This discussion should centre around the rebranding aspect of the below post - as the upcoming referendum will place the following on-chain remark:

Rebrand into Hydration Network. Incorporate a visual refresh including logo and general look-and-feel of the brand which should go in the direction of retro flair / Vaporware / Miami Vice style.

The images shared in this post are purely to give an indication of the style we are leaning towards - the final designs will be produced by a professional brand agency in cooperation with our own designer and IGL team.

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Destination Hydration

As HydraDX continues growing, we keep progressing towards our mission: To make finance efficient, simple, and unstoppable. Thanks to the hard work of the contributors to the Protocol - including our lovely community (we are really lucky to have you), the HydraDX Omnipool has evolved into the go-to DEX in the Polkadot ecosystem. We are serving a big portion of native users who are looking to swap ecosystem assets. This also includes DAOs such as Polkadot and its Treasury, which is currently diversifying DOT into stablecoins using the HydraDX Omnipool.

Now is a good time to embark upon the next stage of our journey. Building a great system of DEXes (Omnipool, Stablepools, Isolated Pools, and Liquidity Bootstrapping Pools) was always just a part of the plan. Having a reliable and scalable liquidity infrastructure is a prerequisite to achieving the greater vision: To unite the holy trinity of DeFi (AMMs, Money Market, and native Stablecoin) under the roof of a single, dedicated L1 chain.

This grand vision has always intrigued the team behind HydraDX and it eventually informed the choice for Polkadot as an ecosystem to build in. Having control over block production, it is possible to design a system that handles liquidations efficiently and with priority, and even to adopt measures for internalizing MEV. These are all important steps towards achieving the long-term sustainability of the Protocol.

To fill the missing pieces, we have three exciting announcements to make. In the first place, Lending and Borrowing will soon launch on our testnet. This is made possible by a fork of AAVE v3 which we are planning to deploy on the HydraDX chain. Secondly, we are happy to share that the ecosystem will be also getting a new native decentralized stablecoin - behold the HOLLAR!

Finally, exciting news like this is best served with a rebrand. To mark this transformational moment, we propose to refresh our brand and identity. Besides a different look and feel, the proposed package also contains a brand change: Hydration Network.

Let’s dive into these exciting announcements.

Borrowing and Lending

With the introduction of a Money Market on HydraDX, users will be able to put their assets to work by deploying them into a lending pool. These funds then become available for other users to borrow in exchange for providing collateral. If the overcollateralization of the debt drops below a certain level, the position is (partially) liquidated and the lending pool gets repaid. Stay hydrated, not liquidated - that’s the name of our game.

The ability to execute liquidations against the Omnipool is a huge proposition. Since all actions will take place on the same dedicated, non-congested chain, the Protocol is able to focus on making liquidations as fast, efficient, and reliable as possible. Furthermore, Lending protocols and Liquidation engines are some of the main revenue generators in the current DeFi landscape (always has been 🧑‍🚀🔫🧑‍🚀). By bringing the Omnipool and a Money Market under the same roof, HydraDX is in position to unlock a major new revenue stream that can bring the Protocol to the point of complete self-sustainability (and beyond).

After careful consideration, the choice was made to implement the Money Market by forking the AAVE v3 smart contract and deploying it on the HydraDX Ethereum Virtual Machine (EVM) environment. The integration will be seamless, allowing both users of Polkadot-native wallets and Metamask to make full use of the lending platform. This choice was made for several reasons. AAVE is one of the most used (and forked) lending protocols with a strong attitude towards security - constantly undergoing audits and even known for disclosing 0-day vulnerabilities to known forks. Forking a battle-tested EVM Money Market will spare us from reinventing the wheel and allow us to focus on the features that make our money market special (e.g. making liquidations quick, efficient, and reliable).

Thanks to this approach, the effort required for developing the core functionality is smaller, meaning that the feature might go live sooner than expected. Development is well underway, and the first early version could hit our hydrated testnet in 3 weeks. For the Oracles part, we are cooperating with DIA.

