$HDRO Farming Roadmap

Overview

A year has nearly passed since Hydro’s Mainnet launch in January 2024, which was followed shortly by the the Hydro ($HDRO) Token Generation Event (TGE) which was scheduled for March 2024. Over the past year, Hydro Protocol has grown into the leading LST (Liquid Staking Token) project on the Injective Network, continuously adding robust features to advance both the Hydro and Injective Ecosystem.

Today, Hydro Protocol has evolved into Injective’s all-in-one DeFi protocol, offering key functionalities such as LST minting, LST-Fi, loop staking, auto-compounding and farming. Beyond these, significant preparations are underway to introduce not only traditional lending but also synthetic asset lending within the Injective ecosystem after March 2025.

As we move forward, the growth and utility of hINJ will remain at the core of Hydro Protocol’s roadmap. With over 2 million hINJ already minted and actively utilized as the first LST within the Injective ecosystem, the token is poised for expanded use in lending and synthetic lending products.

Given this progress, the farming utility of hINJ, which has been integral to the ecosystem over the past year, now requires thoughtful discussion about its future direction.

Hydro is building a Synthetic Asset Lending platform that adds a feature into Hydro’s core features which further compliments the $HDRO farm

Current Situation

As more hINJ tokens are minted, Hydro Protocol’s ecosystem benefits from automatic HDRO buybacks driven by accrued fees. This creates a direct link between hINJ adoption and HDRO value accrual, making farming a critical utility at this stage of ecosystem growth.

With Hydro Protocol entering a phase of expansion, the continuation of farming incentives is essential. However, given the increasing utility of hINJ and our commitment to ensuring HDRO’s long-term value, we propose a strategic adjustment to the incentive structure:

1. Farming incentives: Reduced to 75% of the previous allocation.
2. Booster incentives: Reduced to 50% of the previous allocation.

This calibrated approach will balance ecosystem growth with HDRO value preservation and inflation control.

Proposal Objectives

This proposal aims to achieve two key outcomes:

1. Sustained Growth of hINJ
   Extending farming incentives will encourage the continued adoption and use of hINJ, ultimately driving HDRO buybacks and enhancing its value.
2. HDRO Value Preservation
   By reducing incentive allocations, the protocol will significantly mitigate HDRO inflation, reinforcing its long-term value.

We are confident this dual-pronged approach provides a win-win strategy for the community and the protocol, ensuring growth and value are optimized.

Next Steps

We are committed to continuing the expansion of hINJ and HDRO use cases, believing that this marks the beginning of a pivotal chapter in Hydro Protocol’s journey.

To finalize this proposal, we invite the community to participate in discussions and provide feedback. Following this, a governance vote will be conducted to determine the direction of this initiative.

Thank you for your continued support.

Sincerely,
The Hydro Protocol Team