With a new year ahead of us, we welcome you to the Hydranet Recap of 2023! A testament to a year of resilience, organic growth and a drive to innovate. Ebbs and flows have been overcome by adaptability and unwavering commitment by the team and community alike. Through this recap, we will reflect on the milestones achieved and the challenges overcome in navigating the ever-evolving terrain of the crypto industry. Join us as we celebrate successes and make ourselves ready for a new year! 🎉
From vision to reality — Hydranet Core DEX
As we entered 2023, back when the token ticker was still “HDX”, the Hydranet Core DEX was still only available as an early testnet build to some of our community members. The aim was steady as ever and a roadmap to the “Phoenix” release had just been revealed: The Core DEX was set to be released on mainnet later this year. Although there was no set date, our team was locked in on the target and during the first quarter of the year a lot of ground was broken. The first arbitrage trades between the Hydranet DEX and WhiteBit were conducted on testnet, and in the background, watchtowers were being developed for the Connext state channel protocol. With eyes on the Phoenix release it was crucial to get everything running smoothly. By the end of the first quarter, cross-chain channel rentals was implemented, enabling users to rent liquidity on a distant chain using funds in an already opened and funded state channel on the primary chain. Also, the important aETH/BTC trading pair was added to the orderbook.
Entering the second quarter, we were happy to see that Linux support for the DEX had returned, but bigger things were brewing; real things. What do we mean by that? On May 25th, Ethereum got a first taste of the Hydranet DEX as the first ever swap was conducted on mainnet, trading aETH for HDX, within Arbitrum One. After this initial success, the testing on mainnet would only increase moving forward, but remain internal for the time being. During the same period of time, the in-house developed Vortex bot was getting increasingly stable in operation with extremely high success rates for swaps. For those not familiar with Vortex, it is a combined grid-liquidity providing bot and an arbitrage bot that will be crucial to the Hydranet DEX in the early phases and at other times of low liquidity, to ensure that there is enough orders (liquidity) and that the price is synced fairly with other exchanges. Eventually it was decided to push mainnet testing to our community, and a dedicated group of members was formed as the Phoenix testgroup. Their dedicated testing would prove extremely valuable and would become the reason for many updates to the platform to come. The second quarter concluded with a win for our development as the first cross-chain swap, aETH/BTC, was completed.
By July, things got really busy and the DEX saw many updates, again thanks to the testnet group which had now expanded to 15 participants. The Hydranet token contract was during the same time swapped to a new, modern and minimalistic solution, as well as the ticker update from HDX to HDN. Do not worry, we will cover this topic in depth later on in this article! Not much later, after the token swap, it finally happened! A date was decided and announced for the anticipated Phoenix release, namely 23rd of September, accompanied by a release trailer.
By August, more than 1500 successful trades had been conducted in the closed beta and the tension for the Phoenix release was building. A few updates were implemented, bugs fixed, and some exciting statistics were exposed through an API developed by our team.
The day was finally here! The arrival of 23rd of September came surprisingly fast and expectations were high. The entire team was working due diligently during the days leading up to the event to ensure everything was up to par with expectations. A release AMA was held, with a DEX showcase, of which you can rewatch here. The Hydranet Core DEX was finally available for public access. The release was accompanied by the Phoenix Release Article that you can revisit here!
Releasing the first ever public mainnet version of Hydranet Core DEX was a pivotal moment for the entire project, maybe even the crypto industry as a whole. The first public, cross-chain decentralized exchange on Layer 3 was live. The release of the Core DEX marked a huge leap for us, as we finally could prove that our concept was becoming reality, that we actually can deliver a new kind of trading experience to the market. Albeit still in beta, interlinked trustless trading between the Bitcoin and EVM blockchains is finally here. More than feats of technicals, the Phoenix release was also a testament to the community that our team is dedicated, serious and do deliver on our targets.
Moving along, as trading on the Hydranet Core DEX went well, already a couple months after release the trading limits on the Core DEX could be raised ten fold, from $100 to $1000, to further put pressure on the software and our one-of-a-kind backend system that is the Hydranet Network. By the end of November, our team also released a DEX stats page, highlighting the current performance of the Hydranet Core DEX, and by the end of December, we could see the Hydranet Core DEX surpassing the 1 Million USD trading volume. Although a significant portion of this trading volume is attributed to our team’s market maker bot, it serves as compelling evidence that our product is working as intended, with the bot achieving a close-to-100% trading success rate.
