Proposal type: CP-4
Author: jgreen (Integrations@HydraDX)
Technical/non-technical proposal: Technical proposal
Date proposed: 2023-02-02
We propose to open HRMP communication between Centrifuge and HydraDX with subsequent intent to list CFG into the Omnipool.
HydraDX is a next-gen DeFi protocol which is designed to bring an ocean of liquidity to Polkadot. Our tool for the job the HydraDX Omnipool - an innovative Automated Market Maker (AMM) which unlocks unparalleled efficiencies by combining all assets in a single trading pool.
The procedure for opening the channels is as follows:
- HydraDX proposes to open the HydraDX to Centrifuge HRMP channel.
- Centrifuge proposes (a batch) to accept the HydraDX to Centrifuge HRMP channel and open the Centrifuge to HydraDX HRMP channel
- Wait until the proposal on step 2 gets approved & enacted.
- HydraDX accepts the Centrifuge to HydraDX HRMP channel
- Wait for another session on Polkadot for the change to be effective.
These extrinsics need to be called with the parachain’s sovereign account as the origin. To achieve this, on the HydraDX side we will use polkadot-xcm pallet to send XCM message to the relay chain, by executing the following extrinsic from the parachain. Centrifuge should make an open request call and an accept request call with its pallet.
As a prerequisite, the parachain’s sovereign account must contain at least 20 DOT to be locked as collateral (10 for each channel direction), plus some DOT to pay for XCM execution fees.
Change or Improvement
Opening HRMP channels which allow cross-chain communication, as per Cross-Consensus Message Format (XCM) · Polkadot Wiki
Alignment to the Mission of the Centrifuge DAO
Cross-chain communication and cooperation is one of the core principles of Polkadot. Both sides, the Centrifuge DAO and HydraDX DAO, will benefit from moving this proposal forward. With growing liquidity and number of listed assets in the HydraDX Omnipool, everyone will be able to gain access to a decentralized, permissionless and frictionless way to trade (or accrue value of) CFG with high capital efficiency and low slippage.
Benefits for CFG holders
Users will be able to trade native CFG within the dotsama ecosystem, no need to use CEXs or bridge to Ethereum anymore.
Omnipool will allow:
- Trading CFG vs. any other asset in the Omnipool (currently HDX, DOT, DAI, wETH, wBTC + planned native USDT and USDC)
- Single-sided LPing
In short-term horizon:
- DCA (dollar-cost averaging)
- Dynamic fees
In mid-term horizon:
- Stableswap pools
- Order batching
Note: non-native dotsama assets are bridged to the Omnipool through Wormhole