HYDRA Ecosystem Update — September 2022
Today we are happy to share another ecosystem update with you. So many things are going on and we can’t wait to present the progress.
LYDRA and Hydra 2.0
Following the announcement of Hydra 2.0 along with an updated whitepaper, our team has made great progress towards turning it into reality.
Work on the LYDRA design has advanced and we are progressing with the technical implementation as we speak.
Critical problem-solving work has been completed for both the design and architecture of the LYDRA system, with only few details left. At current trajectory we are aiming to launch a Devnet prototype by mid-October.
Hydra Testnet & Bounty
On the 13th of August, we initiated enrollments for a 4-week public testnet period as a final step before the major protocol upgrade can be safely merged with the mainnet.
The upgrade includes a faster block time (32 seconds, down from the current 128 seconds), the much anticipated delegated staking feature, an upgrade of the EVM version, and many other improvements.
For the past weeks, we have continuously been collecting data and assessing the stability of the testnet under various conditions. The analysis shows that the network has been stable throughout the period, with the rate of orphan blocks staying steady at low levels.
While things are looking promising, due to the limited time, a few of the experiments/observations on our checklist couldn’t be completed yet. Therefore we announced the extension of the campaign by one week (until September 17).
Following that, we will be making all necessary preparations for the merge with mainnet. The date of the merge is not defined yet, however we will make sure that stakers and applications have sufficient time to upgrade their nodes in advance.
Hydra DEX & DeFi
In the month of August, we made a major deployment to the Hydra DEX that enabled the migration of the manually managed liquidity mining campaigns towards a fully automated and much more advanced system.
Starting with September the 1st, the old system was discontinued and the new system took over fully. You can participate in the liquidity mining though the “stake” section below:
The following pools are currently supported:
- ETH/HYDRA
- DAI/HYDRA
- WBTC/HYDRA
The new system allows for a much smoother experience and overall ease of access. The campaigns can now be reached through multiple applications and interfaces with less friction, which should improve the capital efficiency for current and future campaigns alike.
In the future, these DeFi elements will be further leveraged and expanded by third-party projects such as ChangeX. Thanks to the decentralized natue of the exchange, anyone can build additional derivative products on top of the existing ones.
Mobile Staking
A universal token-based staking feature has been enabled for the mobile Hydra wallet, which offers a seamless one-stop solution for all Hydra DeFI products. ChangeX has been the first asset to be supported and has proven as a valuable partner. The different parts of the HYDRA ecosystem have been validated for their capability of generating a strong network effect interlinking liquidity, on-chain activity and overall performance.
Performance Upgrades
The Hydra DEX analytics page info.hydradex.org has undergone a series of performance and stability upgrades. These include optimizations to the database and source code, as well as a major infrastructure upgrade with custom load balancing logic and a hardware cluster of servers. With the improved setup, we are now capable of supporting high-scale traffic and activity.
As a result of the upgraded backend, loading times were reduced by more than 90%!
Similar upgrades were made to the backend of the explorer. These include not only the load-balancing logic between a cluster of servers, but the performance is additionally enhanced by having multiple Hydra nodes available to source real-time data directly from the blockchain.
Liquidity Ecosystem
We are thrilled to announce that we will soon be adding several additional assets to the Hydra DeFi ecosystem. These will be multiple stablecoin pools with liquidity mining incentives, marking an important milestone towards establishing support for a wide range of stablecoins.
The supported assets will be
- USDC
- USDT
- BUSD
Supporting all three flagman stablecoins will allow users to enter into the ecosystem with less friction and a significantly reduced cost for cross-stablecoin conversions.
Liquidity on Hydradex.org also peaked at a new ATH of $3 Million on July 25, which comes as a result of the increased activity generated by the ChangeX project as well as liquidity onboarded onto the ETH, DAI and WBTC pairs.
