Have you ever heard the expression ‘hope for the best and prepare for the worst’? Chinese cryptocurrency giant Huobi, a former ‘big three’ exchange, is doing exactly that. Although the exchange is a profitable business that still makes money every month, they are laying off staff and preparing for the worst amidst this current bear market.
A little known fact – Huobi had a Global Writers Program consisting of 90 or so freelance writers. The purpose of the program was to leverage freelancers’ skills and audiences to spread Huobi-related content for link building and other SEO purposes. There’s nothing wrong with that, especially considering the fact that we were given the freedom to express our real opinions. In exchange for our posts, we were compensated with a certain amount of Huobi Token (HT) that corresponded with our tier – writers with larger audiences received more HT. Here are a few examples of posts I wrote for Huobi.
- The Current State of Crypto Assets on Huobi Talk Ep. 33
- 5 Margin Trading Tips on Huobi Global
- Project PAI – A Decentralized Personal AI on the Blockchain
The program was initially very well run, and the associated Telegram group was filled with skilled and collaborative writers. Things started going downhill when the crypto market turned bearish. Writers lobbied for Huobi to move to a USD-pegged distribution for HT – something I had routinely inquired about since the start of the program. Over the past few months, HT has hovered between $1.00 and $1.30. For me, researching for, writing, and editing an article was often a 4-5 hour effort – this translates to a wage of $6/hour. FYI, minimum wage at McDonald’s pays 50% more and doesn’t require knowledge about blockchain and dealing with unpredictable payment schedules.
I checked out of Huobi’s writers program sometime in August 2018 after writing this post. It was obvious that Huobi was not going to move to a USD-pegged compensation model, and continuing to write for $6/hour while similar programs at other exchanges were (and still are) paying closer to $75/hour was a waste of time. A few days ago, I scrolled through the program’s Telegram group and noticed a few writers discussing the most recent payment cycle which was already over 40 days late. Let’s do some quick math.
- Huobi’s 24-hour trading volume was $231,391,548.
- Huobi charges a 0.2% fee for both makers and takers. VIPs receive a fee discount between 10-50% depending on trading volume. For the purpose of this calculation, let’s use an average fee rate of 0.18%.
- 0.18% of $231,391,548 is $416,504.79 in revenue per day, or approximately $12,495,143.70 per month. Keep in mind this figure doesn’t account for other revenue streams.
- The Global Writers Program currently has 90 members. With HT at $1.05, a calculation using the program’s middle tier (this is being generous) results in a payout of $5,670 in HT per article. Writers are split into two groups, so Huobi effectively pays $2,335 per article. With four articles per month (again, this is very generous), the cost of running the program is $9,340 – approximately 0.075% of monthly revenue. In reality, the figure is likely closer to 0.04% or less.
So, what’s the point here?
Huobi’s lack of respect for its writers is very unprofessional. This is even more apparent when considering the following message which was sent from Dominick, a Huobi staff member, to the program’s Telegram group on January 25, 2019.
First and foremost, I appreciate your hardwork during the time as Global Writers. As with all programs items shift and focus change to other key metrics. Unfortunately, the Global Writers program has been switched into a social media ambassador program. We will give you task to do and sometimes payment will be given and sometimes it will be upon you to do them to win possible Huobi merch. HT will not be the main incentive unless you can show or present to me how what you did had a direct effect on business. Just wanted to give you a heads up. Thanks again for your hard work. Please like and follow all social media channels. Huobi Global on Twitter, Facebook, Instagram, YouTube, LinkedIn, and Reddit. To participate in this new program thanks! Questions? Feel free to ask me on PM
Instead of fulfilling a financial commitment that is now over 40 days late, Huobi announced the cancellation of the Global Writers Program and proceeded to ask writers to shill on social media in exchange for “Huobi merch”. As expected, several writers brought up concerns regarding the status of the overdue payments now that the Global Writers Program has been shut down. In response, the Dominick said the following.
I am going to leave this group for awhile i will be back after CNY. I can’t read these comments anymore too negative. Enjoy.
Yes, that’s right. Instead of doing his job, Dominick has chosen to leave the group for two weeks because writers asking about extremely overdue payments is “negative”. I never thought of Huobi as a world-class exchange, but I used to have respect for the company. Unfortunately, bear markets have a strange way of revealing true intentions, and it’s clear that Huobi is only interested in raking in profits from trading fees without fulfilling financial commitments to the “small fish”.
What a joke.