Q2

The HydraDX Protocol has finished executing upon the POL diversification strategy which was mandated by the community of HDX holders for Q1 2023.

This thread has two components: an update on the current state of liquidity, and a proposal for the liquidity strategy for Q2 and beyond.

Current State of Liquidity

At the start of Q1, the HydraDX Protocol had 22,473,297 DAI worth of POL.

2,200,020 DAI was bridged through Wormhole and LPed into the Omnipool;
2,200,000 DAI was swapped to ETH, bridged through Wormhole and LPed into the Omnipool;
1,100,000 DAI was swapped to WBTC, bridged through Wormhole and LPed into the Omnipool;
250,000 DAI was swapped to iBTC and LPed into the Omnipool;
2,200,000 DAI was swapped to USDT and LPed into the Omnipool.

Besides this, the following actions have been approved by the community but not yet executed:

2,200,000 DAI to be swapped to native USDC (whenever it becomes available);
5,000,000 DAI to be set aside for funding the development of the HydraDX Protocol (ref. #35);
495,000 DAI to be paid to the whitehat and to Immunefi as part of the bug bounty program (ref. #41).

There are therefore 6,828,277 unallocated DAI remaining to be utilized by the HydraDX Protocol.

POL Proposal for Q2 and Beyond

To establish the POL strategy for Q2 2023 and beyond, we would like to spark a discussion which will be followed by the standard approval procedure of our protocol’s democracy. Using feedback from the community, we have compiled a list of suggested actions for the diversification and deployment of the remaining liquidity.

Buy 1,000,000 DAI worth of HDX

Bridge 1,000,000 DAI to Acala using Wormhole, transfer via XCM to the HydraDX Treasury account;
Initiate DCA (Dollar Cost Average) orders to gradually swap a total of 1,000,000 DAI for HDX in the Omnipool;
Future use of the accumulated HDX to be discussed.

Buy 3,330,000 DAI worth of DOT (incl. LSDs)

Bridge 3,330,000 DAI to Acala using Wormhole, transfer via XCM to the HydraDX Treasury account;
Initiate DCA (Dollar Cost Average) orders to gradually swap a total of 3,330,000 DAI for DOT in the Omnipool;
Accumulated DOT to be split between the following use cases:
- At least 1M DAI equivalent deployed to Omnipool as LP;
- At least 1M DAI equivalent swapped for DOT LSDs (options to be explored) and to be deployed to the Omnipool as LP;
- The remainder to be reserved for the next HydraDX parachain slot. Once the slot is secured, a discussion can decide how to utilize any remaining DOT.

Buy 500,000 DAI worth of iBTC

Bridge 500,000 DAI to Acala using Wormhole, transfer via XCM to the HydraDX Treasury account;
Initiate DCA (Dollar Cost Average) orders to gradually swap a total of 500,000 DAI for iBTC in the Omnipool;
Deploy the accumulated iBTC into the Omnipool.

Buy 2,000,000 DAI worth of ETH (incl. LSDs)

Swap 2,000,000 DAI for ETH using an Ethereum-based DEX;
Accumulated ETH to be split between the following use cases:
- 1,000,000 DAI worth of ETH to remain in the HydraDX Council-controlled Gnosis multisig until Snowbridge is live;
- 1,000,000 DAI worth of ETH to be swapped for ETH LSDs (options to be explored) and to be deployed to the Omnipool as LP.

This thread will be open for discussion to any community member for a reasonable period of time. After that, the proposal will be brought forward as a public referendum for the formal approval by all HDX holders.