The decentralized finance (DeFi) space has evolved dramatically since the launch of MakerDAO in December 2017. Initially focused on enabling users to generate the USD-pegged stablecoin DAI through over-collateralization, MakerDAO quickly grew, locking over $150 million in assets within half a year and establishing itself as a flagship DeFi application.
Despite early progress, the broader cryptocurrency market downturn impacted emerging sectors like DeFi, leading to a prolonged quiet period. During this time, foundational DeFi protocols such as Compound, Uniswap, WBTC, Dharmar, and Augur were already operational. By 2019, new projects like Synthetix, DDEX, dForce, and Kyber had also emerged, setting the stage for the explosive growth of DeFi in 2020.
The real turning point came when Compound was listed on Coinbase and introduced its "liquidity mining" model, attracting massive participation and pushing the total value locked (TVL) in DeFi beyond $1.8 billion by June 2020.
However, many users were still unable to fully participate in the DeFi boom due to high transaction fees and network congestion on Ethereum. This limitation created an opportunity for exchange-backed public chains to enter the DeFi arena.
The Rise of Huobi ECO Chain (HECO)
On December 10, 2020, Huobi Global launched the Huobi ECO Chain (HECO), with its mainnet going live on December 21. HECO is designed to develop in four phases: "Spark," "Flame," "Blaze," and "Wildfire." We are currently in the initial "Spark" stage.
Now, just over a month since its launch, HECO has demonstrated remarkable progress in terms of data metrics, ecosystem richness, and developer support. Some have even suggested that HECO has achieved in one month what took DeFi three years to accomplish. But is this really the case?
What Has HECO Achieved in Its First Month?
As of January 28, HECO has locked over $1.3 billion in mainstream assets, setting a new historical high. The network processes over one million daily transactions, with more than 1.74 million non-zero addresses and 51 deployed decentralized applications (DApps).
In a significant move, the HECO Ecosystem Alliance recently welcomed 11 major exchanges, including BiBox, BiKi, BigONE, BitZ, HBTC, Hoo, LBank, MXC, ChainUP, Bluehelix, and Jubi. This alliance aims to provide robust support for projects within the HECO ecosystem.
Beyond impressive data, HECO has also fostered several high-performing projects. For example, BasisGold Share (BAGS), the first algorithmic stablecoin on HECO, saw a price increase of over 5000% from its opening price of $20 after being listed on Huobi Global.
Similarly, the decentralized exchange MDEX recorded a TVL exceeding $400 million within an hour of launching its liquidity mining program. After listing on Huobi Global, its token price surged by 800%.
Other notable projects include the lending protocols FilDA and Channels, and the yield aggregator EarnDefi, with locked assets of $113 million, $95 million, and $69.15 million, respectively. The decentralized exchange Beeswap has also attracted over ten thousand addresses.
These achievements highlight HECO's rapid growth and the strong wealth-generation effects within its ecosystem. But what factors have driven this success?
Key Factors Behind HECO's Success
Several elements have contributed to HECO's emergence as a leading public chain in early 2021.
A. Strategic Investment and High-Profile Launch
Upon launching its mainnet, Huobi DeFi Labs announced a $200 million "HECO Ecosystem Fund" to support projects on the chain. This fund focuses on key DeFi sectors such as decentralized exchanges, lending, oracles, cross-chain solutions, stablecoin swaps, and insurance.
Leveraging Huobi Global's seven years of industry experience and extensive user base, the platform offers comprehensive support for DApps, including marketing, roadshows, and ecological backing from the Huobi Group. This approach resembles a comprehensive "star-making" plan for blockchain projects.
B. Tangible Benefits for Users
HECO addresses critical pain points experienced by Ethereum users, such as high gas fees and network congestion. On HECO, gas fees can be as low as $0.001, and users holding HT (Huobi Token) can enjoy discounts of up to 65% on transaction fees through the "meta-transaction" feature.
The network boasts a throughput of over 70 transactions per second (TPS) and an average RPC response time of less than 300 milliseconds. Utilizing a HPoS consensus mechanism, HECO achieves block confirmation in just three seconds, eliminating congestion issues and significantly reducing participation costs.
C. The "Creator Plan" for Ecosystem Development
Ecological development is crucial for any public chain. On December 25, 2020, HECO launched the "Creator Plan," inviting developers to build and deploy DApps on the network. A judging committee evaluates projects based on operational performance, selecting top projects as "Gold Creators."
Winners receive official recognition, fast-track review for listing on Huobi Global, investment opportunities from the HECO Ecosystem Fund, up to $1 million in liquidity support from Huobi Pool, and global marketing resources.
This initiative underlines HECO's commitment to supporting developers at every stage of their growth, making it an attractive platform for projects from conception to launch.
The Power of HECO's Ecosystem: Reputation and Returns
While the DeFi sector in 2020 was marked by exponential growth and high returns, many believe this was just the beginning. As Du Jun, co-founder of Huobi Global, stated, "I firmly believe that DeFi 2.0 will make a comeback soon, and it will be even more impactful. DeFi 2.0 will integrate blockchain into real life and transform how people live."
HECO's entry at the end of 2020 may have seemed late to some, but it is well-positioned to lead the next wave of DeFi innovation. Leveraging Huobi's established user base and strong ecosystem support, HECO demonstrates a firm commitment to reshaping DeFi.
The "Creator Plan" has already attracted 86 projects across various sectors, including assets, lending, wallets, DEXs, wealth management, and NFTs. Within just 30 days, HECO has showcased a vibrant and rapidly expanding ecosystem, surpassing the development of many older public chains.
The first round of the "Creator Plan" concluded with five projects—Basis Gold, FilDA, Channels, EarnDefi, and Beeswap—being awarded "Gold Creator" status. These projects will benefit from comprehensive official support, and the second round of the plan is already in preparation.
HECO's rapid progress is the result of extensive behind-the-scenes efforts by a dedicated team of developers and operators. As Du Jun mentioned on New Year's Day, 2021 presents 30 listing opportunities and 50 investment slots on HECO.
Given the current trajectory, HECO is just getting started. As the cryptocurrency market continues to heat up, DeFi is poised for further expansion, and HECO is undoubtedly an ecosystem to watch closely in 2021.
Frequently Asked Questions
What is Huobi ECO Chain (HECO)?
HECO is a high-performance, energy-efficient public chain developed by Huobi Global. It supports decentralized applications (DApps) and smart contracts, with a focus on low transaction fees and high scalability.
How does HECO compare to Ethereum?
HECO offers significantly lower gas fees and faster transaction times compared to Ethereum. It uses a HPoS consensus mechanism, enabling block confirmation in three seconds and supporting higher throughput.
What is the "Creator Plan" on HECO?
The Creator Plan is an initiative to support developers building on HECO. It provides funding, technical resources, marketing support, and potential listing opportunities on Huobi Global for outstanding projects.
Which tokens are used on HECO?
The native token of HECO is HT (Huobi Token). It is used for transaction fees, governance, and staking within the ecosystem. Many DeFi projects on HECO also issue their own tokens.
How can I participate in the HECO ecosystem?
Users can participate by staking assets in DeFi protocols, providing liquidity, yield farming, or developing DApps. To get started, you need a Web3 wallet compatible with HECO, such as MetaMask or Huobi Wallet.
Is HECO secure?
HECO employs a robust HPoS consensus mechanism and has undergone extensive security audits. However, users should always exercise caution and conduct due diligence when interacting with DeFi projects.