Hydro allocates liquidity through sequential monthly auction rounds, each lasting one month. Projects compete by offering tributes to voters. This onboarding guide describes how projects may participate in the auction process.
Approval process
Bid approval
At launch, participation in Hydro requires pre-approval from the Hydro committee, and prospective bidder will be requested to fill out a document.
The information required includes the following items:
- Contact details
- Bid Description
- Liquidity bucket and tranche
- Intended use of liquidity
- Conversion to desired LST (if needed)
- Performance monitoring details
- Expected performance
- Risk mitigation details
- Security audits
- Tribute tokens during auction process
The full template can be found here. For reference, an example of a completed, approved bid teplate can be found here. To start the conversation, you can schedule a call with Milos from Informal Systems (the main contributor to Hydro).
Committee review
At the launch, the Hydro committee is responsible for allowlisting Projects, deploying liquidity, and managing exports (future versions of Hydro will incorporate a governance module and integration with the Valence protocol built by Timewave Labs). Committee members are also responsible for maximizing returns for voters and alerting the community about unwanted behaviors and vulnerabilities.
The committee has written guidelines for project pre-submissions. At launch, the strategies most likely to be allowed are Liquid Staking DEX Provision (pairing liquid ATOM with a Liquid Staking Token) and Lending (with a 60% Loan-to-Value ratio). Over time, the Hydro committee is expected to be willing to allow riskier strategies.
The Hydro committee members currently are:
| Name | Role | Description |
|---|---|---|
| Robo McGobo | Liquidity Export Performance | Tracks liquidity export performance to ensure funds are used as intended and yield expected returns. May suggest clawbacks if performance falls short. |
| Phil RX | Allowlist Management | Liaises with applicants and provides feedback on allowlist proposals based on qualitative and quantitative criteria. |
| Trix | Auction Performance | Monitors auctions on Hydro platform for manipulation or collusion, suggesting improvements as needed. |
| Jonny Wiles | Export Deployment | Ensures efficient and cost-effective liquidity export deployment across the IBC ecosystem, minimizing fees. |
| Andres | Security Monitoring | Handles security emergencies and coordinates with the Cosmos Hub community, proposing vetoes and sanctions if needed. |
| Carter | Ecosystem Growth | Identifies new collaboration and user adoption opportunities, liaising with partners and developers for Hydro integrations. |