HydraDX 2023 RoundUp — Achieved Milestones January 2023/January 2024
Omnipool is 1 year old!
Despite HydraDX being a mature project in the Polkadot ecosystem (with three years under its belt), the actual launch of Omnipool didn’t take place until January 6, 2023.
This means that after more than two years devoted to refining technology and fine-tuning infrastructure, HydraDX was finally unleashed into the open liquidity ocean. More excitingly, it’s now time for the development team to deliver features and integrations to Omnipool, which promises to be the most intriguing part. Let’s recap the past year’s rollouts and see what was achieved in Omnipool’s first year of existence. (January 2023 — January 2024)
Omnipool listings — Hydrate Your Treasury
An elegant way and trustless way to provide liquidity from parachain treasury via cross-chain XCM into the HydraDX Omnipool as an LP position controlled by its governance. All liquidity deposited into the Omnipool remains in controlled by the parachain sovereign account. That way, Polkadot parachains can simply receive an access to whole Omnipool liquidity and assets by transferring a tiny portion of their treasury, no market makers fees, no need to provide 2nd pair of asset (DOT or USDT).
What’s more, treasuries can even earn on trading fees and diversify these trading fees into USDT to pay out salaries to their teams. Brilliant and efficiently!
Already onboarded: Zeitgeist, Astar, Centrifuge, Bifrost, Moonbeam, Interlay, Subsocial, Phala.
In process: Kilt
Omnipool trading features
What’s been delivered?
OTC Trading ✅
OTC Trading allows users and even protocols to put sell/buy orders, so other users on HydraDX can fill these orders. For example, even HydraDX protocol itself put orders to exchange stablecoins (Wormhole Acala -> Wormhole Moonbeam) with a premium to diversify its POL.
Liquidity Mining ✅
This feature allows for the distribution of rewards to deposited LP positions in the Protocol to incentivize users to add liquidity into the Omnipool to grow the TVL and provide more effecient trading with less slippage. Multiple farms can be set up to reward the same LPs — e.g., HDX & BNC rewards for providing vDOT liquidity in the Omnipool, juicy isn’t it?
DCA and Split Trading ✅
We already talked about DCA in our previous article and videos. It allows to gradually accumulate an asset over specific period of time without incurring major slippage and achieving better average pricing. Protocols can also leverage this to diversify their treasury holdings. Moreover, after the referendum has passed, Polkadot Treasury has been diversifying (Polkadot Fellowship salaries via Omnipool using its Treasury sovereign account and sending USDT to Asset Hub, fully trustlessly and automatically. Beauty of HydraDX and XCM.
Dynamic Fees ✅
This feature allows the Protocol to charge varying fees based on volatility (via price and volume oracle data), increasing profitability for LPs, including HydraDX’s POL position, which are hit harder in volatile trading environments. Thanks to dynamic fees, now the referral program is launched (similar to CEXs ref links) allowing community spreading the word about Hydra and earn extra rewards, but also HDX stakers now receive between 10% and 50% of the asset fees from all other trades non-HDX (HDX trading fees are fully distributed to stakers already).
Stableswap pools ✅
This feature allows for the creation of Stableswap Pools — closely pegged assets traded based on a different invariant curve (similar to Curve Protocol) — within the Omnipool. This is most ideal for stablecoins and like-paired assets (e.g. WBTC<>iBTC).
Currently, there are 3 stablepools launched on HydraDX:
- 4-Pool: USDT (Asset Hub)/USDT (MRL)/DAI (MRL)/USDC (MRL)
- 2-Pool: iBTC/WBTC (MRL)
- 2-Pool: USDT/USDC (Asset Hub)
XYK (Isolated) pools ✅
This feature implements the XYK pallet from Basilisk onto HydraDX, allowing permissionless trading pool creation. XYK or isolated pools can serve early-stage assets that do not yet meet the distribution and price discovery requirements to be added to the Omnipool. The first isolated pools was SUB/DOT which marked the initial listing of SUB token and start of trading. Also, after the first, and successful HDX Bond campaign, the Isolated Pool HDXb/HDX was created, so users can sell their bonds before the maturity date, or buy HDX with a discount.
By the way, the HDXb/HDX isolated pool was created by the community. This means that it’s possible to create isolated pools with assets that are already registered on-chain. In the future, HydraDX will also facilitate a permissionless asset registry.
LBP ✅
This feature implements the LBP pallet from Basilisk onto HydraDX, allowing price discovery on HydraDX for the entire Polkadot ecosystem.
Yield DCA ✅
The newest feature, Yield DCA, allows users to diversify their yield from DOT staking. Users can purchase vDOT and benefit from its market appreciation by accumulating other assets. This is facilitated through a periodic schedule that swaps the staking yield (average APY of 15%) into any other traded asset, at least once every 24 hours.
Security and infrastructure
What’s been delivered?
EWA Oracles ✅
This feature provides exponential moving average (EMA) oracles of different periods for price, volume, and liquidity for a combination of sources and asset pairs based on data coming in from different sources.
XCM Rate Limiter ✅
This security functionality sets limitations on the speed of both incoming and outgoing transfers. A primary application of this feature would be to restrict the transfer of an exploited token to HydraDX, thereby curtailing the exploiter from depleting other assets using this token.
APIs ✅
A scalable API infrastructure to serve the Omnipool data, now it’s integrated in Coingecko, Defi Llama, and more to come.