It is up to the community to initiate a discussion leading to one or more referenda, in order to decide which assets should be first supported on the Money Market - both in terms of what can be borrowed, and what can serve as collateral. Interest rates will also be set following a decision of all HDX holders (at least until a better procedure has been proposed and adopted).

HOLLAR Stablecoin

Like it or not, the world is dollar-centric, and this is reflected in the persisting importance of stablecoins and their unprecedented product-market fit. Stablecoins are one of the most widely adopted crypto products. Tether, initially applied as a stable vehicle for sending funds between centralized exchanges, is being used for day-to-day transactions throughout LATAM and SEA. (Un)surprisingly the biggest contributor to this adoption is Tron, a centralized EVM chain running on ~20 validators, but nonetheless providing cheap rails for those who need it.

We believe we can do better: By replacing trust issues with trustless virtues, and untransparent backing with decentralized, on-chain commitments. Polkadot 2.0 can provide enough flexibility and muscle to accommodate the needs of the Web 3.0 users of the future, at the scale of Web 2.0. We used to look at Visa & Mastercard transaction benchmarks as some unreachable tops, but not for long anymore.

Historically, many decentralized stablecoins have let their users down due to excessive reliance on human interventions such as performing changes in parameters (e.g. interest rates) or 3rd party arbitrageoors that were entrusted with peg control. But why should we have such outdated and cumbersome designs in 2024?

HOLLAR fixes this.

HOLLAR (Hydrated Dollar) is a future-proof decentralized stablecoin which operates on top of a scalable, purpose-built blockchain infrastructure (HydraDX). Having the Omnipool as an efficient liquidity layer and the ability to prioritize liquidation transactions are two factors contributing towards the peg balance of HOLLAR.

A third peg stabilizing factor is our upcoming Adaptive Liquidity framework. This is a set of rules and procedures which can adjust the parameters pertaining to the HOLLAR liquidity (e.g. interest rates) dynamically, based on capital and price movements. Going a step further, one could imagine the Protocol implementing a burn/mint mechanism to help maintain the peg: Burn when users are selling the stablecoin for other assets, mint HOLLAR when the demand for stablecoins is high, which typically happens during moments of loan repayments or when users are simply looking for safe harbor.

Rebrand into Hydration Network

To top it off, we are proposing a rebrand: Morphing from HydraDX into Hydration Network.

While we will always love the name HydraDX, we believe that the Protocol is outgrowing its brand. Few people understand what the DX stands for (it’s a reference to the derivative notation dy/dx), with most ending up calling us “Hydra” anyway. We have embraced the multi-headed liquidity monster as our mascot. However, a rebrand into Hydra is not feasible due to its apparently negative connotation (whether it is related to a fiction by Marvel or a dark web marketplace with the same name which was shut down recently).

Hydration Network is a strong alternative that will help us keep our brand as close to our roots as possible. It fits our style of communication which often revolves around staying hydrated, and it will allow us to keep HDX as our ticker. Being a witty reference to liquidity, we believe that Hydration will be positively received both by the DeFi freaks and the regular degens out there.

The rebrand also merits a visual refresh: A new logo and look-and-feel of our identity. Moving away from our mythological roots, we are looking to explore a vibrant mix of retro flair and Vaporware style, reminiscent of the energetic 80s and Miami Vice aesthetics. This shift aims to make our brand more relatable and engaging, infusing our crypto-finance endeavors with a distinct and memorable character.

Incorporating hydration-themed elements - such as vending machines and pools - into our branding, we are ensuring these motifs complement our crypto and finance focus. While we are excited about this fresh direction, we are also mindful of maintaining cost efficiency and continuity with our existing color scheme, minimizing changes to align with community preferences and existing app design.

We are currently working with several brand studios that would be able to successfully carry out the rebranding task. Before jumping in, however, we would like to remain true to our tradition and consult the HydraDX Protocol governance first.

For this purpose, we will soon launch a referendum which, if approved, will post the following on-chain remark:

Rebrand into Hydration Network. Incorporate a visual refresh including logo and general look-and-feel of the brand which should go in the direction of retro flair / Vaporware / Miami Vice style.

We expect to launch the referendum in the upcoming week. In the meantime, we would love to hear your thoughts in this discussion below 👇