What is Hydra?
Hydra is a proof-of-stake blockchain designed with a unique set of economic features. It is unique because it uses both inflationary and deflationary mechanisms to make its economy work, while allowing users to accept the fact to determine the total token supply.
In addition to the unique economics introduced to Hydra Chain, the project also features a fixed inflation model designed to stimulate market participants and token creators to contribute fully to the essence. project decentralization.
Hydra Chain is designed based on the production version of the open source blockchain Qtum. That blockchain is forked from Bitcoin Core and has an additional Account Abstraction Layer that supports the Ethereum Virtual Machine (EVM).
Hydra Chain uses the same famous UTXO transaction model used by Bitcoin, but also uses a proof-of-stake consensus model. This design is taken from the BlackCoin project and is an evolutionary step that combines the best of Bitcoin and Ethereum.
They are all built on a proprietary blockchain that is able to remain decentralized and support Ethereum dApps while achieving impressive transaction performance per second.
What problem does the Hydra chain solve?
One of the toughest challenges in blockchain technology is deciding when and how to shift the economy from inflation to deflation. Hydra Chain solves this problem through a unique mechanism whereby it can burn up to 100% of transaction fees generated at the protocol level, while maintaining block rewards due to inflation.
This design was discovered to stimulate community growth while also protecting users against price degradation thanks to blockchain's ability to convert transaction fees into a permanent reduction in supply. token grant.
Unlike other blockchains, in the Hydra Chain token chain, the total token supply is not simply a randomly chosen number. Instead, it is a direct representation of the actual economy and utility of the system.
In terms of inflation, the reward block mints new HYDRA tokens and increases the total token supply, while the deflation side takes 50% of the transaction fees and burns them at the protocol level, thus reducing the total supply. token grant.
This creates a unique constant battle between the inflationary and deflationary forces of the blockchain, providing a predictable economy that is attractive to investors as there is no price decline. of tokens due to inflation.
This is a market-oriented approach that uses supply and demand to determine where the cut-off point between inflation and deflation lies, thus maintaining an adaptive economy based on the use of tokens. reality.
The ecosystem starts with the creation of 18.5 million HYDRA tokens in circulation and during the initial growth phase of inflation blockchain is the dominant economic force used, meaning the total supply will increase up. As adoption grows, the inflationary aspect of blockchain will gradually be offset by the deflationary force of 50% of transaction fees being burned regularly.
The balance between inflation and deflation is maintained through the HYDRA fiat price oracle that determines the blockchain's gas fees at a fixed fiat cost. This is a key feature of blockchain that enables both scalability and predictability – both essential for the success of dApps.
The other 50% of gas fees that are not burned don't trust the wallet addresses of the smart contract creators where the fees are being spent. In other words, these fees will be passed on to the dApp creators, which makes Hydra Chain a unique sharing economy that rewards developers for adding to the ecosystem and incentivizes increase chain adoption
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