Dear Hydraheads,
The moment that some of you have been anticipating for over a year is finally arriving upon us: After winning auction #9, HydraDX will be onboarded as a Polkadot parachain in March.
The HydraDX team is extremely grateful for your uninterrupted support during the past 12 months. Having such a strong community behind our backs has given us the courage to continue executing on our bold vision: Breaking the barriers of liquidity associated with traditional AMMs.
In this post we share with you the final auction stats, as well as our reflection on the HydraDX crowdloan campaign. You will also find some high-level information on the migration from our testnet (Snakenet) towards a Polkadot parachain, including the HDX tripling, distribution to crowdloan participants, and vesting periods.
We can imagine that the many HDX hodlers are asking themselves the same question: Wen HDX transferrable? However, in a tribe with decentralized decision-making, this call is not ours to make. Once the migration towards a Polkadot is complete, the HydraDX Council, or any other Hydrahead with HDX, will be able to initiate a referendum for removing the freeze on balance transfers.
We would also like to point out that the Omnipool does not necessarily need to be production-ready in order to enable transfers of HDX. As we already conducted an HDX LBP event a year ago, we have bootstrapped sufficient liquidity to kick off the Omnipool once we decide to deploy it. More information on the Omnipool will be shared in the upcoming weeks, when we are planning to leak some juicy alpha straight from our R&D department!
Final crowdloan stats
Winning auction: # 9
Crowdloan cap: 8,000,000 DOT
Raised: 2,462,542 DOT
Participating wallets: 9,937 (including unique participants via Parallel Heiko)
Average contribution: 247 DOT per wallet
Winning block: # 8953370
Parachain slot start: 11 March 2022
Parachain slot end: 12 January 2024
Total rewards to be distributed: 494,588,589 HDX (~5% of total supply)
Looking at these numbers in retrospective, we are happy to conclude that our crowdloan strategy has worked out the way we had envisioned it. Guided by the ambition to not overpay for the parachain slot, we adopted a rewards scheme which incentivizes just enough contributions to win a slot.
At the beginning of the HydraDX crowdloan, we saw contributions quickly come in. Once we took the lead for our target auction #9, the rewards started decreasing until they eventually reached 10% of the normal rewards for early contributors. This had an immediate deterring effect on late crowdloaners, and the rate of incoming contribs slowed down.
The outcome of our crowdloan strategy is clearly visible: We raised 2.46M DOT which is only 45% of the total contributions made for auction #8. In return, we will end up distributing 494M HDX as crowdloan rewards (~5% of total supply), being only half of the amount we had initially reserved for winning our first Polkadot parachain slot. The remaining 5% will be held by the Treasury for now and will be used at a later point for serving the interests of protocol (e.g. liquidity mining, protocol owned liquidity, bonds or financing future parachain slots).
Migration from Snakenet
During the remaining 3 weeks before the onboarding of HydraDX as a Polkadot parachain, the efforts of our Runtime team will be directed at preparing the migration away from our testnet (Snakenet). The migration consists of a complex set of operations which need to be performed. Here is a brief overview of what will happen (not necessarily in the same order):
Migrating the Existing HDX Balances
In the first place, all existing balances need to be migrated. This includes the HDX obtained by early Hydraheads at the HDX LBP (1 year ago), all treasury payouts made for contributions to the protocol, the rewards from staking, as well as the balances of Treasury and the allocation of team & investors.
The above-mentioned balances are not subject to any vesting periods, with the exception of the allocations of investors & team. The allocation of investors is subject to a 24-month vesting schedule which will kick off once HDX becomes transferrable. The team allocation, on the other hand, will undergo a 6-month cliff, after which it vests over a period of 24 months.
Distributing the HDX Bonus to Basilisk Crowdloaners
All participants in the Basilisk crowdloan will receive a variable HDX bonus for their contributions. The HDX will be distributed to their respective wallets as part of the migration. The HDX will vest linearly for the duration of the Basilisk parachain slot (until 5 August 2022).
Performing the Tripling of HDX Balances
In December 2021, the governance of HydraDX passed a referendum to triple all existing HDX balances, excluding Treasury and the allocation of team & investors. The tripled part of the resulting balances is subject to the same vesting rules which apply to the existing HDX allocation.
Here’s an overview of all groups eligible for the tripling:
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HDX LBP participants, including unclaimed HDX (no vesting)
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Payouts made by Treasury (no vesting)
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Staking rewards (no vesting)
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HDX bonus of Basilisk crowdloaners (vests linearly until 5 August 2022)
Distributing the HDX Rewards for HydraDX Crowdloaners
The final step of the migration is the distribution of the HDX rewards to the participants who contributed to the HydraDX crowdloan. The HDX rewards are vested linearly over the duration of the Polkadot parachain slot (until January 2024).
Please note that the rewards for the HydraDX crowdloan are not eligible for the tripling, as the rewards were already calculated taking the HDX price after tripling into account.
Technical Details of the Migration
The migration from Snakenet towards a Polkadot parachain implies that HydraDX will be transitioning from an independent Relay Chain setup with its own validators towards the shared security of Polkadot with a limited number of collators. Initially, we will run our own collators, however we are planning to open up soon to members of our community who have contributed during Snakenet.
To perform the migration steps described above, we will need to freeze all activity on the chain for a period which will last between several hours to a couple of days.
Please note that until we have completed the migration to a Polkadot parachain, the protocol is dependent on its own security which is guaranteed by the validators running HydraDX nodes and the nominators staking their HDX. We appreciate your support over the past year and would kindly ask you to continue staking, until Snakenet has officially come to an end. And don’t worry about unbonding periods - once we transition to a parachain, all balances which are currently bonded in staking will be automatically unlocked without any waiting periods.
Stay hydrated, not liquidated
