Huobi Introduces Community Vote on Whether or not to Airdrop HT from Buyback Fund
With the ultimate goal of creating a decentralized autonomous organization (DAO), Huobi strongly believes in including its community in their decision making process, especially if a topic concerns Huobi token holders. Huobi is not only community-oriented but they are also customer-focused. By implementing an emergency user protection fund in which they already deposited 230,922,398 HT (roughly 260,000,000 USD) they are prepared for a potential security leak or vulnerability.
Besides the User Protection Fund which was funded through the quarterly buyback of HT on the open market, Huobi also set up a Security Reserve Fund that contains 20,000 BTC (84,000,000 USD at the time of writing) at all times to be used in case of emergency.
Huobi first announced it will be buying back HT by using 20% of the quarterly revenue made on transaction fees and other income streams. The first and second quarter buybacks hack already occurred and funds have been deposited in the User Protection Fund. For the third quarter buyback Huobi decided to airdrop the funds to Huobi Token Holders. By taking a snapshot from the HT token address, funds would be deposited into HT user accounts on three different occasions (the 15th of October, 15th of November and 15th of December). The airdrop will only occur to users that hold their HT balance on Huobi Global.
Huobi received some signals that not all community members were all for the airdrop to occur. This made the Huobi team decide to hold a community vote in which HT holders can vote for or against future airdrops of Huobi Token buyback funds.
The main pro for airdropping HT is the fact that token holders immediately gain extra token, thus extra value from holding HT. This might give an incentive for HT holders to hold on to their base tokens for future airdrops. The pro on burning HT is the decreased supply of HT. Decreasing the supply, usually results in an increase in price for the remainder of tokens.
A downside to airdropping tokens is that HT holders might have the intention to sell. If a lot of people feel the same way, the excessive selling of airdropped tokens can cause a price drop. The main downside to burning tokens is the fact that those tokens are forever gone and cannot be put back into circulation. Another downside is that a decreased supply is not a guarantee that the token price will go up.
As I see it, the User Protection Fund and the additional Security Reserve Funds are sufficiently funded to be addressed in times of emergency. I believe the number of HT that will be bought back each quarter should be burnt, because it reduces the supply, making the token more valuable in the long term. To airdrop the token would only make it easier for people to dump the tokens immediately after they received them. Often times when people get tokens airdropped they are dumped on the market and the price will take a hit.
You can place your vote between Monday the 3rd of December until Thursday December the 6th . Votes are open to all Huobi Token holders.
The current repurchase Program:
Huobi buys back 20% of its quarterly revenue. The proceeds will be airdropped to existing HT holders.
Proposed repurchase Program:
The HT that will be bought back is burned or redistributed instead of airdropped to HT holders. This will decrease the circulating supply of HT.
How do I Vote:
HT has the ability to vote on behalf of the airdrop to continue or the tokens to be burnt. The final decision will be made depending on the program that earns more than 50% of the total votes. Voting is open to all HT holders (who hold at least 1HT). Use your vote now and let your voice be heard.
The snapshot of HT held will be taken on: 23:59:59 on December 2 (Singapore time)
Voting Period: December 3, 2018 15:00 to December 6, 15:00 (Singapore time)
-Each HT you own entitles you to one vote
-Each user can only cast their votes once
-Results will be announced within five working days following the voting
-Percentage of votes will be calculated relative to the total number of votes
-Trading of HT and cryptocurrency assets will not be affected
Read more about Huobi’s buyback program here.
Disclaimer: This article is not intended as investment advice. It is just my personal opinion about digital asset exchange Huobi Global and Huobi NEXT.
You should always do your own research. Huobi Global rewards me for writing this article and supports me for ventilating my own personal opinion.
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