User FAQ
What is Protocol-owned Liquidity?
Protocol-owned liquidity (PoL for short) refers to the liquidity controlled by the Hydro voters and deployed strategically to support DeFi projects across the interchain ecosystem. Hydro uses an auction system to allocate liquidity to projects offering the most value to voters. This ensures sustainable liquidity management and generates a yield (e.g., swap fees, lending, staking) that can be returned to the Cosmos Hub community.
Why is my wallet connected to Neutron? Isn’t this for ATOM holders?
When using Hydro, your wallet may connect to Neutron because the Hydro smart contract is currently on Neutron. However, Hydro is designed for staked ATOM holders, so your ATOM stake and voting power are still linked to the Cosmos Hub. Neutron is simply a tool for processing your actions more efficiently.
What does “Voting Power” mean, and how do I get it?
Voting power is how much influence you have when voting on bids. You need to lock up your staked ATOM on Hydro to get voting power. The more ATOM you lock and the longer the lockup period, the more voting power you receive. Locking your ATOM allows you to participate in decision-making by voting for bids on Hydro.
What is “tribute,” and why are they important?
Tribute is the reward that bidders offer to attract your votes. When you vote for a bid, you are essentially “locking” your support in exchange for a share of the tribute. This tribute is distributed to voters after the round ends and can vary from bid to bid. Think of tributes as the incentive bidders offer to win your vote!
Why do I need to approve multiple lockup transactions?
Locking up your ATOM requires multiple approvals to ensure security and transparency. These approvals include confirming your voting power and finalizing the lockup period. We are working on simplifying the process in future updates. We’ll also add more explicit guidance so you know exactly what each step involves.
What should I do if I get a transaction error?
If you receive a transaction error, it could be due to an issue with the network, gas fees, or a minimum lockup amount. First, check that you have enough ATOM staked and gas available for the transaction. If the error persists, please take a screenshot and share it in the Telegram channel for support. We’re here to help resolve any issues with the Hydro system.
Where did my ATOM go after I got voting power?
When you lock up your ATOM to gain voting power on Hydro, your ATOM is converted into Liquid Staking Module (LSM) shares, which are then sent to the Hydro contract. You haven’t lost any ATOM; it’s just been converted into LSM shares representing your stake in the system. You won’t be able to vote in Cosmos Hub governance with the staked ATOM that you converted to LSM shares. You are now using that ATOM to participate in Hydro governance.
Am I still eligible for airdrops?
You may or may not still be eligible for airdrops for the staked ATOM that you converted to LSM shares. Some projects may not query your LSM shares. However, Hydro will feature an airdrop endpoint for projects to query, and the Hydro team will work with the Cosmos core teams to update the documentation to include this information for future projects. This could make you eligible for new airdrops because your participation in Hydro shows you’re actively participating in the Cosmos ecosystem.
How do I know which bid to vote for?
Bidding is the process by which projects compete for liquidity on Hydro. Each bidder offers tributes as rewards to attract your vote. When deciding which bid to vote for, you can consider the tributes they offer, their bid goals, and their potential impact on the ecosystem. We recommend reading each bid’s details before making your decision, and you can always view how others are voting as well.
What is APR, and why is it relevant to voting?
APR (Annual Percentage Rate) shows the potential return you can earn from your locked ATOM, including rewards from tributes. It gives you a snapshot of how much you could gain by participating in the Hydro voting process. Remember that this APR may fluctuate as more voters participate or as bidders adjust their tribute. You’ll see a real-time APR when locking your ATOM and voting on bids. For more details on the Hydro APR, check out the dedicated page in the user documentation.
Can I change my vote after I’ve locked my ATOM?
Yes! Hydro allows you to change your vote after locking your ATOM. You can switch your vote if you decide to support a different bid during the voting round. However, you can only vote for one bid per tranche, per round, so if you want to change your vote, you’ll need to adjust it within the same tranche.
What should I do if I’m unsure about a step or encounter an issue?
If you’re unsure about any part of the process or encounter a problem, don’t worry! Join our Telegram channel and post your questions or concerns. For any technical errors, please share screenshots in the channel. Our team and community members will be there to assist you.