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The 3x

Published date: November 29 2021
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Dear Hydraheads,

The last weeks saw the democracy of our tribe take shape and come into action. With your help, the initial members of the HydraDX Council were elected to represent our common interests. More recently, the first community referendum was successfully passed, which allowed for 61 tribesmates to receive their foregone staking rewards after having had their account balances locked in “Nirvana”.

Now that the machinery of democracy is oiled up and running, the HydraDX Council has decided to launch a community referendum which will shape the future of our tribe. The subject of the referendum is:

Once HydraDX enters mainnet as a Polkadot parachain, multiply by 3 the balances of all HDX wallets, excluding the following addresses:

0x6d6f646c70792f74727372790000000000000000000000000000000000000000 (HDX Treasury)

0x0abad795adcb5dee45d29528005b1f78d55fc170844babde88df84016c6cd14d (Founders & Investors)

If the referendum passes the upcoming community vote, all HDX balances resulting from LBP purchases, staking rewards and Treasury payouts will be tripled. This effectively means that the current HDX allocation of the community will grow from ~5% towards ~15% of the chain, thereby exceeding the allocation of founders & investors (which will remain unchanged at 15%).

The Council believes that this is an important step towards the decentralisation of the protocol which will balance out the power relationships. To find out more about the motives underpinning the referendum, please refer to the previous HydraDX blog post.

The referendum is initiated as a remark which will be posted on-chain. The actual tripling will take place once HydraDX gets onboarded as a Polkadot parachain. This is also the relevant moment for the snapshot which will be taken of all eligible HDX addresses, and which will determine the resulting balances.

The proposal has been approved by the HydraDX Council and is currently in the queue to enter the next community voting round which starts on Monday, November 29th. Once the referendum has started, you will have 3 days to voice your opinion. Please follow the HydraDX social media channels where the vote opening will be announced.

In the meantime, you can get yourself familiar with the weighted voting mechanism which is briefly summarized below in this post.

How Weighted Voting Works

There are 2 factors which determine the weight of every vote in a community referendum. The first factor is the HDX stake associated with the vote. The second factor is the so-called conviction multiplier which is determined by the amount of lock periods for which the voter is prepared to lock the HDX stake. Locked tokens can still be used for staking and democracy, the main limitation is that they cannot be transferred.

The weight of a vote is calculated using the following formula:

vote_weight = hdx_stake * conviction_multiplier

The table above shows how different lock periods influence the weight of a vote. Please note that a vote which is cast without any lock period has only 10% of the weight of a vote with 1 lock period (6 days). It is also important to consider that lock periods should not have any negative impact until mainnet, as HDX transfers are blocked until then.

Other useful links which will help you prepare for the community referendum:

That’s it for now, happy tripling!

HydraDX AMA, January 2022
HydraDX Crowdloan Update
HydraDX Omnipool (part 1)
HydraDX November Update
Road to Hydration (part 3)