Next-generation network transport layer protocol for hybrid decentralized exchanges.

Decentralized exchanges offer trustless non-custodial trading, improved transparency, and inter-exchange sharing of liquidity. Despite these fundamental advantages, decentralized exchanges today account for a negligible percentage of the overall transaction volume. This lack of adoption is due to a combination of several factors: barrier to entry, performance and usability issues, susceptibility to arbitrage, and a lack of economic incentives for liquidity sharing.

Hydro is a network layer protocol for high performance decentralized exchanges and marketplaces with built-in incentives for coordination.

The Hydro Protocol (HOT) defines the rules for executing decentralized orders and provides the mechanism for order matching. Hydro utilizes 'Federated Liquidity Pools' (FLP) to address the issue of liquidity sharing among various decentralized exchanges.

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The Hydro Protocol Token (HOT)

As described above, the issue of liquidity sharing amongst decentralized exchanges is both a technical problem and an economic one. The Hydro Protocol Token exists to facilitate and coordinate the formation of shared liquidity pools. There are 3 main uses for HOT tokens:

Pool Membership

New decentralized exchanges looking to bootstrap liquidity can stake HOT tokens to gain membership into existing liquidity pools. The specific amount for admission is set by the members of each individual pool.

Incentive Mechanism

The only way to get back staked tokens is by contributing liquidity over time, providing additional incentive for all parties to contribute liquidity to the pool. Governance mechanisms will be provided for punishment of exploitative behaviors such as front-running .

Bounty System for Market Makers

New exchanges typically bootstrap liquidity by inviting professional market makers onto the system. An individual exchange or a pool of exchanges can pre-allocate HOT tokens into a smart contract that dispenses pay to market makers based autonomously.

Team Members


Tian Li




Kevin West

B.S., University of Washington, Computer Science

YC Alumni




David Qin

Teenage Hacker

Blockchain Full Stack Engineer


Bowen Wang

B.A., New York University, Econ

ZhenFund Blockchain Analyst


Scott Winges

B.S., University of Washington

Atmospheric Scientist

Hydro U.S Community Manager


Shanchuan Yin

B.A., Colorado College

Cultural Anthropologist

UN Research Analyst


Garry Tan
B.S., Stanford University, Computer Systems Engineering, Initialized Capital Managing Partner, Y Combinator Partner, Palantir
Alexis Ohanian
B.A., University of Virginia, History, Co-founder of Reddit, Y Combinator Partner
Yusen Dai
M.S., Stanford University, MSE, Partner of ZhenFund, Co-founder of Jumei (NYSE: JMEI)
Jia Tian
B.S./M.S., Tsinghua University, CS, Served as Chief Scientist in, Advisor to ZCash

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