As decentralized finance (DeFi) continues to evolve, the need for advanced platforms offering high returns and low-risk strategies is becoming increasingly essential. Hydro Protocol steps into this role, providing an innovative infrastructure that allows users to customize and manage yield and liquidity strategies on the Injective Network. By combining Liquid Staking Derivatives (LSD) with Real World Assets (RWA), Hydro offers a specialized LSDFi product suite to maximize utility and optimization within the ecosystem.

What is Hydro Protocol?

Source: Hydro Protocol website

Hydro Protocol is the first of its kind on the Injective Network, setting a new standard for LSD and LSDFi protocols. Users can leverage Hydro’s LSDs to remain staked while also gaining liquidity for other applications such as trading, lending, and farming, thus ensuring that their locked tokens are utilized to their fullest potential. Additionally, Hydro introduces the Real Yielding Asset (RYA), a unique product that indexes various yields across the crypto universe to bring LSDFi to new heights.

The Mission and Vision of Hydro Protocol

The mission of Hydro Protocol is straightforward: to optimize yields across real-world and Crypto Assets. Beyond the typical LSD protocols, Hydro enables users to engage in low-risk wealth strategies within a diversified LSDFi ecosystem.

Hydro Protocol envisions a future where DeFi operations are seamless, efficient, and highly profitable. By providing a robust platform that integrates the best of LSD and RWA products, Hydro aims to become the cornerstone of yield optimization and utility in the decentralized finance landscape. The goal is to empower users with the tools to achieve maximum returns while minimizing risks, paving the way for the next generation of DeFi innovations.

What is LSD & LSDFi?

Hydro Protocol is revolutionizing the DeFi landscape by seamlessly integrating Liquid Staking Derivatives (LSD) and Real World Assets (RWA) to offer a robust and optimized yield strategy platform. Let’s dive deep into understanding LSD and LSDFi

Liquid Staking

Traditionally, staking required users to lock up their tokens to earn rewards, making those assets temporarily inaccessible for other uses. Liquid Staking changes this dynamic by allowing users to stake their tokens and earn rewards without relinquishing control. Instead, users receive a derivative token, often referred to as a “shadow token,” which acts as a receipt for the staked asset. This derivative can be used in various DeFi activities such as trading, lending, or providing liquidity, all while still earning staking rewards. This innovation significantly enhances capital efficiency within the ecosystem, unlocking new opportunities for users to maximize their assets’ potential.

LSDFi

LSDFi, or Liquid Staking Derivatives Finance, is a concept that has been gaining traction since 2023. LSDFi protocols are built on top of liquid staking derivatives, creating a market where these derivatives can be utilized to generate additional yield. By leveraging LSDs, users can engage in a wide array of yield-generating opportunities, maximizing the returns on their staked assets. The standardized nature of LSDs makes them highly versatile, allowing them to be integrated seamlessly across various DeFi protocols. For Hydro Protocol on the Injective Network, the LSD token $hINJ is a prime example. It has gained widespread popularity due to its ability to increase utility opportunities within the Injective ecosystem, including trading, borrowing, lending, and engaging with Real World Assets (RWAs).

Real World Assets

Real World Assets (RWAs) bring tangible and intangible traditional financial assets onto the blockchain, providing users with access to a broader range of investment opportunities. These assets can include tangible items like real estate or intangible ones such as government bonds. On the Hydro Protocol, RWAs are optimized in two significant ways:

• Index Components in Real Yield Assets (RYA): RWAs are used as components in Hydro’s Real Yield Assets (RYA), creating a diversified index that offers optimized yield strategies.
• Collateralization with Liquid Staking Tokens (LST): Hydro’s LST can be used to collateralize RWAs, providing a secure and efficient way to leverage these assets within the DeFi ecosystem.

By integrating RWAs with LSDs, Hydro Protocol enhances the utility and value of both asset types, paving the way for innovative and optimized yield strategies in the DeFi space.

