HYDRA’s Super DAO, Economic Patch and much more| Community Vote Bundle
In just 1 year since its launch, HYDRA has traveled a unique journey. Starting as a complete underdog to what now has become a public blockchain with one of the strongest decentralization in the world. As of this moment, HYDRA has more than 600+ full nodes in more than 50+ countries that enable the security of the network to compete even with the flagman blockchain projects.
This article includes various items and proposals that are targeted at strengthening the core of the Hydra chain ecosystem as well as setting all the cornerstones to potentially elevate it to the next level. A logical continuation of everything that has brought us to this point, and the result of extensive R&D and strategic planning.
Make sure to read the entire post as it packs quite a lot of things.
In particular, we will present the following topics:
- What is a DAO and why is it important?
- Presenting the Hydra Super DAO and its organizational structure
- Introducing the Seed Wallets program for 2022 — rewarding loyal HYDRA holders with council positions in the DAO
- Announcing Limited Edition Seed NFTs to be awarded to loyal network contributors
- Proposing an Economic Patch to the LOC →HYDRA Airdrop event to strengthen the economic position of HYDRA and reward loyal network participants
- Modify the block reward structure from 20% to 25% minting rate, to utilize the newly available 5% for a sustainable model to strengthen liquidity mining, marketing budget, public development budget as well as business development — to be managed by the DAO council
- Reducing the network weight of the core nodes by 500,000 HYDRA — thus boosting on-chain APR
- Proposing the re-purposing of 18-weeks worth of burn transactions to the Liquidity Mining Treasury, to kick-start the liquidity mining program with a $50M investment budget
- Disabling new airdrop enrollments for HYDRA
- Community Vote to approve the Action Plan
Let’s start by digging into the DAO!
1. What is a DAO and why is it important?
You may have heard the term DAO before, which stands for “Decentralized Autonomous Organization”. It describes a form of organizational structure that offers the capability for a group of individuals to self-manage without the need for a centralized authority.
You can think of it as a decentralized democratic government that discusses, proposes, and decides on the direction of the network. Why is this is a good thing?
For Hydra to remain competitive and expand its ecosystem, it needs to be innovative and agile. Innovation does not happen automatically and is perhaps the most valuable asset to ensure sustainable success. However, for innovation to happen, ecosystem participants must be aligned in their vision for the network and work together to make it a reality.
This inevitably requires a number of decisions to be made and for a corresponding budget to be approved. Most blockchains out there rely on their founding teams for this, which in our opinion is fundamentally flawed. No blockchain can claim to be decentralized if its fate and future lies in the hands of a few individuals. Having a high number of nodes is the first step of decentralization, not the last one. It is just the beginning.
Ask yourself: What would Ethereum be without Vitalik Buterin? What would Cardano be without Charles Hoskinson? If you don’t know for sure, it means that these networks are still dependent on a select few.
As the seeding members of Hydra, the team behind LockTrip will always continue to contribute to the ecosystem through expertise, manpower and inspiration. However, we are not the owners of the network as Hydra is much bigger than us. We are already seeing lots of third parties working on and contributing to the ecosystem by launching new projects, new tools or by leading the community with campaigns.
This is the right spirit, which we want to strengthen through the DAO and turn it into the core of Hydra. A fully decentralized blockchain, with a sustainable economy, a self-governing DAO and a massive budget for investment and marketing.
2. Presenting the Hydra Super DAO
Hydra Super DAO will be a very unique asset putting the ecosystem ahead of most others. It would become the first blockchain to actually secure not only the infrastructure, but also critical decentralized activity such as Engineering, Community & Marketing, Business Development, and Liquidity.
In fact, we believe that any public blockchain has three pillars that are critical for its well-being. These pillars being:
- Infrastructure Security & Decentralization
- Community & Adoption
- Liquidity
Hydra’s DAO is a unique attempt in enabling the core protocol to stimulate and strengthen all three pillars.
The working mechanism is inspired by the same technology that we are implementing as part of the Hydra-Ethereum Bridge and allows for off-chain data to be utilized for on-chain decisions.
The Hydra DAO is a complex system that would combine the strengths of multiple independent components and enables them to function as a single immutable system, that is resilient against corruption and censorship.
