Cosmos launches the cross-chain auction platform Hydro, aiming to efficiently deploy liquidity in the cross-chain ecosystem

ChainCatcher news, Cosmos announced the launch of the cross-chain auction platform Hydro, which is a bidding and governance platform for efficiently deploying liquidity in the cross-chain ecosystem. It is at the core of the "ATOM wars" and a response to the biggest challenge since the inception of cross-chain—token liquidity.

Hydro draws inspiration from the "Curve wars" on Ethereum, applying a similar model to enhance governance and strategic liquidity provision. Hydro will enable Cosmos Hub and other projects to leverage the demand from other projects for adding liquidity of ATOM and other tokens to their systems.

Hydro offers key features such as token locking, voting rights, bidding rules, voting rules, and fund allocation rules. Native token holders will lock their tokens on the platform in exchange for "Hydro locked tokens," granting them influence over funding allocation decisions through a series of periodic auctions.

Projects compete for access to these funds through the governance power of hATOM holders (although Hydro may accept locking multiple native tokens in the future, the current focus is on ATOM/hATOM). This process operates as an auction market. The allocation of funds to projects is temporary (similar to a loan), promoting competition and ensuring resources are distributed to multiple projects over time.

Auctions are held regularly. In each round of the auction, participating projects detail their funding needs, proposed uses, and the amounts they are willing to pay to support hATOM holders. At the end of each round, projects are ranked based on the support from hATOM holders and funds are allocated accordingly.