Hydra Bridge
On the bridge front, a major upgrade was recently implemented, improving the stability of the Hydra bridge to achieve a massive 95% reduction in downtime.
As of today, the bridge has operated without technical support inquiries for a record streak of 40 days, which is a vital step in the direction of scaling the interoperability.
The upgrades included infrastructure improvements as well as the deployment of multiple process management and failsafe mechanisms to handle corner case scenarios.
This has all been built thanks to the valuable feedback we received from our community!
Industry-First Defenders
In parallel to the major stability upgrade, we have been working on the next version of the Hydra bridge. The new design boasts a first-of-its-kind defensive layer, which is tasked with a secondary cross-check to ensure that the lockup and release events always have perfect symmetry.
Introducing the bridge defenders: a revolutionary step forward in the security enhancements of how current cross-chain bridges work.
Changing the narrative from “let’s hope the bridge doesn’t get compromised” to
“if the bridge gets compromised, we will have the tools to decline the rogue transaction”
The defenders are invisible parties in the bridge architecture, which remain in constant surveillance of every single event. To put it roughly, a cross-chain swap has two events. A lockup/burn event on the sending chain, and a release/minting event on the receiving chain. As a rule of thumb, a perfect symmetry should always be present. The exact amount locked up on the sending chain should always match the exact amount released on the receiving chain.
All current bridges focus on ensuring there’s a strong consensus among all observers that vote for the validity of these events. However, when there’s a security breach, in most cases, an asymmetric combination of events takes place. Let’s look into an example together.
Normal Circumstances:
1) Sending Chain -> Locks 10 ETH
2) Receiving Chain <- Releases 10 ETH
The end result is zero-sum and the collateral always matches the pegged asset.
In a Security Breach:
1) Sending Chain -> Locks no ETH
2) Receiving Chain <- Releases 10 ETH
The observers that place the votes, if compromised, would reach a consensus regardless of the mismatch and with all current existing bridges, this would be an irreversible scenario. Alternatively, if there is a fault in the consensus mechanism, again a manipulated release vote without the preceding lockup would take place.
With the new version of the HydraBridge, the flow would seem like this:
1) Sending Chain -> Locks 10 ETH
2) *New* Mandatory [15-minute] time-lock delay for objections starts. During this cooldown, there will be multiple blocks of opportunity for any defender to object to the transaction.
3) All defenders would silently double-check the votes in the background and make sure that the Sending Chain has indeed locked 10 ETH as part of the execution proposal.
4) If there is no objection and Lock amount = Release amount -> Proceed with the release
If there is an objection during the mandatory cooldown -> immediately drop the transfer.
Since the delay is mandatory, it technically exposes the attacker without any possibility for him to counter-react the denial that would come from the defenders. More importantly: A denial would be nearly free to the defender, while the attack would be significant as cost and risk to the attacker. Thus the risk/reward vector turns negative.
Almost all security incidents related to bridges arise from an asymmetric combination of lock and release amounts. Therefore the efficiency of the defenders should be high, as the focus will not be on the causes of the issue (which can be many), but rather the outcome that would be evident in the blockchain.
The defenders will be completely automatic and independent applications, that run on Linux and would be off the radar to the hackers/attackers.
Therefore it would be near-impossible to counter them as they would strike from the dark. This is an important contrast to the observers, which are always active and continuously exposed due to their voting activity for every single transfer. Being exposed and predictable in behavior makes them a much easier target for attackers.
Since the defenders have no other authority but to drop a transaction, they don’t pose new attack vectors. The maximum risk is the inconvenience of a compromised defender dropping a legitimate transaction which would not lead to any financial risk (other than a small delay in execution). Such an event would immediately be spotted and the respective defender could be easily blacklisted, thus losing its eligibility for future participation.
Our goal is to give eligibility to various members to be capable of deploying their own defender nodes with the possibility to earn up to 5% of a potentially prevented rogue transfer (with a minimum of $1000).