Core Features of Hydro Protocol

Hydro Protocol offers a suite of innovative products designed to maximize the utility and yield of staked assets. These core features include Liquid Staking, Auto Compounding, and Farming. Additionally, Hydro introduced a specialized product called the Real Yield Asset (RYA) to diversify risk and enhance wealth accumulation.

Liquid Staking Derivatives (LSD)

The primary offering of Hydro Protocol is its Liquid Staking product. Users can deposit their INJ tokens and receive hINJ tokens in return. This process allows users to earn staking rewards while maintaining liquidity, enabling them to participate in other DeFi activities like trading, lending, or providing liquidity. Hydro’s liquid staking token, hINJ, is minted on a 1:1 basis with INJ and provides instant staking benefits without the need to wait through unbonding periods.

Hydro Protocol stakes the deposited INJ tokens with a carefully selected set of validators that meet specific criteria:

• Uptime greater than 99%
• Commission rates at or below 5%
• Voting power exceeding 0.1%

Hydro Protocol plans to operate its own node, increasing security and efficiency for its users. Until then, it will delegate staking to at least five public validators that meet these standards.

How Does Liquid Staking Work?

Hydro Protocol’s smart contracts lock native assets (e.g., INJ) and mint liquid assets (like hINJ) as proof of ownership. Staked assets begin accumulating rewards immediately, displayed in the user’s interface. The protocol releases all accumulated rewards upon redemption and initiates the unbonding process. These smart contracts operate autonomously, ensuring users control their assets and rewards.

Rewards and Flexibility

Users can receive staking rewards in INJ or the amplified HDRO assets. This flexibility allows users to implement their assets for value accrual according to their preferences. The APYs for HDRO are higher than for INJ, offering an option for users with a bullish outlook on HDRO to maximize their rewards.

Auto-Compounding

Hydro Protocol’s auto-compounding feature allows users to maximize their staking yields without manual intervention. Traditional staking often requires users to periodically claim and restake rewards, which is time-consuming and incurs additional network fees. Hydro’s auto-compounding automates this process, ensuring consistent reinvestment and eliminating the need for manual transactions.

Farming

Hydro Protocol allocates 10% of its tokenomics to a yield optimization product for liquid assets, providing immediate utility for hINJ, especially through the Early Access Farming (E.A.F) strategy. Users can deposit hINJ into farming pools to earn additional HDRO rewards. The farming rewards are distributed daily and can be claimed after 14 days.

Farm+Boost Feature

Hydro Protocol also offers the Farm+Boost feature, where users can further lock their HDRO tokens to amplify their rewards. Combining staking with xHDRO increases the potential returns, making it an attractive option for users looking to maximize their yield.

Early Access Farm (EAF)

The Early Access Farm is a limited-time event offering substantial rewards to early participants. From the mainnet launch on January 31, 2024, users can stake INJ, mint hINJ, and farm hINJ to earn significant rewards during the first four weeks. This initiative is designed to kickstart network participation and provide early adopters with enhanced incentives.

Basic Features of Hydro Protocol

In addition to its core offerings, Hydro Protocol includes essential DeFi features to ensure a comprehensive and user-friendly experience. These features—Swap, Governance, and LP Pools—are fundamental components that facilitate seamless interactions within the Hydro ecosystem.

Swap

Hydro Protocol integrates a basic swap function directly into its user interface, connected to the hosted LP DEX platforms such as Injective Helix Pool and Dojoswap. This feature supports the HDRO-INJ main pool, allowing users to exchange tokens easily. Gas and network fees for swaps are paid in INJ, ensuring a smooth and efficient transaction process.

LP Pools

Hydro Protocol offers two main liquidity pools on the Injective native Helix DEX and other third-party DEXs like Dojoswap. Users can provide liquidity to these pools to earn additional staking rewards. The two pairs with the deepest liquidity are:

• HDRO - INJ pool
• hINJ - INJ pool

These pools provide essential liquidity for the ecosystem and offer LP reward emissions, adding an incentive for users to contribute their assets. A detailed walkthrough for participating in these pools will be provided later.

