HYDROP
Hydro Protocol
Hydro Protocol
HYDROP
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About Hydro Protocol
Hydro Protocol (HOT) is a middleware layer aimed at enhancing decentralised exchanges by addressing challenges like performance, arbitrage, and usability. It introduces a shared liquidity model and an incentive mechanism using HOT tokens to encourage liquidity provision and cooperation among exchanges. The protocol is demonstrated through the DDEX platform, which implements the hybrid model to facilitate efficient, decentralised trading on the Ethereum network.
Hydro Protocol (HOT) is a middleware layer designed to enhance the functioning of decentralised exchanges (DEXs). It aims to address key challenges such as usability, performance, arbitrage, and high technical barriers by providing a set of middleware components and an incentive system. Hydro Protocol is built on the Ethereum network and is intended to support ERC20 tokens. The protocol facilitates a "hybrid model" of decentralised exchange operations, combining the benefits of on-chain and off-chain mechanisms. It uses an "off-chain maker, on-chain taker/settlement" model to optimise efficiency and minimise vulnerabilities like front-running and order collisions.
Hydro Protocol is used to coordinate liquidity and performance among decentralised exchanges. Its key components and functionalities include:
- Shared Liquidity Model: Hydro Protocol allows multiple exchanges to share liquidity through an alliance system. It manages permission lists representing different alliances and tracks the liquidity contributed and consumed by each participant.
- Incentive Mechanism: The protocol introduces HOT tokens as an incentive for exchanges to share liquidity. Exchanges and market participants receive HOT tokens based on the volume of transactions they facilitate, encouraging active participation and liquidity provision.
- Token Usage and Staking: HOT tokens serve as a decentralised version of membership tokens used by traditional exchanges. Users can stake HOT tokens to join liquidity pools and gain membership benefits, as defined by the exchanges within the Hydro network.
- DDEX: Hydro Protocol is implemented in a sample exchange called DDEX, which serves as a showcase for the protocol's hybrid decentralised exchange model. DDEX helps drive real-world usage and feedback for protocol improvements while bootstrapping liquidity for the Hydro network.
The Hydro Protocol was developed by the team behind DDEX, a hybrid decentralised exchange.
Although 'HOT' was the ticker assigned at the deployment of the Hydro Protocol Token's smart contract, it is already in use by another asset that has a larger market presence and higher trading volume on major exchanges. Due to this pre-existing association and to avoid confusion in the marketplace, the alternative ticker 'HYDROP' has been adopted for this token. This designation is specifically used to ensure that assets are distinctly identified.