For example, a single $1M transfer that would be validated to be rogue (attackers usually try to broadcast large transactions at once) could yield a bonus as high as $50k to the defender that stops the transaction. By combining technology with governance, we plan to establish a resilient system that could set new standards for the industry. The bridge could become a valuable asset to the HYDRA DAO and even be utilized as a tool for partnering with other projects.
As of today we are happy to report that the coding work on the defenders has well advanced.
We are also exploring the opportunity of expanding the bridging capabilities towards the Binance Smart Chain, in order to boost the interoperability further and enable flow of capital.
Hydra Chain Treasury Council
We’ve managed to fork, adapt and integrate an iteration of Gnosis Multi-Sig, that will be the fundamental platform for the first iteration of the HYDRA DAO. The DAO will be capable to propose payment transactions, binded with their relevant discussion thread in the governance forum.
Eligible members of the DAO council will be able to cast their votes for the various initiatives. Gnosis is an advanced multi-sig technology that comes with an extremely easy-to-use user interface. Together with the Gnosis HYDRA DAO we will soon be deploying a forum that will allow for structured proposals and evaluation of various ideas that can be crowdsourced.
The modified version of Gnosis will have an oracle contract capable of proposing new council members based on on-chain data.
The initial logic would work as follow:
A. Adding a new council member
- One of the current council members proposes a public Hydra address to the SnapshotOracle contract as a new council member
- The SnapshotOracle has a predefined logic with a set of eligibility criteria for new members, which are:
- Check balance of new suggested member > XXX HYDRA to be eligible for council member role
- Check if new suggested member has at least 6 months of staking activity (most likely 12 months) by implementing an HRC20 token with a snapshot mechanism
3. When above criteria are met — new suggested member automatically becomes one of the Safe “owners” (council members). If the criteria are not met, the proposal for the suggested member is reverted.
B. Removing an existing council member
- One of the council members proposes to the SnapshotOracle contract the removal of an existing council member (or himself)
- The SnapshotOracle has a predefined logic with a set of eligibility criteria for the removal of existing members, which are:
- Check balance of current suggested safe owner < XXX HYDRA to be eligible for removal.
- Check if current suggested owner has at least 6 months of NON-staking activity
3. When the above criteria are met — the current suggested member automatically loses the whitelisted role, if not met current suggested member keeps the role.
Anyone will be capable to list a proposal in the forum, irrespective if they hold HYDRA or not.
It will be up to the Council members to place a vote. The current system will likely create ~100 council member seats for the most committed members which should be a very good representation of the consciousness and good faith of the HYDRA ecosystem.
HydraDex Visibility
One of the challenges that we’re working on is to enable tracking of the Hydra DEX on Coingecko and Coinmarketcap. We’ve made good progress with Coingecko and are confident that the issue will be resolved there in the near term. Our team has worked in enabling all API endpoints as well as supporting the integration process.
While CMC is still lagging behind in execution, we are making a continuous effort in resolving this issue with them as well. This update is to make sure our community is aware that we have this among our top priority as it can open the visibility for current as well as future projects that take part in the Hydra DEX and HYDRA ecosystem in general.
👉 Join the Hydra Community
HYDRA is a proof-of-stake blockchain optimized for real-world businesses. It tackles some of the most profound and challenging issues with existing blockchain economies and introduces a truly shared economy with fair treatment to all network participants. Some of the more notable features:
🔥 100% Burn of all Transaction Fees
💎 50% Royalty on Gas for Smart Contract Creators → More Info
📌 Fixed Coin Transaction Fees of $0.20 → More Info
📌 Fixed Token Transaction Fees of $0.50 → More Info
💰 20% Minimum APR Staking Income → Staking Calculator
📈 Up to 540 TPS Elastic Capacity
🔏 EVM Compatible Smart Contract Platform
⚙️ Wallet-Level Scalability → More Info
🗳 Unique Decentralized Governance Protocol
