What is HydraDX? Full information about HydraDX and HDX token token

• Overview of HydraDX
• What is HydraDX?
• Basic Features of HydraDX
• The main products of HydraDX
• The development team, the investor of the project HydraDX
• HydraDX Development Roadmap
• Overview of HydraDX tokens
• What is LHDX token?
• What is HDX Token?
• Information of HDX token
• HDX token allocation
• Where can HDX tokens be bought and sold?
• The future of HydraDX and should you invest in HDX tokens?
• summary

Overview of HydraDX

What is HydraDX?

HydraDX is a decentralized cross-chain liquidity protocol built on Substrate – a Modular Framework that allows developers to develop multiple blockchain projects. 

The project offers a unique solution that allows users to put all assets into a liquidity pool called HydraDX Omnipool. As of now, HydraDX Omnipool is the first multi-asset liquidity pool available in the crypto market. In HydraDX Omnipool, crypto assets will rely on HDX native tokens to determine their relative value. 

With a multi-asset liquidity pool, HydraDX will innovate the crypto-asset trading model in pairs using separate liquidity pools. The project will provide ample liquidity suitable for all assets built on Substrate. 

At the same time, HydraDX also helps to improve transaction processing speed, lower costs and reduce the risk of slippage. Not only that, but HydraDX also integrates interoperability with other chains, including assets based on the Ethereum blockchain . HydraDX is being built to a rigorous engineering process, in partnership with Block Science. 

Basic Features of HydraDX

In the current financial world, liquidity is fragmented and costs are quite high. Therefore, blockchain will solve this problem by providing a layer of technology that is open and accessible to anyone to meet the needs of trading and exchanging assets.

However, the current Ethereum platform still has many limitations such as congested networks and high gas fees, so DApps built on this blockchain will also have similar disadvantages.

HydraDX is designed to take on the role of parachain on the Polkadot network . Therefore, this project will have shared security from Relay Chain and be able to connect to other Polkadot parachains. 

At the same time, by building on Substrate, HydraDX will get the transaction processing speed and flexibility of Substrate. From there, the system will be optimized to ensure flexible and smooth programmable value exchange processes. Not only that, Substrate also helps HydraDX have the ability to upgrade seamlessly without having to fork.

Additionally, thanks to the planned interoperability between the Polkadot and Ethereum ecosystems, HydraDX will tap into the liquidity, potential, and community of Ethereum. From there, combine the best of both platforms and integrate into HydraDX. 

HydraDX Omnipool

HydraDX Omnipool will need the participation of 2 objects, a liquidity provider and a protocol. The platform will implement a multi-asset handle model inspired by the link curve. 

The core idea of ​​Omnipool is that the protocol will provide an underlying asset (HDX) of its own. This asset will represent 50% of the initial value of the liquidity pool, the remaining 50% will be contributed to the pool by liquidity providers in various cryptocurrencies. 

Note that the underlying asset and investor's assets will be kept 1:1 according to HydraDX's algorithm. Specifically, when investor assets are added to or withdrawn from the pool, the underlying assets (HDX) will be minted or burned in the corresponding amount. Additionally, HDX can be exchanged for other tokens within the pool and can be freely traded outside of the protocol.

In Omnipool, different crypto assets can be priced against each other because they are essentially priced against the underlying asset, HDX. This allows HDX to act as an Oracle providing price data, greatly reducing the dispersion of liquidity. At the same time, providing a rich source of liquidity will also help solve the problem of slippage. 

Bootstrapping liquidity

Liquidity plays an important role in helping transactions to be executed quickly and ensuring a smoother swap process. But liquidity will not happen by accident, community contributions will help the protocol to have an abundant liquidity pool. 

Therefore, the HydraDX team came up with the idea of ​​​​developing a "liquidity autostart" model that makes the liquidity distribution more optimal. Specifically, HydraDX chose an LBP model from Balancer instead of Uniswap's model to kickstart the platform's liquidity. The purpose of this is to make it easier for HDX tokens to be priced natively and to distribute 5% of the total supply to the community. LBP has several advantages as follows:

• This model does not need to keep the 50:50 ratio in the pool like Uniswap
• LBP has additional programmability and can hedge the price risk of volatile crypto assets.

Some other features of HydraDX

Fast Execution: HydraDX will have an order matching engine connected to the AMM through Oracle. This means that the ask and bid prices in the same block can be matched and exchanged without actually going through the liquidity pool. This is also one of the ways to solve the risk of slippage for users. In the future, this model can also be applied more widely. 

Diversity of transaction fee payment means: Investors can pay transaction fees in any cryptocurrency, not just HDX. 

Dollar Cost Averaging (DCA): DCA is an extremely effective strategy in financial investment. For absolute user support, HydraDX will execute this strategy automatically. That is, investors can use HydraDX to optimize their portfolio with continuous buying, using a DCA strategy, or automatic rebalancing of investments.

In addition, HydraDX also has some advantages as follows:

• HydraDX offers a platform with low transaction costs and high transaction speeds.
• There is compatibility with any Ethereum-based, Polkadot and Bitcoin-based assets…
• Users have one more option to make a passive profit from their idle capital.
• Users can provide liquidity with a crypto asset because liquidity must be provided in each trading pair.
• In addition, HydraDX provides a financial infrastructure for developers and their applications.

