Huobi Liquidity Fund is a 100 million US dollars liquidity fund by the cryptocurrency exchange Huobi.
The liquidity fund was announced with the aim to enhance currency liquidity across numerous markets. The fund will also function to boost the liquidity capability of Huobi.
The million-dollar fund has the potential to transform Huobi’s platform as the global leader in liquid asset transactions.
Huobi Liquidity Fund: Goals
- To strengthen cross-border transactions
- To improve currency liquidity
How Will Huobi Liquidity Fund Improve The Cross-Border Transactions?
Huobi aims to enhance cross-border transactions through its liquidity fund by promoting greater fluidity.
The fluidity will be instilled by the introduction of diverse digital tokens or fiat currencies into the global market.
A digital token is a digital representation of a token or a coin with a cerian assigned utility; or
A digital token is an asset-backed, redeemable token.
Fiat currency is a currency issued by the government and not backed by any commodity. An example is gold.
Huobi Liquidity Fund: Impact On Traders
Huobi Liquidity Fund is a major win for traders as well as they will have advanced options on entering the market.
How Will The Traders Benefit From The Huobi Liquidity Fund?
- The trader will have easier access to funds
- The trader’s fund access will be secure
- The access can be utilized for unlimited and frequent purposes
- To carry out exchanges such as
- To buy currencies
- To sell currencies
- To carry out exchanges such as
Huobi and Liquidity
Huobi offers deep liquidity, an advanced measure to calculate the outside demand and supply of an asset.
The platform of Huobi which supports above 400 separate cryptocurrencies adds authenticity to the cryptocurrency trading pairs by offering deep liquidity.
The trading pairs such as ETH/USDT and BTC/USDT are two among the many pairs that are provided with deep liquidity.
A trading pair is an asset that can be traded mutually on an exchange. It shows the quantity of base currency required to buy one unit of the quoted currency.
Huobi Global can be said as the most liquid crypto exchange.
Huobi Liquidity Fund and Currency Liquidity
The article so far talked about the Huobi Liquidity Fund. Now is the time to answer the questions such as ‘what is a liquid fund?’ ‘what is currency liquidity?’ and related.
What Is Liquidity?
The term liquidity can be defined as the ability of an asset to be sold quickly at a price close to the marketplace. The U.S. Dollar is the most liquid currency in the world. USD is also the most traded single currency in the world.
The currencies are sold in liquid markets.
So, Which is the largest liquid market in the world?
Forex Market is the largest liquid market in the world as well as the most liquid market in the world.
Liquid Funds are debt funds that are predominantly invested in debt or money market instruments. Liquid Funds are invested for a very short tenure of time
The short tenure investments provide high liquidity. The short tenure generally lasts for a maturity period of 91 days.
Liquid Funds are said as money market mutual schemes that one can use to keep their surplus funds for a short time. It functions like open-ended debt mutual funds that invest in debt and fixed-income securities.
The decentralized exchanges, Dexs, require a high level of liquidity to function effectively. The issue that the decentralized exchanges and decentralized finances faced, earlier, was the lack of liquidity.
Now, this issue has been resolved by the liquidity pools. Liquidity Pools are collections of assets that investors can use to buy or sell tokens.
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Huobi
Huobi is a Chinese cryptocurrency exchange headquartered in Seychelles.
It was founded in 2013 by Leon Li, a serial entrepreneur in financial technology and a former computer engineer at the world’s largest database provider, Oracle.
Li now serves as the Chief Executive Officer and Chairman of the company. The other key people are Du Jun, the co-founder; Simon Wu, the CSO (Chief Security Officer), and Roy Zhu, the CTO (Chief Technology Officer).
Around one year after the establishment of the company, in 2014, it became the world’s largest digital asset trading platform with a cumulative trading volume of more than 20 billion US dollars.
The digital currency exchange now has an additional office site in Hong Kong and in countries such as the United States, South Korea, and Japan.
As China implemented a Bitcoin exchange ban in 2017, it resulted in the company ceasing Bitcoin withdrawals. As of now, in China, the company has the role of a blockchain consulting and research platform. Huobi is the largest bitcoin exchange in China.
Huobi has earlier said that its focus was on providing projects with liquidity investments and incubation services. This was supposed to function as a developed and more inclusive DeFi and Web3 blockchain ecosystem.
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