The Core DEX is a huge step for Hydranet and it is the vision realized! However, it is only the first testament of our journey and it will prove to lay the foundation for our next, modernized iteration of the Hydranet DEX concept, as you will see.
From reality to future — A Web DEX on the horizon
How many times haven’t we seen questions in the community of when there will be a web-based version of the Hydranet DEX? Each time, the response has been the same — running the Hydranet DEX in a browser is not possible. And indeed, this hasn’t been possible, until now.
You see, our DEX is not like anyone else’s. Our DEX is unique. It employs off-chain networks to liberate us from the constraints of Layer 1 and to facilitate seamless cross-chain swaps, all while upholding the principles of non-custodial trading. But for it to do so, it needs to offer a gateway into the off-chain networks, which is typically accomplished via off-chain nodes. Such nodes are included in the Hydranet Core DEX and run everytime you open the desktop client. However, the implementation of such nodes in a browser environment had yet to be realized and was a showstopper for a web version of the Hydranet DEX for a long time.
A lot of effort during 2022 and early 2023 was put into researching the feasibility of a Lightning Network browser node. No such solution existed on the market, but is a crucial element for our product to align with the simplicity of opening a preferred browser on any platform and directly accessing the Lightning Network. In the first quarter of 2023 it happened, our team successfully accomplished the first Lightning transactions using a Lightning Network browser node as well as routed transactions via non-browser nodes to test its compliance with the Lightning Network as a whole. While there currently isn’t much discussion about EVM off-chain browser nodes, it’s essential to note that such nodes already have support for running in a browser, which underscores how much of a breakthrough it was enabling browser nodes for the Lightning Network!
The breakthrough involving the browser nodes was just one aspect of the significant development leading up to Day X on the 10th of October, during which the Hydranet Web DEX was disclosed for the first time. Commencing towards the end of the first quarter of 2023, our focus shifted towards enhancing the EVM operations of the Hydranet DEX. It was obvious that an improvement was needed as our current off-chain solution for EVM chains, the Connext Vector protocol used in the Hydranet Core DEX, fell short on meeting the very requirement of decentralization. In response to this shortcoming, our team initiated the work on what is today known as the Lithium protocol, which is Hydranet’s in-house developed solution for EVM off-chain transactions.
All the above mentioned aspects of the Web DEX, its roadmap, and more, were disclosed during the Day X livestream on the 10th of October. Around 80 participants tuned in for the livestream but in case you forgot, you will find a recording of the livestream here and also an article covering the Web DEX announcement here.
The last glimpse of the Web DEX this year was seen during an AMA session with Wolf of Alt Street. During this AMA the Web DEX was put to the test as Bitcoin state channels were opened and Bitcoin off-chain transactions were conducted live, directly from a browser of course. Moreover, the session provided an opportunity to check out the sleek frontend for the Web DEX which had been, and still is, under development for the past year.
A recording of the AMA with Wolf of Alt Street is found here. Community members eager to experience the current state of the Web DEX need to exercise just a bit of patience though, as the wallet component of the Web DEX is aimed to be released on public testnet during Q1 2024.
From the future to a vision — Decentralization on its way
Towards the end of 2023, our journey toward decentralization reached a significant milestone with the introduction of two key updates: the proposal of the Hydranet Network and its operators, and the establishment of the Hydranet Foundation.
The Hydranet Network made its debut through the latest tokenomics update, which was approved through a DAO vote on the 6th of December. This marked the third DAO vote related to tokenomics updates within the year, underscoring our team’s commitment to update all aspects of Hydranet as the development of our flagship advances. The latest tokenomics update not only introduced the Hydranet Network but also its essential components — Titans, Guardians, and Lithium Liquidity Providers (LLPs). These entities are envisioned to play a pivotal role, serving as the important infrastructure behind the Hydranet DEX.
Despite being in the early design stages, the tokenomics proposal suggests a future where individuals can actively operate these entities by collateralizing a specified amount of HDN, Hydranet’s native token. In return for their services, these participants would be entitled to a share of the trade fees generated on the Hydranet DEX.
On the DAO front, a significant development unfolded on the 20th of December when our team received news that the Hydranet Foundation, officially named Hydranet Off-Chain LTC., had been formally established in the Cayman Islands on the 12th of December. This legal entity will serve as a protective shield for the Hydranet DAO, reinforcing our commitment to transparency, trust, and the future of our community.
With the establishment of the Hydranet Foundation, a Hydranet Forum is also on the horizon. This forum is aimed to become a hub for Hydranet DAO’s proposals, providing a platform-agnostic space for members to submit proposals and actively participate in discussions.