A unique bridge between the protocol block reward formula, a set of smart contracts to govern the funds released by the protocol, a community council to manage the release of the funds via a pre-defined consensus, and the community managers that will be responsible for the execution of the operational work for each community development program.
The DAO has plenty of roles to play, with various responsibilities attached to each. Below you will find a high-level visual of the DAO’s organizational structure and economy.
The DAO Council
The DAO will be managed by a council of Community DAO Admins which will consist of trusted network participants and long-term HYDRA holders. People who have demonstrated a strong level of commitment and belief in HYDRA as a system.
Together they will vote on various chain-related topics such as the release of funds to certain projects and the recruitment of community program managers.
The council will be the heart of the DAO and protect the interests of the network, working in a pre-defined framework that would ensure robust protection against abusive behavior.
You can think of the role of the admins as equivalent to nodes. Their consensus would be necessary to make an event become a reality when it comes to DAO funds allocation. And if a DAO member acts rouge, others will be capable of removing it. There would be protective mechanisms to safeguard a healthy and effective framework for voting.
DAO Master Smart Contract
The Master Smart Contract will be the treasury of the Hydra community. It will fund all the plans and projects approved by the DAO and will itself be funded by block rewards (see section 6 of the proposal for more info). Similar to the block reward strengthening the infrastructure, the goal is the core of the protocol to strengthen the other two pillars of Hydra’s decentralized system: Community & Adoption + Liquidity.
This ensures a sustainable model where investments can be made and planned with strong financial security and predictability. Most importantly, since the Master Smart Contract is funded by a small share of block rewards, the network can invest in its own future without being influenced by the needs and wishes of capital givers.
Elected Program Managers
Program managers are technically the people who would engage in execution. They will be approved by the council through an election process. To be elected, they need to apply for the position by presenting a compelling proposal and convincing the council of possessing the right skills and experience for the job.
For example, someone could file a proposal for a program where they manage a group of influencers who spread the news about Hydra Chain. The proposal could be for a grant of $5,000 for the test-phase and include certain KPIs as a target.
If the proposal is compelling and convincing, the DAO Council can approve it and elect the proposal owner to become the manager of the program. They would then proceed to grant him the $5,000 budget for the test-phase, which will be paid from the Community & Marketing DAO Fund.
The release of the funds would require a quota and a consensus in a similar way like blockchains work. Instead of nodes, the votes would come from the DAO admins. If there is no consensus on a funds release, then the release would be impossible. The smart contract will decline and will reverse the funds back into the treasury.
The program manager would subsequently have the task to reach out, recruit the influencers, perform follow-up tracking and organize anything else that may be needed. After the test-phase, the program manager needs to submit a report on his performance to the DAO, which will then decide whether to continue by retaining the program manager with the relevant program and potentially increasing its budget.
Liquidity DAO Fund
This fund will focus on managing the liquidity mining program for the Hydra DEX and capitalize the liquidity mining smart contracts for each pool.
Only whitelisted pools can apply for liquidity mining. The block reward will distribute a fixed amount to a predefined smart contract, which would subsequently be distributed the allocated budget to the pools that are critically important for the growth of the Hydra ecosystem.
Community & Marketing DAO Fund
This represents the marketing department of the Hydra ecosystem. The upcoming Social Media DAO currently in development will be just one part of this and is an example. However, anyone can propose an alternative to our concept and put it into execution. Who knows what the innovative and creative force within the Hydra community will come up with? Among the fundamental goals, the DAO will aim in unleashing the unique skillset some of our members possess.
The DAO could fund dozens of different programs with their own managers and let them compete or work in synergy.
Development DAO Fund
Now that the DAO marketing campaigns would be on fire, we need something to market, right? Developers and project owners can propose to develop a certain APP, DAPP, website, tool or a token-based project. If approved, the DAO can schedule milestone-based grant releases.
Even protocol development could be included in this program, as code management tools such as Github make it fairly straightforward to track the commitments and contributions of individual engineers. Bitcoin for example is a project entirely managed by public contributors.
There could be different roles, such as reviewers, QA, and lead engineer who is the program manager. All working in a decentralized environment that is unified by communication tools.
Business Development DAO Fund
This section focuses on tasks such as exchange integrations, wallet integrations, partnerships, and the onboarding of new projects.
3. Loyal HYDRA Holders to Seed the DAO Council
Joining the council comes with plenty of responsibilities as the DAO will manage annual budgets in the $ millions and make important decisions about the future of Hydra.
