The HECO node election is popular. What do domestic and overseas institutions "smell"?

On May 7, HECO officially announced that in order to better realize the governance upgrade and performance improvement of HECO, HECO will launch a node election campaign and officially opened the node registration entrance on May 24.

As an ecological public chain initiated and supported by top platforms, HECO has always attracted much attention. As soon as the node election announcement came out, well-known institutions at home and abroad lined up in a long queue.

The development of HECO ecosystem is not smooth sailing at this time, but the institutions have shown great interest, which shows that they may see more possibilities for HECO in the future...

01 Node election is hot
HECO decentralization is progressing smoothly

According to the technical route announced by HECO earlier, it is currently still in the initial stage of the four stages of HECO: spark, followed by spark, flame and prairie fire.

Before the node election, it was actually in the public beta stage. Although it was dragged down by some "dog" projects that are common in decentralized ecosystems in the early stages, the chain still maintained a locked position of more than 8 billion US dollars. The overall development was rapid and the results were quite impressive.

The current DeFi infrastructure in the HECO chain ecosystem is relatively complete. In addition, the Huobi platform has been continuously supporting the HECO ecosystem with its own resources and traffic. This is the main reason why everyone still has high hopes even though the "dog project" almost caused "a bad apple to spoil the whole barrel."

Because no one can ignore the hard power of the Huobi platform behind HECO, the problems encountered in the public beta in the early stage of development are inevitable (as reported in the early stage). Because there is still a long way to go, there are more possibilities waiting.

Recently, the call for HECO has suddenly become louder, and HT has also strengthened in response. This is mainly due to the expectations brought about by the start of the node election. It indirectly shows everyone’s expectation for further decentralized governance of HECO, and also indicates that HECO is about to enter a very important stage in the initial stage.

According to information revealed by HECO officials, the HECO node election received nearly 200 registrations on the second day after the registration portal was released, including domestic and foreign institutions and professional KOLs, and received 63 overseas registration forms and 134 domestic registration forms.

According to the official election registration conditions, to become a HECO node candidate, you need to stake 5,000 HT. The staked HT can only be unlocked after the candidate withdraws from the election or gives up node governance. The unlocking period is 15 days.

All node candidates must pass KYC review. After the node candidates complete the registration, the voting and staking interface will be opened. At that time, users can vote for the node candidates through the HECO official website and pledge HT (HECO) to the HECO address specified by the node. The top 11 node candidates will become the main nodes, and 12-21 will become the backup nodes.

HECO has a total of 21 main nodes, 11 main nodes and 11 alternative nodes are open in this round.

In fact, the most direct reason why domestic and foreign institutions lined up to participate in the HECO node election is not only the international status of the Huobi platform itself in the industry, but also the good performance of the public beta operation data of the HECO main network.

Since the launch of the HECO mainnet, more than 5 million blocks have been produced, more than 300 million on-chain transactions have been processed, and nearly 6.5 million accounts (number of addresses) have been served. It can be said that compared with most public chains from 0 to 1, HECO's cold start is quite smooth.

All things are difficult at the beginning. Now that we have completed the cold start, we will naturally be able to attract institutions from all over the world to participate in the node election. By then, we will have a more decentralized ecological public chain with nodes spread all over the world.

02 Chasing the HECO node election <br/>What did domestic and foreign institutions “smell”?

I remember that there was a seemingly "grand" EOS super node election. Originally, EOS planned to select 21 super nodes and 100 candidate nodes. As a result, the number of applicants was too small, and even 121 could not be gathered. As a result, the number of candidate nodes was temporarily reduced to 49, which was barely enough to make up the number.

Because super nodes not only require participants to stake a large amount of EOS but also need to invest manpower and material resources for a long time, these thresholds often make nodes discouraged. Compared with previous node elections, this HECO node election is more popular. Although there are not many places open this time, the number of participants far exceeds that of almost all public chains that have conducted node elections in the past.

These participating institutions have always been "nothing but profit" and have never gotten up early. So what benefits and opportunities did they "smell" when HECO launched the node competition? Let's analyze it together...

1. Node income is "good"

A few days ago, some media carefully calculated the benefits of participating in HECO nodes. First of all, the main node has the governance rights (processing transactions, signing blocks, initiating proposals, etc.), which means the right to directly influence the future development of HECO. Then, both the main node and the backup node will obtain a share of the transaction fee income.

Some people say that governance rights are actually useless and do not pay money. In fact, governance rights bring many benefits. As a super node of a top-level active ecological public chain, it will not only be of great help to the reputation and brand within its own industry, but also able to submit various favorable proposals. Coupled with the sharing of transaction fee income, it is a "good thing" to gain both fame and fortune.

