no mean feat. In the case of Huobi Chain, the plan is to incorporate unique regulatory nodes that can oversee activity alongside validators. This will enable KYC and AML obligations to be met without compromising on the ability to swap assets non-custodially.

With even Facebook’s much-vaunted Libra currency open sourced, Huobi Chain will be in good company at least. But with a testnet scheduled for Q1 2020, followed by a mainnet the following quarter, the project will be up and running long before Libra. Through open sourcing the Nervos-engineered project at the earliest available opportunity, Huobi will be hoping to attract as broad a developer community as possible, and from there to drive rapid adoption from projects eager to utilize its new chain.

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