The main products of HydraDX

The HydraDX project is still in the early stages of product development. Here are the first products that HydraDX offers to their users.

Instant Asset Swap: This product has the same swap feature as AMM-based DEXs. 

Provide liquidity: Users can bring idle assets deposited into HydraDX's liquidity pool for profit instead of just keeping assets in wallet.

Bootstrapping liquidity: This product allows new projects and communities to create new liquidity pools, to ensure liquidity for their tokens.

Streaming token: Each parachain needs to accumulate DOT to maintain their parachain position or ETH to use in smart contract call/action. HydraDX integration allows parachains to purchase these assets automatically as needed without having to pay large reserves upfront, making financial operations more efficient. 

In the future, HydraDX will continue to launch other financial products such as: Borrowing & Lending, derivatives, aggregators...

The development team, the investor of the project HydraDX

Development team

HydraDX is developed by Galactic Council with the areas already built are Rust, Infrastructure, Governance. 

Investors

The project is currently being invested by major funds in the cryptocurrency market such as KR1, DFG, AU21 Capital, Berkeley Blockchain Xcelerator, CMS Holdings, Hypersphere, Tenzor Capital, Zee Prime Capital.

Project partner

HydraDX is being built to a rigorous engineering process, in partnership with Block Science. Block Science's job is to design and evaluate economic and ecosystem models based on simulation and data analysis. 

Block Science brings expertise in Token Engineering R&D and has pioneered cadCAD – an open source Python package that supports the design, testing, and validation workflows of complex systems. 

In addition, HydraDX also cooperates with Interlay and SubQuery Network projects.

HydraDX Development Roadmap

Currently, the development roadmap of the project is more than 90% complete. The project's development plan in 2022 is still being updated. TraderH4 team will update more if there is an official announcement from this project.

Overview of HydraDX tokens

HydraDX uses a 2 token model, LHDX and HDX, for the following purposes:

Firstly, by separating the token pool (LHDX) from the ownership token (HDX), the HydraDX protocol will be able to launch many programs to incentivize the investor community without necessarily granting them system administration rights.

Second, for HDX, this token will be protected from the volatile supply of LHDX. The change in the amount of LHDX will depend on whether liquidity is added or removed from the pool. If the project uses LHDX for administration, it can cause the management system to be attacked. The split into 2 tokens will also limit the options in the mechanism for controlling the payment structure of individual liquidity providers.

What is LHDX token?

LHDX is the token pool of the HydraDX Omnipool, which acts as a proxy allowing the price of all other assets in the Omnipool to be determined. This means that all transactions will go through LHDX tokens, with transaction fees paid in LHDX.

The initial LHDX supply will be distributed entirely to Omnipool. The market capitalization of the LHDX will be guaranteed to match the amount of DAI that the project mobilizes in the HDX LBP. Similar to HDX, LHDX will also be offered as a trading asset in the pool.

In addition, the limit of the LHDX token will fluctuate depending on the total liquidity in the Omnipool. When new liquidity is added to Omnipool, the protocol generates a corresponding amount of LHDX tokens. After the liquidity is eliminated, the LHDX tokens will be burned.

What is HDX Token?

HDX is the official token used to provide users with membership of HydraDX. In a nutshell, HDX holders will have ownership of the HydraDX protocol, as well as voting rights in the governance process. In addition, HDX is also used as a reward for users' liquidity mining. HDX holders will have incentives such as reduced transaction costs, lower over-mortgage rates, etc.

Information of HDX token

• Ticker: HDX
• Blockchain Network: Polkadot
• Total Supply: 10,000,000,000 HDX

HDX token allocation

• LBP on Balancer: 5% 
• Stakenet & Incentivized Testnet Rewards: 5% 
• Founding team & investors: 15%
• Liquidity Mining & Staking Rewards: 75%

Where can HDX tokens be bought and sold?

The current HDX token has not been traded on any exchanges yet. Currently, investors can earn HDX by contributing DOT in participating in HydraDX's Crowdloan event.

The future of HydraDX and should you invest in HDX tokens?

In terms of ideas, HydraDX is really a very potential project. Because, decentralized exchanges (like Uniswap) still have many shortcomings such as high gas fees, smart contracts that are less flexible than parachains, which have led to high slippage. 

As for HydraDX, there are almost no gas or transaction fees, making it more convenient to provide liquidity when just offering one asset class. This allows HydraDX to have ample liquidity and variety when they are pooled in the Omnipool. Thereby, the problem of fragmentation of liquidity will be solved by containing many cryptocurrencies in a single transaction group to make transactions more smooth.

To better understand the potential of HydraDX, investors can refer to the article " The potential of the HydraDX project " through the perspective of Mr. Kien Bui - Research Analyst at TraderH4.

Some official information channels of the project that investors can follow are:

Website | Twitter | Telegram | Discord

summary

In DeFi, DEXs and liquidity play a very important role, it ensures a seamless flow of money to promote DeFi development. Until now, all exchanges that use the AMM model have limitations such as gas fees and high slippage. HydraDX was born with the goal of solving that problem with the idea of ​​creating a single multi-asset liquidity feed. From there, applications in DeFi have an abundant source of liquidity to ensure the smoothest transactions.

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