Hydra Chain is a permission-less open-source blockchain project that came out of the project Lock Trip. Back is 2018 the team behind that project published a document called “LockTrip Blockchain Manifest” which became the defining design document for Hydra Chain. The interesting and unique part is that the document came out of actual problems encountered during the development of the LockTrip dApp, which makes Hydra Chain one of the only blockchain projects to be designed around the actual hurdles encountered during the development of a dApp.
One of the strategies used in the development of Hydra Chain was to use the best open-source technology available. The founders choose that approach because it is the same successful strategy that was used by some of today’s largest blockchain projects such as Litecoin, Qtum, and Bitcoin Cash. Hydra Chain follows a philosophy of implementing the critical economic features needed while using technology that’s proven successful for data transmission on a blockchain.
What Problem Does Hydra Chain Solve?
One of the most difficult challenges in blockchain technology is deciding when and how to switch the economics from inflationary to deflationary. Hydra Chain addresses this through a unique mechanism whereby it can burn as much as 100% of the generated transaction fees at the protocol level, while also maintaining inflationary driven block rewards.
This design has been found to stimulate community growth while also protecting users against price degradation thanks to the ability of the blockchain to convert transaction fees into a permanent reduction in token supply. Unlike other blockchains, in the Hydra Chain tokenomics the total supply of tokens isn’t simply a randomly selected number. Rather it is a direct representation of the actual economy and utility of the system.
Hydra Improves on Crypto Economy
The Hydra Chain attempts to learn from the past economic flaws introduced into blockchain economies, and through that learning to create a healthy and dynamic economic geometry rather than one in which supply halving are predetermined events. Hydra Chain looks at the issue of total supply is a completely new and unique manner.
With Hydra Chain there is no longer any need or relevance to questions such as “When is the next halving”, and “What will happen to price after the next halving.” Instead, the total supply of the system is a direct representation of the actual usage of the blockchain. This gives everyone a fair and transparent means for interpreting total supply and the relation it has to price and transaction volume on the chain. And it gets rid of the speculation that arises from communicating the total supply metric.
Powerful Staking Economy
As mentioned earlier the Hydra Chain is a proof-of-stake blockchain. Anyone is able to become a full node in its ecosystem. All it takes is some HYDRA for staking and a few clicks of the mouse. Stakers are rewarded through block rewards and they receive a high APY. This mechanic helps to protect the chain from potential 51% attacks.
Here are few of the advantages of staking:
- Same APY for all stakers, regardless of HYDRA amount staked.
- Minimal computing power needed.
- Environmentally friendly.
- Accessible to everyone.
- Strong decentralization through hundreds of nodes.
- 100x more secure against “51% attacks” compared to POW.
The unique staking economy created for Hydra Chain guarantees a fixed income for the stakers. Each block yields a predefined block reward which can be adjusted through the distributed governance of the chain via proposals and on-chain voting.
Hydra Governance
Even over the short history of blockchain there have been a number of times where hard forks didn’t work as intended, or when communities became separated due to varied views on proposed changes. These types of events present significant risks to the blockchain and can cause damage or even put an end to a project if they are serious enough. Hydra Chain is fighting this risk by using a decentralized governance protocol that is designed to adapt to a variety of scenarios in a harmless and constructive manner.
There are a number of blockchain settings that have been identified as open to voting by HYDRA token holders. This allows a variety of blockchain settings to be modified “on the fly” so to speak, whenever required. This mechanism gives Hydra Chain increased flexibility and allows for steering by the community in a process of agreement rather than division.
The HYDRA Token
The HYDRA token was released just after 2021 began, at a price of $1.69 and in its first few weeks remained in a range of roughly $1.50 to $2.00. By February 2021 the price began to climb and at the end of February HYDRA tokens were trading above $8.
Price made dramatic gains in March 2021 as the entire cryptocurrency market was in a major bull rally, and by April 4, 2021 the token reached an all-time high of $48.66. Of course, volatility is never far where cryptocurrencies are concerned and two weeks after hitting its all-time high the HYDRA token was down by over 60% at $18.69. Since the price has remained volatile, and as of June 8, 2021 the HYDRA token is trading at $29.52. In addition to the potential price increase HYDRA holders also benefit from an APY of over 285%.
Conclusion
Hydra Chain is a fully permissionless, open source, and decentralized proof-of-stake blockchain that was created out of a combination of the best features of Bitcoin, Ethereum, and Qtum. It unifies these features, and adds a unique economic layer on top that is focused on providing HYDRA holders with a steady and guaranteed income in both USD and HYDRA. Hydra Chain presents an intriguing tokenomics, combining both inflationary and deflationary forces as determined by the market. It is expected that this will enable a very strong shared economy of which all parties can benefit fairly. Whether that’s true or not remains to be seen.