Hence, the seeding council members will be selected among loyal HYDRA holders who have proven their commitment to the ecosystem. People who have demonstrated support to the network in both good, bad, and challenging moments of its seeding. The loyalty will be measured by snapshots taken over a 1-year period which will extend beyond the moment of conclusion of the Airdrop/Main distribution event.
Holding HYDRA, staking, and liquidation behavior will play critical roles in the evaluation (no worries, it won’t be an exclusive party for whales). Also, liquidation behavior during the airdrop for LOC owners will specifically be taken into consideration.
We will soon announce more details about the Council Snapshot Program.
4. Limited Edition Seed NFTs
In addition to the council position, loyal supporters will be awarded seed NFTs which will be minted in limited numbers based on the contribution of individual wallets. The observation period for it will start on January 1st 2022 with more details to be shared as part of the Council Snapshot Program announcement.
Seed NFTs will prove your contribution to the network in its early stages and will be unique items.
5. Economic Patch to the Airdrop Program
The HYDRA airdrop was launched on April 1st and has since completed 64% of its planned duration. During this phase, hundreds of new nodes were seeded and the network grew considerably.
The design of the airdrop has always been special as it allows for a very gradual release and strong protective criteria against dumping. Data of the past 32 weeks shows that the goals were achieved and in some areas even surpassed. Below we will share some highlights:
- Only 9.95% of airdropped HYDRA were moved out of airdropper’s wallets, which means that 90.05% continue to be held or staked — representing a very strong core
- As per this week, 70.5% of participants hold same or more HYDRA than they received as part of the airdrop
These are extremely encouraging statistics and we are incredibly thankful to all of our loyal supporters.
Unfortunately, the data also shows that there is a small number of participants who liquidate a disproportionally high amount, which is understandable as not everyone can have the same goals and expectations in life.
However, with the project progressing in development and adding community members on a daily basis — and given that 64% of the distribution is now complete — we believe that it is time for these individuals to make a decision.
From a network perspective, it does not make sense to continue sending HYDRA to individuals who demonstrate no intention of keeping them and participate in the airdrop only for the purpose to have short-term benefits. Hence we are proposing a new linear penalty formula of 2% for every base % liquidated that would affect future airdrop income.
To elaborate more:
Base amount = The combined amount of all snapshot income so far
Example 1) If someone received 500 HYDRA so far, and he liquidated 250 HYDRA, that would represent 50% of base amount. That participant would no longer receive future airdrops (penalty of 50 x 2% = 100%).
Example 2) Someone who liquidated 20% of the base, would imply that the same person liquidated all staking income and the 20% of the base that was airdropped. As a result, the same person would receive 20 x 2% = 40% less in future snapshots.
Example 3) Someone who has held to the base received amount and liquidated only his/her staking income, would be at the same amount as the base received amount. As a result will not suffer any penalty ( 0 x 2% = 0%)
The fundamental presumption of the new penalty lies in the fact that Hydra is a high APR blockchain, and as such, the liquidation of all staking income alone during this high APR phase is generous enough on its own as the purpose of the Airdrop is to establish the node infrastructure and not to be a tool for speculation.
As part of the proposal, we are also proposing a 2-week pause on the airdrop to give everyone sufficient time to adapt to the new rules. In that 2 week period, the few affected participants will have the opportunity to restore their balances and avoid the penalty rule. The penalty will be calculated with each snapshot separately.
This will effectively replace the minimum balance requirement.
At the current state possible outcomes of the change are:
- All participants to restore their balances for 100% continued airdrop for the last 18 weeks
- No participant to restore balances and taking on the penalties, which would result in more HYDRA burnt and less HYDRA sent to people who arent committed to the long-term goals of Hydra.
In our view this is the fair thing to do, in the interest of not only non-airdroppers but also in the interest of the overwhelming majority of airdrop participants who proved immense loyalty throughout the process.
6. Deploying the Economic Powerhouse
As explained in section 2 of this proposal, the DAO would be funded and powered by a small share of the block rewards (to be integrated as a protocol-level feature into the chain code).
In order to achieve this and make the DAO fully independent from external capital-givers, we are proposing an increase of the minting rate from 20% to 25% and awarding the 5% difference to the DAO Master Smart Contract as a fully automated and permission-less mechanism.
