Huobi on decentralized exchanges: 'This business is a very centralized business'

28 Jun, 2018
by Jelmer van der Dussen
News
Huobi on decentralized exchanges: 'This business is a very centralized business'

Centralized and decentralized exchanges will be able to operate next to each other, but centralized exchanges will keep having a bigger market share in the future, Chief Officer Strategy of Huobi Pro Charlie Tsai said during the Blockchain Expo in Amsterdam this week.

Jelmer van der Dussen
AMSTERDAM

Tsai gave his vision on the future of exchanges and the discussion on centralized versus decentralized exchanges. “It is not easy for decentralized exchanges to replace the centralized exchanges”, Tsai said. “In the future, the majority will keep using centralized exchanges because of its speed efficiency, low cost and high volume and liquidity.”

Huobi is currently the third largest exchange in terms of volume, with only OKEx and Binance having a higher trading volume. Tsai: “There are hundreds of exchanges, but you only know the top 20. That’s because only the big guys can take the majority of the market and that proves that this business is a very centralized business.”

At Huobi they realize more and more decentralized exchanges will be coming over the next period. “But in the current situation, centralized exchanges still take the majority of the volume. Speed efficiency is very important. You can’t wait a couple of minutes for your order to go through, and centralized exchanges make sure trading is fast. On a decentralized exchange, you have limited pairs, liquidity and volume. Centralized exchanges can cut the costs to make trading fees very low, and a DEX will never be free.”

Tsai also sees the benefits of decentralized exchanges. “The transparency is higher, as well as the safety.”

That’s why Huobi is looking into features that make the exchange more ‘semi-decentralized’. “We can decentralize the order book, the organisation or management and the listing process.”

Read more: Huobi to cease trading for Japanese, still aiming to open an exchange in Japan

Earlier this year Huobi launched HADAX, Huobi Autonomous Digital Asset Exchange, where users can vote for the projects that they want to see on the Huobi DEX. Tsai: “We don’t decide, we ask the community to vote for what they think is the best project and they will be listed on our exchange. It’s online already, but still in the test phase.”

Huobi ‘keeps an eye on developments around decentralized exchanges’ and ‘will invest in these if they see a future in it’, Tsai said in Amsterdam.

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