What is Hydro Protocol (HOT)?

Hydro Protocol (HOT) is a project aimed at helping experienced and ambitious people realize that the most effective way to extract monetary value from cryptocurrencies at the moment is to create a trading platform for people. Use to participate in transactions on a peer-to-peer network. By looking at examples like Bittrex and Binance, anyone can see how large potential capitalization is in the crypto exchange business.

By creating a uniquely built set of smart contracts, all open source, Hydro Protocol allows to cut the cost and the time and effort of developing from scratch. Building your own exchange platform is extremely difficult and expensive, and the Hydro Protocol team will allow any business, regardless of size and people, to transfer and trade tokens without a hitch. Fees like trading commissions are charged instantly and securely, and the team believes in the total liquidity they strived to deliver on every product they create.

How does it work?

HOT bank liquidity by offering incentives to professional market makers. Professional market makers, also known as liquidity providers, have inventories of cryptocurrencies for trading. Takers remove liquidity when they transact with liquidity providers. Liquidity providers can make money buying a particular cryptocurrency at a certain price and selling it later for a higher price. These liquidity providers can also now receive HOT rewards for providing liquidity to new exchanges. However, there is one tricky point. To qualify for periodic HOT distribution, the liquidity provider needs to hold HOT.
The Hydro protocol is part of the protocol stack. It works at the network layer of the decentralized exchange. There’s a decentralized app, or dApp, that sits on top of it and provides a user interface. The 0x protocol lies underneath it and provides order resolution for the blockchain.

It works by keeping a database of liquidity provided by the producers and eliminated by the participants. This data is used to determine the periodic HOT distribution.

Additionally, the protocol controls, which are exchanges, have the authority to execute orders. By managing the list of permissions, the protocol allows cooperative exchanges to share liquidity. When exchanges decide to incorporate their liquidity, it is known as a liquidity pool.

To gain access to the liquidity pool, new decentralized exchange can also hold the HOT level. This is called zoning. After a deposit, the token is only returned to exchanges after the exchanges themselves have had a certain amount of liquidity over time.

This pooling of liquidity is also possible without the Hydro Protocol through the open order model of Protocol 0x. However, order and order conflicts would arise without additional management provided by the Hydropower Protocol. Technically can still run ahead in the liquidity group. However, such behavior can be punished through the HOT governance mechanism.

This management mechanism is also used to manage liquidity group membership. It is used to determine the threshold of contribution for membership of the liquidity group.

Finally, the Hydro Protocol handles the distribution of transaction fees. DDEX is a working example of a decentralized exchange that uses the Hydro Protocol at the network layer. The DDEX transaction fee is 0.1%. Hydro Protocol is responsible for distributing 0.1% transaction fees.

Use cases

Centralized exchange

Industry-leading exchanges are actively buying and investing in DEXes. Hydro allows existing platforms to connect their liquidity into a decentralized marketplace easily.

Upgrade your DEX

Older DEX protocols struggle with poor liquidity and inactive markets. Hydro gives your broker the core features needed for traders and market makers to thrive.

Empowering #DeFi projects

Lending protocol, prediction marketplace, and countless other DeFi projects can use Hydro to build unilateral and multilateral marketplaces easily.

Multi-method development

Hydro smart contract that has been compatible with MultiChain since day one, allowing developers to seize the opportunity across many different blockchains.

Benefit of HOT

Quick deployment

Hydro SDK allows you to create an exchange in minutes, greatly reducing deployment time and costs.

Confidential and audited

Hydro Protocol contracts are audited by a leading third-party smart contract security company.

Flexible fee structure

Hydro transitioners may charge fees according to a percentage of traded tokens (no third-party tokens are required).


Hydro Protocol is creating a network transport layer protocol to encourage collaboration between decentralized exchanges. Today, decentralized exchanges have the potential to become exchanges of the future. However, barriers to widespread adoption and use are preventing them from reaching out. With that in mind, Hydro wants to create a set of middleware solutions to remove these barriers.

You can check the HOT price here.

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