This is also the reason why tokens like MakerDAO, which only have governance rights, are very popular.

So how attractive is the on-chain handling fee? All node handling fees of HECO are distributed according to the following ratios: 50% is evenly distributed to each master node, 40% is distributed according to the number of HT locked by all 21 master nodes, and 10% is distributed to the locked HT corresponding to all candidate nodes.

According to calculations, the annualized return on the currency-based fees of the master node can be as high as APY1234.8%; the annualized return on the currency-based fees of the backup node can reach APY261.9%, which is indeed much higher than that of BSC and OKexChain, and this does not take into account the subsequent increase in HT.

2. Lower systemic risk

I believe everyone is well aware of the current situation in the crypto industry. We know two major trends: one is the accelerated rise of DeFi, and decentralized infrastructure will carry more and more ecosystems. The other is that CEX managed by centralized organizations will face greater regulatory pressure than DEX managed by DAOs, and more and more detailed rules will lead to a linear increase in the operating costs of CEX.

Judging from the current two major trends, the layout of DeFi and the increase of DeFi ecological infrastructure, especially the public chain with a prosperous ecology, is a very "anti-fragile" investment. First, HECO itself has completed the cold start, and the probability of success is higher. Second, the continuous injection of Huobi's own resources and traffic brings a high probability of sustainable development prospects.

In general, under the current situation, becoming a HECO node is an investment with low systemic risk, guaranteed returns and stability.

3. Future potential

In fact, as we said before, HECO is currently in a very early stage. Even though there were some "local dogs" causing trouble some time ago and "one bad apple spoiled the whole barrel", most people still have high hopes for it and recognize its future potential.

This node election will also promote decentralized governance, bring about certain upgrades, leverage the power of external institutions while enhancing user participation and co-construction, and empower the community with more rights and incentives, thereby promoting the prosperity and sustainable development of the entire HECO ecosystem.

After HECO's infrastructure and governance structure are ready, it will enter the accelerated incubation period of the ecosystem, which will achieve twice the result with half the effort. By then, the investment of Huobi platform resources will inevitably be much larger than the initial public beta stage, and the focus will be on supporting the ecosystem.

By around 2022, the cross-chain interoperability technology solution will be mature. By then, the number of HECO users is estimated to have doubled several times. By then, the performance will be expanded through the cross-chain interoperability protocol, and the consensus protocol will also be upgraded, entering the era of cross-chain large ecology.

The further plan is to carry out larger-scale commercial applications and implementation to support the smooth operation of various traditional businesses on the chain.

4. Demonstration and leadership of well-known institutions

The super node election was first proposed by EOS’s DPOS consensus mechanism. As everyone knows, the official EOS did not provide any resource support. After the development of the EOS.IO system, the community nodes spontaneously organized to launch and operate the main network. At that time, the super nodes included communities, institutions, wallets, project teams, etc., which spontaneously pushed the EOS ecosystem to a certain height without any support.

Although it later declined due to insufficient community governance and nodes accusing the official of inaction, EOS's nodes did successfully create a super ecosystem that almost threatened Ethereum, and they were successful in this regard.

At HECO, many financially and technically competent institutional teams will be introduced to participate in the co-construction of the ecosystem through node elections. This will not only provide node operation and maintenance, but will also serve as a model for the ecosystem. These nodes that are deeply involved in the construction of the public chain will often have a strong sense of "ownership". Driven by the common interests of all, they will bring in funds to support ecological projects, and even personally create high-quality ecological projects to participate in them.

Although HECO also uses a POS mechanism similar to that of a super node, the biggest difference between it and EOS is that it is backed by the continuous support of Huobi, a top resource and traffic platform. Of course, it is expected that Huobi itself will become a large node in the future.

Coupled with the linkage between its CeFi ecosystem and HECO ecosystem, Huobi has sufficient reasons and motivation to continue to support this decentralized public chain. It can be regarded as absorbing the essence of EOS and removing its dross. There is no need to step into the pits that EOS has stepped into.

03 Summary

Today, HECO's decentralization is progressing smoothly, the ecosystem has completed the accumulation from 0 to 1, and node elections have been opened with twice the result with half the effort. I believe that HECO's spark stage will be accelerated due to the participation of more excellent institutional nodes, bringing more to the HECO ecosystem.

This "fire" will burn brighter and brighter, and the crypto industry is one step closer to the vision of large-scale commercial applications and implementation.