Actual condition of Huobi contract transaction caused widespread doubt after Huobi announced in Weibo that it has been the leader in contract transaction volume and depth of trading all over the world.
The volume and depth of contract transactions is only an official statement, as the user’s experience is the only thing can explain. Since the launch of the Huobi contract transaction, problems like downtime, stuck often occur.
In fact, one month before the launch of contract transaction, Huobi set a record of 7 hours of continuous downtime. At the beginning of the Huobi BTC Contract Competition, Huobi’s APP once again downtime.
The second problem of Huobi’s contract transaction is poor in depth and users, lack of professional market replenishment. Sometimes Investors can’t find counterparts, causing large orders difficult to deal with.
In order to avoid allocation, Huobi usually close out the deal in advance. For example, if the current price of Bitcoin is $1,000, according to the rules of other exchanges, the deal will not close out until it drops to $800, while Huobi will close out early as it drops to $900. This invisibly increases the risk of contract products.
In the cryptocurrency market, contract products are powerful complement to the actuals, and have the function of risk hedging for investors. OKEx’ CEO doubted over the statement of Huobi,“the sharp increase of Huobi’s contract transaction may resulted from ‘VIP client sharing’ plan. VIPs on other competing crypto exchanges are able to enjoy corresponding preferential rate for contract transaction on Huobi.”
Crypto exchanges no matter OKEx or BitMEX all set a close line in contract transaction mechanism to avoid margin accounts unable to cover the loss. In general, close lines for BTC and ETH in OKEx or BitMEX are set at 10% to 20% of floating loss.
In August 14, Huobi released a statement to respond the issues about close out index...