A brand new token
Our token also saw major changes throughout 2023. Starting in February, when our token was still relying on the old OHM contracts and had staking options, the staking APY was lowered to 0% as a measure to stop diluting our token. Our team was simultaneously preparing a new token contract, to move us away from the overly-complex OHM contracts. In conjunction with this development, the community was asked if the token ticker, HDX at the time, should be changed to something else, more unique. By the end April, it was decided — our new token ticker would become HDN.
By the end of May, the new token contracts hit the Goerli testnet and were rigorously tested by both team and community. Contract wise, the new token contract was built using pre-audited and well-known ERC20 libraries from OpenZeppelin. This design was decided upon in order to avoid unnecessary complexity and thereby potential risk vectors.
The token swap finally happened in the beginning of July. The swap itself was conducted as a classic 1:1 snapshot and airdrop, and to our delight, the exchanges trading HDX at the time were going to support the swap, meaning no user interaction was needed. Liquidity providers on the other hand were notified weeks in advance to pull their liquidity from Uniswap, to be accounted for in the airdrop. Then, right before the actual snapshot, all trading was halted manually by the big exchanges, after which the new token, HDN, was distributed to all token holders by our team.
Just a few days prior to the token swap, the contract audit, made by SourceHat, concluded successfully. This was an important process to have passed, to ensure newcomers and long-time holders alike that we prioritize the security of user funds and our token. The results from the contract audit can be found here.
Project Growth Highlights
Our flagship, the Hydranet DEX, not only achieved substantial progress throughout the year of 2023, but the broader scope of our project also experienced remarkable advancements. From engaging in multiple AMAs to issuing press releases and organizing listings on new centralized exchanges, Hydranet witnessed continuous growth from beginning to end of 2023. Let’s take a moment to revisit some of the key moments that have defined Hydranet’s expansion over the course of this year.
Beyond the routine Google ads across various nations, our visibility gained momentum in May when we were featured on the Lightning Dev Kit website, particularly following the early research and development of the Hydranet Web DEX. Lightning Dev Kit serves as the provider of Lightning Network implementation packages integral to the Hydranet Web DEX. Notably, one of our developers, Fedeparma, has made substantial contributions to the development of these packages and is to thank for this recognition.
June finally brought the well-deserved rank for Hydranet on CoinGecko. Though we had to wait until November before CoinMarketCap admitted our rank, as their requirements are more strict. Moving into July, we witnessed two exciting developments contributing to the growth of our project — DemoDay and increased influencer recognition. DemoDay, hosted by PitchTalk in collaboration with WhiteBit, presented an opportunity for our team to showcase Hydranet for a broad audience. Each participant was given 10 minutes to demonstrate their project, 10 minutes of questions and 5 minutes of general discussion, which provided valuable exposure and engagement for Hydranet. Later that month, we established close communication with a large number of influencers, which yielded even more awareness of our project. These influencers have created a large number of youtube videos, blog articles and tweets about Hydranet.
Following the release of the Hydranet Core DEX in September, the team released Hydranet’s first press release. This press release was published across 75+ outlets, including Cointelegraph and Yahoo Finance and can be read here. During the month of September a brand new Centralized Exchange listing was also being prepared. This listing did not go live until October and because of a non-disclosure agreement, the team had to go quiet about this event until just a few days prior to it. Our token, HDN, successfully launched on MEXC on the 28th of October and showed an impressive $340,000 trading volume during the first 24 hours. However, this accomplishment was short-lived, as the subsequent month of November witnessed the breaking of the $1 million daily trading volume mark. Now imagine these numbers on the Hydranet DEX!
Undoubtedly, 2023 has proven to be an exhilarating year marked by significant growth for Hydranet. Take a moment to reflect on where we stood just six months ago. At that time, our token was held by 1500 unique addresses and we held no rank on either CoinMarketCap or CoinGecko. Fast forward to the present, and we are now over 2300 proud token holders — an increase of over 50% since the token swap mid July! Furthermore, our token currently holds a ranking in the range of 700–800 on CoinMarketCap and a market cap of close to $20 Million. The journey from then to now underscores the remarkable strides we have made as a community. The author of this article is very proud to be here among you all and proud of the progress we’ve made together!
Happy new year!
To stay updated or ask any questions you have: Join us on Discord and follow us on Twitter to stay up-to-date with our latest news and developments.
Make sure to check out our website: https://hydranet.ai
