1- What is the Purpose of the Hydranet DEX?
The Hydranet DEX provides solutions for some of the biggest problems in the cryptocurrency ecosystem. Here are some examples:
B- Cross-Chain Real Asset Swap
Scalability is one of the biggest problems in the blockchain industry today. Networks are typically limited in how many transactions per second they can perform and the ever-increasing demand for transactions therefore causes congestions on the networks. Expanding the network to address the congestion increases energy consumption and hardware costs, and for the user, transaction fees rising to astronomical levels is usually what awaits.
The Hydranet DEX can mitigate this problem with its use of Layer 2 technologies. These off-chain technologies allow users to trade as much as they want without the need to submit each transaction to the blockchain. The result is cheap trades with fast processing time, typically around 1 second, and it will not be affected by an increased demand for off-chain trades.
B- Cross-Chain Real Asset Swap
The cryptocurrency ecosystem consists of assets traded on different networks and chains. By default, these networks and chains have no connection with each other, so exchanging crypto assets between them is a practical problem. The standard method that traditional exchanges use is wrapped tokens. But this ultimately means that users need to trust the party that created these tokens, and, after all, the wrapped token is not the real asset.
Here is a practical example:
Imagine two different networks, Bitcoin and Ethereum. Transferring assets between addresses on the chain is easy. But how would you go about exchanging assets between the chains? To exchange BTC for ETH? That would require a transfer between the two different chains, which isn’t possible. But Centralized Exchanges (CEX) do it all the time! Or do they? CEXs use wrapped tokens for these actions. When you deposit assets to a CEX you will receive a representative token for this asset. And so, when you trade your BTC for ETH on the CEX you do this with representative tokens for BTC and ETH. These tokens have no connection to the blockchains and lacks real value outside the exchange on which you are trading. This solution is exploitable and forces you to simply trust the exchange.
The Hydranet DEX doesn’t require wrapped tokens. The combination of Layer 2 technologies on Layer 3 allows you to seamlessly trade native assets across different chains. You don’t have to trust anyone more than yourself.
C- Privacy & Security
"Not your key, not your coin", a famous saying within the crypto space and means "if the private key doesn’t belong to you, your assets don’t belong to you". Privacy and Security is always a hot topic in the crypto community and relates somewhat to the content in the example above. Cryptocurrency wallets are typically identified via a public key. Think of the public key as your house address, it is public so that people can visit you. However, to enter your house and to get access to your valuables, you would need the house key. This would correspond to the private key in the crypto space. The private key proves ownership of your assets and allows you to make transactions with them.
Exchanges with centralized structure have wallets in which they store their users’ assets. You deposit your assets to the exchange via a public key. This public key is controlled by the exchange, which means that the exchange will be in control of your private keys as well. Using the house address analogy again, this means you just moved all your valuables from your house to a house controlled solely by the exchange. If the exchange closes or stops its service, you will not be able to access your assets and transfer them elsewhere. You must simply trust the exchange to send you your assets upon request.
Furthermore, central exchanges are based on membership principles and require you to verify your identity through what is commonly known as "Know Your Customer" (KYC). This way, exchanges typically have access to your personal information such as name, citizenship, phone number, email address, house address and more. Some exchanges don"t require KYC, but still require some form of personal information from you.
The Hydranet DEX has its own built-in wallet. This means that you are in control of the private keys to your assets, not anyone else! The Hydranet DEX also doesn’t require KYC or any personal data at all. Off-chain trades furthermore means that there exist no trade records for someone else to find.
Simply deposit your funds on the Hydranet DEX and enjoy maximum privacy & security. Just remember to safely back up your wallet password and seed-phrases!
D- Price Effects
The Hydranet DEX is built upon order book logic and allows both limit and market orders. This means that users do not have to suffer from price impacts when trading, or be exposed to front-running bots, which is often the case on today"s traditional DEXs.
E- Impermanent loss
The Hydranet DEX being built upon order book logic also means that it does not use pooled liquidity. Impermanent loss for you as a liquidity provider is therefore not an issue.
E- Maker Rewards
Liquidity providers are furthermore rewarded with a share of the DEX trading fee through Hydranets unique “Taker-pays-maker”-model. 60% of the trading fee goes directly to the liquidity provider, which is rare on traditional DEXs.
2- Running the Hydranet DEX
The Hydranet DEX is an application that runs on both Windows and Linux operating systems. You can download the application from Hydranet.ai for free and without submission of any type of personal data. The Hydranet DEX is not published as a website on a central server, neither does it have a mobile application.
Opening the Hydranet DEX for the first time will start the wallet setup. The user will be asked to create a password for the wallet, after safely saving the seed. The seed consists of a set of complex words used to back up your funds. Make sure to store them safely and do not share them with anyone. When the wallet installation is completed, you will have access to the area presented in section 3 below.
3- What Parts Does the Hydranet DEX Consist of?
The Hydranet DEX interface allows the user to navigate between the following 7 areas.
In this area you can see a list of all the coins supported by the Hydranet DEX and your corresponding assets. You will see send - receive buttons for each asset to deposit and withdraw money from your wallet.
This area is divided into 2 sections for each cryptocurrency.
The Transactions tab displays the transaction history for the corresponding coin.
The Channels tab is for HUB connection and channel rental operations. To trade your assets on the DEX, you must first connect to the HUB. When the HUB connection is active, you need to rent a channel. You need to specify a time period and the amount you want to trade for the channel rental.
Chain synchronization is also managed from here.
This is the area where you can trade your assets through pairs supported by the DEX. The buy-sell chart of the relevant pair consists of the order book, the order history, and the sections where the buy and sell orders are entered. It has a normal stock market appearance.
D- Easy Swap
The easy swap area offers quick and easy trading between pairs without an order book. You do not need to rent a channel to use this feature. If you do not have a channel, the system automatically opens a channel and performs your transaction.
Vortex is a trading bot built in the Hydranet DEX. The purpose of Vortex is to manage users" liquidity for a trading pair selected by the user, to create passive income.
You can find video user guides for the Hydranet DEX in this tab. You can get information about wallet setup, deposit and withdrawal, Hub connection, channel rental, and all trades.
In the Hydranet DEX settings tab, you can set the language and interface preferences, manage wallet backup and version updates.