News from the LOC Coin Development team on April 18, 2023
We are excited to release another major milestone: Deployment of the LYDRA System on the Hydra Testnet!
Today is a big day for the Hydra ecosystem. After months of development, we are finally ready to deploy LYDRA on the public testnet network. This marks the last major step before the release onto mainnet — and with it, the start of a new chapter.
LYDRA was activated on testnet at block height 1,071,300 via a hard-fork. Nodes that were prepared in advance should restart after activation in order to make the changes visible on the user interface.
Important: There is NO action required by stakers on mainnet.
Before we go into the practical, let’s quickly recap what this LYDRA is all about.
What is LYDRA?
LYDRA derives its name from “Liquid HYDRA” and aims to offer stakers additional possibilities when it comes to their staking strategy. Holders can issue LYDRA against their HYDRA as collateral, while at the same time participating in the staking process and earning block rewards passively. It is therefore a liquid staking derivative built directly into the core of the protocol.
This opens up several possibilities, such as:
Hedging against market movements without having to close the staking position
Leveraging your market exposure as well as staking APR without the risk of liquidation
Yield farming with delta-neutral strategies
Doubling your working capital by staking HYDRA and at the same time lending or liquidity mining with your LYDRA
Trading on the LYDRA/HYDRA pair
LYDRA was first envisioned and presented with the Hydra Whitepaper 2.0:
Interested readers will find a lot of useful information in the linked whitepaper above. Since LYDRA can only be issued in exchange for locking up HYDRA, the circulating supply always remains constant regardless of what happens.
How does it work?
With the upcoming feature, everyone who holds HYDRA can initiate the lockup mechanism, which will freeze the HYDRA inside the wallet and make them immovable (while still stakable via delegation).
Note: A small amount of HYDRA will remain unlocked so that there is enough balance to pay for transaction fees. It is currently set to 5 million gas equivalent (or ~17 HYDRA at the time of writing).
In return, the holder will receive the same amount of LYDRA into the wallet, which can be used and moved freely.
In order to unlock the position, the same amount of LYDRA will be required inside the wallet. For example 1,000 LYDRA can only unlock 1,000 HYDRA.
Note: Staking rewards that accrue into the wallet are not locked and can be used after they reach maturity (2,000 block confirmations).
Launch of LYDRA on Testnet
With this release we are deploying the much anticipated feature of LYDRA onto the Hydra testnet! Anyone can connect and experiment with it by using the staking client version 0.20.8 and launching its testnet version:
Please note that if you are already running a node on testnet, you will need to restart your staking client after block #1,071,300 in order to see the new features. Similarly, previously made delegations should be re-delegated as there is a new delegation smart contract that is not compatible with the old one.
Note: This has no implications for stakers on mainnet!
Additional guides and documentation will be provided in the coming days on docs.hydrachain.org.
Significantly Reduced Delegation Fee
Following feedback about the transaction fees for delegation being too high, we dedicated time into this issue and are happy to present the results:
The new delegation smart contract was optimized to be roughly 10x cheaper than the previous version!
Thanks to the optimizations, smaller stakers are now no longer held back by the “entry-fee”. It also reduces the friction of switching between delegators, which is an important mechanism for the safe and efficient operation of the chain.
Note: The cost optimizations will likely be available on mainnet starting with the staking client version 0.20.9.
Please keep in mind that the testnet is partially used as a playground for developers and there will likely be a few changes before the final version makes it to the mainnet. With that said, we hope that you will enjoy the new features and are looking forward to hear your feedback!
HYDRA is a proof-of-stake blockchain optimized for real-world businesses. It tackles some of the most profound and challenging issues with existing blockchain economies and introduces a truly shared economy with fair treatment to all network participants.