Governance

Governance is crucial in the Hydro Protocol, enabling users to participate actively in decision-making. By staking HDRO tokens to receive xHDRO tokens, users gain the ability to vote on various proposals, including:

• Parameter changes
• Governance parameter changes
• Treasury deployment
• Text proposals

This democratic approach ensures that the community has a voice in the protocol’s development and direction, fostering a collaborative and transparent environment.

Hydro Protocol Tokenomics

The $HDRO token is the native cryptographically secure fungible protocol token of Hydro Protocol, with attributed utility and governance token within the network. $HDRO has a max supply of 1,000,000,000, and the tokens are distributed as follows:

• Genesis Incentives: 5%
• Public Sale: 5%
• Investors: 10% (6 months lockup + 10% first serve + linear unlock for 18 months)
• Team: 12% (6 months lockup + linear unlock for 42 months)
• Farming: 10%
• Liquidity Reserve: 10%
• Treasury: 48%

Token Utility

As the primary native token, the $HDRO token has multiple uses across Hydro Protocol. Some use case examples include:

• Amplified Yield Boosters on Farming: $HDRO tokens will be allocated as economic incentives to encourage users to utilize the protocol’s services by providing an additional $HDRO for their efforts.
• Components on the RYA Index: As the transferable platform currency, $HDRO may be utilized as part of the RYA index, which users may use as a unit of account.
• Governance on Hydro Protocol: Users who stake $HDRO to receive xHDRO tokens could actively participate in submission, discussions, and voting on governance proposals, including but not limited to parameter changes, governance parameter changes, treasury deployment, and text proposals.

How To Mint To Farm on Hydro Protocol

1. Main LSD Page

1.Find the “Liquid Staking” tab on the Navigation Panel on the left-hand side.

2.Choose what kind of reward you would like to receive your APR rewards.

3.Input the amount of hINJ you would like to mint. Remember, it is a 1:1 ratio.

4.Hit the “Stake & Mint” button to sign off your transaction.

5.Congratulations! You have your first hINJ minted. Now let’s move to the ‘Farm’ tab on the left.

2. Main Farm Page

1.Input your hINJ you wish to farm. You can also check how much is available for your farm right on top of the input bar.

2.See the estimated rewards you can earn

3.Check the Terms of Use

4.Hit the ‘Add Farm’ button and sign off on the transaction.

3. Entitled Rewards Page

1 Return to the main Farm page to see how much rewards have accumulated throughout the farm. Note: Exact calculations are made in 24-hour intervals, which may look different from what you saw on the previous screen.

2.Check how many and when your rewards become claimable. These become claimable in 14 days.

Is $HDRO a Good Investment?

$HDRO has garnered attention due to its being of its kind on Injective blockchain. Here are some key points to consider before investing in $HDRO:

• Volatility and Opportunities: The crypto market, including $HDRO, is volatile. While volatility presents opportunities for substantial profits, it also carries higher risks. Investors with a high-risk tolerance and healthy financial positions may find $HDRO appealing.
• Market Conditions and Unpredictable Factors: The crypto market is subject to extreme conditions, legal policies, social media narratives, and other unpredictable factors. Investors should stay informed and exercise risk management.

Remember that investing in any asset carries risks, and it’s essential to conduct thorough research and consider your risk tolerance before making investment decisions.

How to Buy $HDRO From Gate.io

• Create an Account on Gate.io: If you don’t have an account, sign up on Gate.io.
• Deposit Funds: You can deposit USDT or other cryptocurrencies into your Gate.io account using external wallets, credit card options, or bank transfers.
• Navigate to the HDRO/USDT Trading Pair: On the homepage, click the trade button under the HDRO/USDT market. Place an order with your preferred price and amount.
• Order Execution: When there is a matching opposite order, your order will fill (partially or fully). Monitor your trades and adjust as needed.

Take Action on $HDRO

Check out the $HDRO price today and start trading your favorite currency pairs:

• HDRO/USDT