Hedge is excited to share what we’ve been working on and will be shipping soon.
HDG Staking changes
Hedge conducts most of its liquidity mining using HDG and thus a better price helps build more liquidity, which is crucial to the success of the protocol. We looked at various staking models and wanted something straightforward with more evidence of helping sustain price.
While there are more novel staking methods, the one with the most evidence of helping improve an underlying token price was token buyback staking which is why Hedge is moving to a token buyback staking model.
From a user’s perspective, HDG will continue to be able to be staked but instead of receiving a proportional revshare, users will be able to compound HDG tokens. Every week, at a random date to avoid front-running, a buyback of HDG using all the week’s profits will be done and distributed to all stakers.
Rewards will be auto-compounding so you won’t need to continuously claim rewards which simplifies the process a lot.
We’ll be aiming to having this change live the week of November 14th though will confirm on our usual communication channels at least 1 week before.
We’ve been paying a lot of attention to recent events around price manipulation and have considered various options to avoid Hedge being exposed to bad debt while at the same time avoiding excessive liquidations.
For volatile collateral, we mostly focus on listing highly liquid assets where price manipulation is harder and thus using spot price is usually acceptable. Though as we onboard more assets, we’ll be focusing on using more oracles using either short window TWAP prices, bounding logic or some VWAP logic based on what is best for the collateral to avoid malicious manipulation. There are compromises to each approach so stay tuned for details— for e.g. TWAP can cause late liquidations so may not be ideal if we plan to offer low collateral ratios.
As always we’ll aim to rely on as many oracles as possible to price any listed asset.
LUT or Transaction V2 has been implemented on Hedge and will be made live once most wallets support this new standard.
This is important as it will greatly improve user experience interacting with Hedge as users will no longer need to sign multiple times for basic interactions, such as the stability pool or when opening a loan.