Welcome to 2025 and a brand-new year of Hydranet! We’ve kicked off the year strong with major updates to our Lithium protocol and our order book. We tackled key issues related to filled, partially filled, and failed orders, refining price updates and adapting to all breaking changes introduced by Lithium V3. The best part? We’re now even more cost-efficient with an even lower blockchain footprint than before. Love to hear it! Now, let’s dive into what January had in store for us. And don’t forget to check out our Yearly Recap from last year!

Major Update for Alpha Testers

January marked a significant milestone with a major Web DEX update rolled out to our Alpha testnet group. This update focused on two key areas: Lithium and the order book.

Lithium V3
Lithium reached its third iteration with V3, bringing major improvements to its state channel efficiency. During initial Alpha testing, we discovered that Lithium faced challenges when multiple state channels needed updates simultaneously, such as when a single trader matched with multiple trades at once. This is in fact not a rare event. You may for instance have seen this happening when trading on a CEX and noticed that a market order often fills several smaller orders when executing. Hydranet is all about trading efficiency and we want to bring the same seamless experience to our platform.

Previously, Lithium could only handle state channel updates for different assets sequentially, leading to delays in swaps. To fix this, we initiated a major rework that resulted in Lithium V3, which introduced:

• Independent Asset Channels: Channels for different assets can now be updated separately, ensuring one asset channel doesn’t hold up others.
• Parallel Swaps: With independent channels, EVM swaps on Hydranet’s DEX can now be processed simultaneously for improved efficiency.
• Lower Fees: Enhanced channel management led to a 10% reduction in gas costs for Lithium on-chain interactions (such as opening and closing state channels).

Order book Enhancements
On the order book front, we resolved several inefficiencies in how orders are handled. Early testing revealed irregularities in failed swaps, with the orders not re-instantiating upon failure and the trading price showing an erroneous value. With the update reaching our Alpha testers, we saw the following changes to our order book:

• Proper re-instantiation of failed orders.
• Improved limit order processing.
• More accurate detection of completed swaps.

All these improvements were pushed to our Alpha testers in January and the results so far are looking promising!

Goals for Q1 and Q2

A new year means new objectives, and during January the goals for the first half of 2025 were released, focusing on four core pillars:

1. Security: State Channel Backups, Watchtowers, more Automated Testing. Security is the foundation of everything we build.
2. Usability: Complete Simple Swap logics and UI enhancements. We’re committed to making decentralized trading as intuitive as possible.
3. Scalability: Lithium v3 which comes with parallel handling of swaps and even lower on-chain footprint. Scaling to meet the demands of tomorrow’s decentralized economy.
4. Releases: Lithium v3 Release, increased number of Alpha testers, Open Beta, Mainnet Tests and more. Our work has value only when it’s in the hands of our users.

Hydranet at Defi Day

Just in time for Lithium V3’s release and new Alpha testing phases, Hydranet was invited to present at International DeFi Day 2025. Our very own Joe and Fedeparma took the stage to showcase Hydranet’s vision and roadmap, capping it off with a live demo featuring real-time BTC <> ETH off-chain swaps. Judging by the reactions, the hosts of the event had never seen anything like it before and to say they were impressed would be an understatement!

Missed the event? You can rewatch the full International DeFi Day 2025 using this link, or skip to Hydranet’s showcase here.

We are looking forward to attending more events like the International DeFi Day in the future!

“It all comes back to Bitcoin”

Shortly after the International DeFi Day, Lightning Labs announced that Tether is coming to the Lightning Network!

“With the security and decentralization of bitcoin and the speed and scalability of Lightning, USDT will bring hundreds of millions of users and trillions in volume.”

While this of course wasn’t our announcement, it is still huge news for Hydranet. So what does it mean for us?

It means we are perfectly positioned for the future! With Lightning adoption set to skyrocket. While other off-chain wallets exist, Hydranet is the only network that enables seamless Bitcoin-to-ERC-20 swaps and bridging of Lightning USDT to Ethereum USDT. We’re not just building a DEX, we’re shaping the next era of decentralized finance.

Stay tuned for more updates, and as always, help us spread the word about Hydranet!

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