The HydraDX cryptocurrency is a decentralized platform with cross-blockchain support, powered by Substrate, and operates on Polkadot where it functions as a parachain.
In this article, we will discuss:
Team behind the cryptocurrency
The protocol is developed by the Galactic Council, which is made up of developers who focus on building Substrate, the engine that powers the Polkadot ecosystem. Notably, the Galactic Council is a member of Zee Prime, a venture capital firm that “invests in programmable assets”.
Zee Prime's portfolio features top projects like Hive, Crypkit, Polkadot, Deribit, Solana, Perpetual Protocol and, of course, HydraDX.
The protocol is supported by a long list of angel investors such as Tenzor, DFG, CMS and Hypersphere.
What is HydraDX token?
The HydraDX cryptocurrency is a decentralized platform with inter-blockchain support. It's powered by Substrate, the same engine that drives reputable platforms like Polkadot and Edgeware. However, he operates in Polkadot, where he works as a parachain.
By using Substrate, HydraDX developers can implement system-wide updates without triggering a hard fork. On the other hand, its implementation in Polkadot as a parachain allows you to optimize important properties such as speed, flexibility and security.
Furthermore, Polkadot accommodates the future, and the number of projects on the platform is already growing. The key offering of HydraDX lies in its power to act as a trusted and secure middleware to enable decentralized token exchange on or off Polkadot.
Note that operating a parachain in Polkadot allows for greater customization to fit any use case.
HydraDX Token Key Use Cases
With cross-support, flexibility, speed and security, HydraDX's financial use cases are limitless. The key among them includes:
- Exchange of cryptocurrencies from different blockchains.
- Users can provide liquidity and earn rewards.
- Users can create new liquidity pools for new tokens.
- Developers can integrate exchanges into the wallet and connect cryptographic stores directly with decentralized exchange aggregators (DEX).
- Developers can interact with Bitcoin (BTC), Polkadot (DOT), ERC-based coins, and other ERC-based assets. blockchain.
How HydraDX Operates
While the platform uses automated market making (AMM) to price pooled assets, it departs from the conventional AMM model. To better understand HydraDX's price discovery options, let's see where it applies.
The protocol uses a single decentralized pool that it calls the ocean thanks to its flexibility of expansion. Pool liquidity comes from individual liquidity providers and from the platform itself. Interestingly, this approach allows you to combine features from traditional DeFi platforms such as Uniswap and Balancer, to provide an enhanced network for users.
Protocol liquidity uses the platform's native currency, XHDX (more on this later). Also, half of the pool is composed of XHDX, while the remaining percentage comes from LPs. The number of tokens minted depends on activity in the pool.
Native Token (XHDX) and HydraDX Governance
HydraDX's native currency is called XHDX. Its coinage depends on the tokens provided by the LPs in the single pool. As such, the more active, the more XHDX tokens are minted. On the other hand, when LPs withdraw their assets from the pool, the platform ensures balance by burning more XHDX.
The XHDX token can be traded with other pool assets or purchased off-platform. The pool currently supports the platform's base asset, Ethereum (ETH) and Polkadot (DOT).
Other XHDX Use Cases
In addition to providing liquidity to the pool, XHDX has more use cases. For example:
- It is used as a reference point when pricing an asset in terms of another asset.
- As such, it protects against price slippage and improves capital efficiency. Note that price slippage is among the top issues that concern DeFi platforms employing conventional AMM capabilities.
- Interestingly, the HydraDX approach allows LPs to provide unique assets for liquidity. The XHDX token allows the protocol to match its comparison to an ocean. Like? The ocean can expand and shrink at will, depending on liquidity.
- Consequently, the HydraDX omni pool, using the native currency, is able to expand and shrink depending on the “in and out of assets”. By doing this, the network reduces liquidity dispersion while improving execution.
Note that the approach taken by HydraDX allows native currency to be backed by all tokens deposited in the omni pool.
- The XHDX cryptocurrency also works as a wagering token, where it can be locked in a wallet, allowing holders to participate in the search for new blocks in a wagering blockchain trial. In addition, XHDX holders benefit from discounted trading costs and a lower overcollateralization rate when borrowing from the network.
- This is not everything. HydraDX is a community run platform. Therefore, to give voice to real users on the platform, it uses its native token.
- However, before heading to the decentralized governance route, the platform has a Discord channel where users can propose changes and improvements to HydraDX. Twitter and Telegram are other platforms where the HydraDX community gathers to discuss critical issues.
While these platforms do not provide decentralized governance, they do have a large number of cryptographic followers, are easily accessible, and are easy to use.
How to Earn XHDX Cryptocurrency
First, the native token is an incentive for those providing liquidity in the omni pool. So, being an LP, you automatically earn XHDX coins.
In addition to providing liquidity, tokens can be purchased outside the protocol and wagered to earn more coins. In addition, bounty hunters are rewarded on XHDX for their participation in the network.
Platform improvements
HydraDX developers are spending sleepless nights to ensure that everything a DeFi user wants is available and running smoothly. In recent months, the platform has undergone major improvements. For example:
- It incorporated a technology to improve transaction marking.
- Developed an improved order matching engine with excellent error handling and improved rate determination.
- More bugs fixed, which translates to a smoother user experience.
- All components have been tested to provide a more stable system.
HydraDX (XHDX) 2022 and 2023 Price Forecast
The price of HydraDX is forecast to peak at $0.29 throughout 2022.
According to our crypto price prediction index, in 2023 the price of HydraDX (XHDX) could reach a maximum level of $0.50, with the average trading price of $0.37.
Conclusion
From our discussion above, it's clear that the HydraDX is an exceptional DeFi design, with a uniqueness that comes, in part, from using an improved AMM model. This allows LPs to provide a single asset rather than all listed assets in the pool. Furthermore, using a single pool for all tokens provides a better user experience, reduces price slippage and attracts more liquidity.
Implementing its native token protocol allows it to easily adapt to changes in pool liquidity. In addition, XHDX offers additional benefits such as discounted trading fees and wagering rewards for its holders.
As a decentralized network, employing decentralized governance is a natural addition. HydraDX's choice to use Substrate and Polkadot is a clear sign that the platform is interested in developing a complete network capable of withstanding ups and downs in the DeFi ecosystem now and in the future.