According to Odaily, Cosmos has announced the launch of its cross-chain auction platform, Hydro. Hydro is a bidding and governance platform designed to efficiently deploy liquidity in a cross-chain ecosystem, forming a core part of the 'ATOM wars'. The platform draws inspiration from the 'Curve wars' on Ethereum, applying a similar model to enhance governance and strategic liquidity provision.
Hydro will enable the Cosmos Hub and other projects to leverage the demand from other projects to add ATOM and other token liquidity to their systems. The platform offers key features such as token locking, voting rights, bidding rules, voting rules, and fund allocation rules. Native token holders lock their tokens on the platform in exchange for 'Hydro locked tokens', granting them influence over fund allocation decisions through a series of regular auctions.
The process operates as an auction market, with projects competing for access to these funds through the governance power of hATOM holders. Although Hydro may accept the locking of various native tokens in the future, the current focus is on ATOM/hATOM. The fund allocation to projects is temporary, similar to a loan, promoting competition and ensuring resources are allocated to multiple projects over time. Auctions are conducted regularly.
In each auction round, participating projects detail their funding needs, proposed uses, and the amount they are willing to pay to support hATOM holders. At the end of each round, projects are ranked based on the support of hATOM holders and funds are allocated accordingly.