The DAO can then allocate the budget towards the individual funds of marketing, engineering, business development and liquidity mining. Calculating at current rates and a price of $20 per HYDRA, this would represent a $23M investment budget annually.
There will at no time be any obligation to spend all the budget. The DAO can always decide to burn excess HYDRA that is not needed.
The 5% additional inflation will be protocol hardcoded to be locked inside the DAO Smart contract and will not affect the circulating supply. On the contrary, its effective utilization in critical and strategic growth programs should generate a magnified value/demand impact on the ecosystem. The only way for funds to be released is with the explicit voting of the council that would mandate a consensus.
7. Reducing the Staking Weight of the Core Nodes by 500,000 HYDRA
At current state the core nodes have a total weight of 2,000,000 HYDRA and therefore are pretty much aligned with the 25% target share of the network announced back in early 2021.
We are now proposing to drop their share to 20% for a duration of 6 months — to further boost the APR across the network.
8. Securing $50M Budget to Kick-Start Liquidity Mining with a BANG
As many of you will know, we are planning to deploy a unique combination of single-sided DEX pools and a powerful liquidity mining program, which will set the Hydra DEX apart from the rest of the competition.
Who doesn’t want to provide liquidity into a high-APR DEX pool with single-asset exposure and a mechanism that eliminates the risk of impermanent loss?
While the program is still in development, it would be strategic to plan ahead and secure a powerful budget to start off the Hydra DEX with a BANG.
For this goal we are suggesting to repurpuse the remaining 18 weeks worth of burn transactions and redirect them towards a dedicated liquidity mining pool. The liquidity mining fund would have an estimated $50M size at current market rates and be used for that purpose exclusively.
The fund would be used during the first few years of operation to elevate the Hydra DEX into the top league and boost the TVL (Total Value Locked Up) considerably.
At the same time, the HYDRA that get locked up as liquidity inside DEX pools (by liquidity providers) will boost the chain-wide staking APR as they won’t be competing for staking rewards.
If the proposal gets approved, we will be replacing the weekly burns with weekly liquidity reserve allocations publicly and share the Hydra wallet address so that everyone can verify the budget. That budget will remain out of circulation and will either be utilized for attracting new capital into the DEX, or it could be voted to be burned subsequently in case the DAO decides so.
Making this decision now, while the airdrop is still going is a unique opportunity due to the excess amount of HYDRA scheduled for immediate burning.
9. Disabling new airdrop enrollments for HYDRA
As the most part of the airdrop, execution has passed already, at present, more than 90% of all LOC had been swapped and new enrollment activity is extremely low. This can also be tracked from the public sheet.
Considering the success of the airdrop and the matured stage of the node decentralization of Hydra, we believe that the moment has come to suspend new enrollments.
This would also protect against corner-case speculation in which some users may try to execute a strategy to sell HYDRA only to buy LOC which needless to say is fundamentally against the principles of building the core of Hydra.
10. Please participate in the Voting Process!
Now it is your turn! If you like the above bundle of packages and features, you can vote with ‘Yes” on the following:
Do you approve the following set of features:
- Approve the design, engineering, and implementation of the HYDRA Super DAO protocol upgrade
- Increasing block reward from current 20% to 25%
- Funnelling the extra 5% of the block reward increase to the DAO, which would be secured by a smart contract and a strong requirement for consensus among DAO council of loyal members
- Seed node staking capacity to be reduced with 500,000 HYDRA for a period of six months
- New Penalty formula that would penalize airdrop members 2% penalty on future airdrop income, for any 1% that they liquidated below the base amount that they had received
- To disable new HYDRA airdrop enrollments via LOC (does not affect any existing enrolled members)
- Repurposing the remaining weekly burns for a powerful Liquidity Mining fund that would exclusively be used for onboarding additional capital on top of Hydra Dex
If you approve the proposed action plan, please cast your vote in the official Telegram group of Hydra. The Vote will be publicly visible and will be executed via a pinned telegram poll
Please note that only community members who were part of the group before the announcement will be eligible for voting. Members who join the group after the announcement will be filtered out from the final vote counting to prevent interference by bots and fake accounts.
If we detect any breaches in this rule, we will transparently document every single vote filtered out.
Regardless, everyone is invited to join the conversation!
👉 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