EVM Support ✅
Also, the latest update that incorporates Frontier pallets provided by Moonbeam, thus offering support for the Ethereum Virtual Machine (EVM) and consequently for MetaMask wallet and Ledger. The team is also mentioned that with the launch of EVM, it would be possible in future to launch Solidity smart-contract such as Aave, etc. for the further utilisation of Omnipool liquidity.
Bug Bounty & Audits
HydraDX has multi layered security, this involves not only security on the protocol’s level but also audits and bug bounty programs. Within the program “Contribute and Get Rewarded” a vulnerability was revealed by whitehat hacker and the HydraDX team and GC agreed on payment within the ImmuneFi bounty as well as removed the vulnerability by implementing dynamic fees feature.
PAL Initiative
The Polkadot Assurance Legion (PAL), a HydraDX team initiative, has been approved by Polkadot’s governance. 540,000 DOT are distributed across the ecosystem to assist with essential infrastructure audits, making Substrate and ink! audits more accessible and affordable. PAL aims to enhance Polkadot’s security and attract new builders. Currently, there’s Code4rena audit is ongoing. Learn more about by clicking on the link here.
HDX token utility
HDX Staking ✅
One of the most loud and awaited feature has been delivered — non-inflationary HDX staking! Unlike staking in most of the chains — rewards are taken from the annual token inflation, HDX staking is non-inflationary, meaning that there will be rewards are generated by trading fees and protocol revenue, what’s more important there will be no more than 6,5 billions HDX in total circulation.
Thanks to dynamic fees, HDX stakers receive shares of all trades executed on HydraDX, and ALL TRADE FEE in HDX pool. Adding to that gamification and loyalty incentives, stakers could receive pretty fat chunks of rewards, especially when trading volumes on HydraDX is high. You can read more about staking in the HydraDX docs, and we’re also preparing an additional article about staking.
Bonds ✅
This feature allows for HDX to be sold as bonds, locked and vested over a pre-determined period of time. Proceeds of bond sales will be sent to the Treasury as Protocol owned Liquidity (POL). HydraDX has already held two bonds events with a total accumulation of
Referral program/Referral links ✅
Another outstanding feature, now users are accumulating fee rewards from the Omipool trades, it works both ways for Referrers and invited users. Adding to that, 5 tier reward model, more trading volume generated, more cashback you and your invited users receive. A great incentive to onboard new users to HydraDX and generate more trading volume. Also, some of the asset fees generated by trades goes to HDX stakers, incentivizing those who secure the protocol and participate in governance. If you don’t receive a cashback on your trades, now it’s a great time to start.Read more about referral program here.
Trade in Omnipool and earn cashback using our referral code.
What about 2024? Upcoming features
Lending / Money Market — in development
Money markets or lending/borrowing are highly popular (and profitable) use cases for crypto. HydraDX is an AMM-specific blockchain, enabling its vertical integration across all aspects of DeFi and thereby capturing that value. Creating a money market on top of the Omnipool, coupled with a HydraDX Liquidation engine, has the potential to evolve into an impressive instrument for generating sustainable yields for the Protocol. Simultaneously, it would assist Liquidity Providers (LPs) and bond purchasers in maintaining liquidity while they accumulate incentives, trading fees, and lending yields.
Liquidation Engine — in development
The Liquidation engine allows HydraDX to prioritize specific transactions within blocks, ensuring that liquidations are executed first. The efficient processing of liquidations paves the way for a significant decrease in high overcollateralization ratios and substantial reductions in liquidation penalties and fees — transforming it into a “holy grail” of crypto.
Presently, the liquidation mechanisms employed by the industry are inefficient due to an excessive reliance on liquidation bots and competition with unrelated use cases (e.g., large NFT mints). In times of high market volatility, prioritizing liquidations is crucial for maintaining the financial health of the entire ecosystem. Having its own liquidation engine was a key factor in the team’s decision to build on Polkadot. Instead of optimizing features to work on the HydraDX chain, the team can customize the chain itself to serve the desired features without compromising on functionality.
When combined with the deep liquidity in the Omnipool, a liquidation engine can prove to be extremely reliable and profitable — benefitting not only HydraDX (POL) but also the Liquidity Providers (LPs).
Order Batching — in development
Executing orders against each other before they hit the block contributes to both the minimization of slippage and Maximal Extractable Value (MEV), leading to superior execution prices. Additionally, this feature presents a fresh revenue stream for the Protocol by internalizing another non-extractive MEV type — backrunning.
Unlike frontrunning, backrunning is a desirable type of MEV as it counteracts the price by trading in the opposite direction of previous trades. This strategy would be advantageous in scenarios where a profit can be realized by arbitraging against other venues. While these opportunities aren’t endless, they can be particularly lucrative during times of high market volatility. The method of capturing these opportunities would represent yet another innovative development in the DeFi realm.
Backrunning — in development
PFOF, or Payment for Order Flow, comes into play once order batching has done its work. HydraDX could auction the rights to exclusively preview the final state of the planned transaction order before executing the block, alongside the right to include backrunning transactions. The outcome of this process is generally positive: it benefits traders in that block by offering a lower execution price, it benefits backrunners, and it boosts the Protocol.
And more features are coming! Stay hydrated frens!
Learn more about HydraDX
Twitter | Discord | Telegram | Newsletter | Website
