When Basilisk meets Kusama canary bird
Basilisk won Kusama parachain slot
The 8th Kusama parachain auction was taken by Basilisk. For those who don’t know what Basilisk is, it’s a new liquidity protocol built for Kusama. Basilisk is designed to be very flexible having various features such as different experimental AMM (Automated Market Maker), liquidity bootstrapping pools (LBPs), or an NFT marketplace.
Basilisk is a canary network of HydraDX and from the statistical point of view, it’s the most successful project of the 2nd batch from Kusama auctions in terms of raised funds by hitting a hard cap of 222k KSM. The only project that overcame Basilisk was Karura in the 1st batch, which raised 501k KSM.
Basilisk will start with two liquidity pools: KSM-BSX and kUSD-BSX. With further development, more pools will be added, especially when HydraDX will get its slot in Polkadot Network.
Basilisk AMM pools will be used as a filter for new assets by allowing them to bootstrap liquidity before entering the HDX Omnipool by using Basilisk LBP. Because of the further bridging of HydraDX and Basilisk (Polkadot-Kusama bridge), the liquidity bootstrapped on Basilisk can be then easily deployed on HydraDX, right into the Omnipol, in a very smooth way.
Simply put, Liquidity Bootstrapping Pool (LBP) is the solution for a project, who wants to distribute tokens to the users without the limitations of a rapidly increasing price curve, so there is a bigger chance to distribute tokens for a wider userbase rather than to one whale using a bid bot. LBP is the advanced fundraising technique used by small projects, that are struggling with liquidity. If you remember HydraDX LBP that occurred on Ballancer, that's the right example, but expect much more improvements.
Important news from HydraDX
HydraDX did a few announcements that are worth mentioning. The first is the HydraDX Council Election, which happened in mid-September. This is a big step for the gradual decentralization of the HydraDX network. The Council consists of 13 members with 6 seats reserved for the founders and the remaining 7 for members that were elected by the community. Some of those publicly elected are our friends from the DOT Validator Alliance — Jimmy from Stakenode, Vlady from PromoTeam Channel and Sik from Criffferent.
One of the most important news is also this one, that they are preparing a proposal, where they will retroactively change the percentage distribution of the HDX tokens in the way, that the participants of HydraDX LBP amount of tokens will increase from 5% up to 15% of the total HDX supply. This will be achieved by tripling the HDX wallet balances resulting from the LBP, as well as paid staking rewards and treasury payouts.
What does it mean in the context? By increasing the number of tokens to the LPB participants by 10%, the 10% of HDX tokens will be taken from the future rewards for collators and post-mainnet liquidity mining, which will be reduced from 75% to 65%. The allocation of founders & investors will remain 15%.
Will it have some impact on prices? If you consider the Market Cap as the Current price times Circulating supply, by adding 200% amount of coins, if the Market Cap will remain the same, the price of the HDX token will logically go to 2/3 into $ 0,0385. While the implied fully diluted valuation (FDV) of HydraDX hit $800 million, it will be lowered by 2/3 to approx. $267 million.
HDX distribution after the proposal is implemented:
- 5% Stakenet & Incentivized Testnet
- 15% Founders & Investors
- 15% LBP Participants (unsold HDX moved to treasury)
- 65% Collators & Liquidity Mining
This proposal will be a result of a referendum by the HydraDX Council after it settles down a bit.
There are also some important results from this move.
- the value of tokens owned by Founders & Investors will drop by 2/3,
- the proportion of the Founders-owned tokens and LBP participants-tokens will equal, that is great news for decentralization of the project,
- the future APY for staking HDX before mainnet will decrease,
- finally, the upside potential for the HDX token will be even greater, which is motivating for investors in this very competitive space.
You can definitely check the latest AMA with the founders of HydraDX to get even more information.
If you like this article, consider supporting us by the nomination of your tokens to Kusama or Polkadot validator going by the POLKADOTTERS name.