What is Hydro Protocol?

Hydro Protocol (HOT)




Decentralized exchanges have improved transparency, inter-exchange sharing, liquidity and trustless non-custodial trading for users. However, the same decentralized exchanges account for lack of adoption due to a combination of factors including performance, a barrier to entry, usability issues, lack of economic incentives and overall transaction volume. The hydro protocol is a network layer protocol designed for marketplaces and high performance decentralized exchanges with built-in for coordination. The protocol is designed for Canonical order schema, an incentive to share and common framework assumptions. Hydro reside between Dapp layer and the order and settlement layer to offer middleware components on an incentive mechanism.

The Hydro protocol token.

The Hydro Protocol Token (HOT) is a protocol token on top of the liquidity ledger as the incentive for providing liquidity. The HOT tokens are distributed to each account on the system priority according to the protocol.

Token use cases

The Hydro Protocol token defines the rules for executing decentralized orders. The HOT tokens exist to coordinate and facilitate the formation of shared liquidity pools. The usage of a HOT token includes:

  • Incentive Mechanism: the HOT token provides additional incentive for parties in a bid to contribute to the pool. The Governance Mechanism provides for punishment of exploitative behaviors like front-running.
  • Pool Membership: the website describes the usage for pool membership as, “New decentralized exchanges looking to bootstrap liquidity can stake HOT tokens to gain membership into existing liquidity pools. The specific amount of admission is set by the members of each individual pool.”
  • Bounty system for market makers: The pre-allocated HOT token can be exchanged into a smart contract that dispenses pay to market makers in an autonomous way.

Features and benefits of Hydro

Compatibility Vs. scalability

Since standalone solutions do not have the required ability to trade assets on the blockchain, Hydro is designed in a way that supports at least ERC20 tokens base on the Ethereum network.

Price Discovery mechanism

The Hydro platform is built to power decentralized exchanges with built-in price discovery mechanisms.


Some projects rely on scalability and cross-chain support for availability. The discussion is limited to subject projects that work without technologies such as Plasma, Cosmoc, Polkadot, and Raiden.

Team members

Hydro team members include Tian Li, Microsoft Palantir, Kevin West, YC Alumni and B.S. in computer science from the University of Washington, David Qin, blockchain full-stack engineer and Teenage hacker and Bowen Wang, Zhen Fund Blockchain Analyst among others. The team includes people from different Ethnic backgrounds and culture.


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