The opening of 2024 also marks the 1-year anniversary of our beloved Omnipool. Instead of writing an emotional reflection on the past year, we decided to celebrate the Omnipool’s first bday in a different way: By launching a very special product.
We are happy to announce the start of HydraDX Referrals. Inspired by the success of our existing Staking Program, Referrals introduce another sustainable mechanism to stimulate behavior that is beneficial to the Protocol by redistributing a portion of the revenue.
Everyone who helps onboard users to HydraDX will start accumulating fee rewards from the Omnipool trades of the referred accounts. It works the other way around, too: Referred users receive fee rewards as cashback on their trades. The referral rewards are financed using a portion of the (dynamic) asset fees which are charged on top of every Omnipool trade. Referrers with higher volumes of rewards advance through 5 Tiers that grant them higher rewards.
In parallel to the launch of referrals, the HydraDX Governance also tweaked the rewards mechanism for staking. We are now channeling more revenue to the staking pot, resulting in a higher yield for all stakers who help keep HydraDX secure by actively participating in the Governance of the Protocol.
How do referrals work?
The goal of the HydraDX Referrals Program is to create long-term incentives to help onboard users to HydraDX. Anyone can participate by registering their unique referral code. Users that are onboarded with a referral code are linked to the account of their referrer. From this point on, the referrer accumulates rewards from the fees generated by all Omnipool trades of these users.
Referred traders are also put in the advantage - they receive cashback from their Omnipool trades in the form of fee rewards. In other words, it makes sense also for existing accounts to attach themselves to someone’s referral code.
Referral rewards are accumulated in HDX and can be claimed at any time. The rewards are sustainable as they are financed from the Omnipool asset fees that incur upon every trade. Depending on the current volatility, asset fees can be anywhere in the range of 0.25% to 5.00% of the order size (learn more in our fees docs).
50% of the asset fees are channeled towards LPs. If the trade in question does not fall under a referral, the remaining 50% of the asset fee is redistributed to the HDX Stakers. In cases of referred trades, this amount will be split between Staking and Referrals. An exception to this are HDX asset fees, which are channeled in their entirety to the Staking pot (learn more in our staking docs).
Besides the current rate of asset fees, there is one more factor which determines the exact amount of rewards received: the Referrer Tier. There are 5 tiers, everyone starts at Tier 0. Referrers level up as they hit certain absolute thresholds in terms of total volume of referral rewards. Here’s an overview:
Create your referral code and lfg:
https://app.hydradx.io/referrals
More staking rewards
Finally, a few words on the restructuring of Staking rewards which coincided with the launch of Referrals. Until recently, Staking rewards were financed by a single revenue stream: the full amount of asset fees from HDX trades. Now, with the latest changes outlined above, stakers also receive between 10% and 50% of the asset fees from all other trades (non-HDX).
On to a very hydrated 2024! 🚰