HydraDX — Balancer LBP “step-by-step” tutorial
Liquidity Bootstrapping Pool is an adjustable Balancer smart contract that is used for initial distribution and price discovery of new assets. It uses a constant selling pressure and has a limited time duration, during which price continually drops if there is no demand.
HydraDX will be distributing $HDX via Balancer.
Starting on Monday 08.02.2021 at about 4 pm GMT (this is still subject to change), expecting to conclude after 3 days on Wednesday 11.02.2021 (block 11817007 to block 11836793)
You will be using $DAI cryptocurrency to swap $HDX from Balancer LBP
Here is a step-by-step guide, starting with Metamask installation, how to swap $DAI to $xHDX on Balancer LBP. Let’s go:
1. Install Metamask
First, go to https://metamask.io/download.html.
For this tutorial I will be using the Firefox browser but Metamask works with Chrome, Firefox, Brave & Edge. When You go to the Metamask download page it autodetects Your browser and sets download for it, but You can easily change the browser with buttons.
Click “Install Metamask for Firefox”, then when pop-up comes up asking to confirm and add Metamask extension to Your browser — click “add”, and next, on the welcome screen, click “Get Started”
This will take You to the wallet creation page. Click “create new wallet”, and it will ask You to set a password section first. After confirming the password, It will take You to the seed phrase backup section.
Please store these seed words safely as this is the most vulnerable info regarding Your wallet.
When You will backup Your seed phrase, on the next screen, please put Your seed words in the current order, for wallet creation confirmation.
Congratulations! You passed the test — keep Your seed phrase safe, it’s Your responsibility.
You can start swapping now!
2. Inject wallet with DAI and ETH
To be able to interact with HydraDX Balancer LBP You will need $DAI to swap to xHDX and additionally some $ETH for ethereum network transaction fees.
Remember that each swap on Balancer or any other DEX, need $ETH for transaction fees.
And please keep in mind that last days' transaction fees are really high. You can always check the current gas fees in eth gas station
This is the basic screen which You will see after you finish setting up Your Metamask account — with 0 $ETH balance on Your account and only $ETH in the “assets” section.
You interact with Your Metamask wallet by clicking the Metamask icon in right upper corner in Your browser extension section
Please first transfer some $ETH to Your new account wallet. I think that You should inject 0.1 $ETH to be able to cover transaction fees for Balancer LBP swaps.
When You have $ETH in Your wallet to secure transaction fees, the next step would be to first add $DAI to “assets” visible for Metamask. To do so, please click “Add Token” and go with “custom token”
$DAI contract address to add: 0x6b175474e89094c44da98b954eedeac495271d0f
When You will paste $DAI address to the “token contract address” section, Metamask will autodetect $DAI stable coin. Please click “next” and Metamask will show Your $DAI balance.
Click “Add Tokens” and from now Metamask will show the balance of $ETH and $DAI in the “assets” section.
Now You should secure $DAI to interact with HydraDX Balancer LBP and swap $DAI to $xHDX. You can swap any erc20 token to $DAI for example with Uniswap or any other supporting DEX, or transfer $DAI directly to Your Metamask wallet. ($DAI can be obtained for example on Binance exchange).
After You have $DAI secured in Your wallet, along with $ETH for transaction fees, You are ready to interact with HydraDX Balancer LBP.
3. HydraDX Balancer LBP interaction and swap
Starting on Monday 08.02.2021 at about 4 pm GMT (this is still subject to change), expecting to conclude after 3 days on Wednesday 11.02.2021 (block 11817007 to block 11836793)
Weights of the LBP will gradually change from xHDX/DAI = 92.5/7.5 to xHDX/DAI = 17.5/82.5 during that period, creating downward pressure.
The pool will be created with 500mm (500.000.000) xHDX tokens (5% of total supply) and 1.2mm DAI.
The initial price of the HDX token is 0.0296$.
You will be using $DAI cryptocurrency to swap $HDX from Balancer LBP
Go to Balancer HydraDX LBP Pool (https://balancer.exchange/#/swap/0x6b175474e89094c44da98b954eedeac495271d0f/0x6FCb6408499a7c0f242E32D77EB51fFa1dD28a7E)
Before You will connect Your wallet with HydraDX Balancer LBP, it’s good to first add $xHDX to Your Metamask assets, so it is visible in Your wallet just after the swap.
Open Metamask and do “Add Token” from main section. Go for “custom token” and input $xHDX contract address:
$xHDX address: 0x6FCb6408499a7c0f242E32D77EB51fFa1dD28a7E
After You added $xHDX to Your token list and it is visible in the “assets” section, You are fully ready to start swapping $DAI for $xHDX
(Please keep in mind that $xHDX is the erc20 representation of $HDX and it is and will only be used to claim native $HDX token on Stakenet — with a one-way bridge from erc20 $HDX representation (from Balancer LBP) to a Substrate native $HDX.
On the native Substrate chain, $HDX holders will be able to stake and receive rewards (Stakenet and staking tutorials will be released beforehand). Rewards from $HDX staked by founders & investors at this stage will go towards on-chain treasury. An additional 5% will be claimed in this Stakenet & Incentivised Testnet period. These rewards will be used as a stress test of the maximum number of validators, transactions, and other parameters and allow holders to receive an additional $HDX. This will be also time for bootstrapping HydraDX validator sets.)
- Connect Your wallet to HydraDX Balancer LBP with the “connect wallet” button on HydraDX Balancer LBP website
- when the Metamask pop-up will show, please click “Next” and then “Connect” to connect Metamask with the Balancer LBP webpage.
From now on, Your wallet is connected with HydraDX Balancer LBP and You can start swapping $DAI to $xHDX as soon as the pool will open.
Your $DAI balance should be visible in the swap balance and when the $xHDX pool will open, it will give You swap rates. (now it shows “not enough liquidity” as the pool is not launched yet).
Possible HydraDX purchasing strategy at the LBP auction on Balancer:
Assuming that the auction will be similar to $PERP (psychology of people is the same), the best time to buy HydraDX will be two green zones. (around 12h after the LBP event starts, and the consolidation period around the second day of LBP).
Of course, many people may try to play similar, so the best strategy to approach LBP is to split Your total desired investment into two / three, or even four batches. Please keep in mind the high ethereum tx fees last few days.
The chart shows that the most expensive moments for shopping are the very beginning, the middle and the very end of the auction, so I would avoid them in the first place. Also, the right strategy for LBP should be to split your orders into a few more rather than one, because no one knows what happens later.
!!After You swap $DAI for $xHDX (erc20 HDX version) on Balancer LBP there is nothing more You should do!!
HydraDX is following the same patch to Polkadot. xHDX is just a means to get $HDX on the native HydraDX chain. After LBP ends, You will be able to claim xHDX, to mint $HDX via the HydraDX claims UI portal.
The claim UI and a guide for how to redeem $HDX will be released soon.
After you claim your native $HDX tokens on the Hydra DX chain, you can nominate Stakenode validator nodes, via HydraDX UI, to receive more $HDX in Incentivised Testnet period.
For all of You interested in validating the HydraDX network, system requirements and node setup instructions will be explained in separate articles.
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