Opportunistic Trader Wins HydraDX’s $ 50,000 Balancer LBP Contract

The decentralized exchange HydraDX, backed by Polkadot, raised approximately $ 22.86 million in the second public token sale offered through Balancer’s Liquidity Bootstrapping Pool, or LBP.

Yet, An opportunistic trader could stay one step ahead of the offer by taking advantage of the fact that Balancer’s LBP contracts are provided in a no-break status by default.

HydraDX is a substrate-based DEX that uses a single “omnipool” to drive automated market creation on the platform. LBP offered Ethereum-based xHDX tokens, which can then be redeemed for Hydra’s native HDX token.

Opportunistic Trader Wins HydraDX’s $ 50,000 Balancer LBP Contract
Opportunistic Trader Wins HydraDX’s $ 50,000 Balancer LBP Contract

LBP is supposed to provide a mechanism for crypto projects to get fair starts try to address the strategies that merchants use DEX Initial Offers (IDOs) to gain an advantage over other participants.

Despite the attempt to ensure a fair distribution of the tokens, One participant was still able to beat the offer and buy $ 50,000 HDX before the sale officially began.

HydraDX explained that on Twitter Balancer’s LBP contracts are shown as “no break” by default, which enables a savvy trader go on on the contract before it was held for a single block. The team stated:

“This incident is not really important. Perhaps the price paid was too high. At LBP, being first doesn’t necessarily mean getting the best price. On the contrary, since the price drops at the beginning, one would expect that the price would drop without extreme and constant buying pressure. “

Balancing LBPs use a combination of a free float price, a time limit, and constant selling pressure to structure an offer in such a way that the price of a token continuously decreases without demand.. The token sales model also allows issuers to open a pool by providing a relatively small portion of a pair, such as HydraDX’s xHDX token for the HDX / ETH pair.

Hydra’s LBP ran for three days with 87% of its pool sold to 5,274 wallets. On twitter, Hydra said the offer drew 25% more unique participants than those who contributed to the 2017 Polkadot ICO.

On February 11th, the HydraDX co-founder, Jakub Gregaus, tweeted that the xHDX / DAI pool was rated as the highest volume on Balancer.

However, Hydra’s suggestion that the price of its token would drop throughout the offering turned out to be false. HDX rose steadily from an early low of $ 0.034 to over $ 0.08.

HydraDX LBP price chart: HydraDX

HydraDX announced that all funds raised through the LBP will be used to determine liquidity for its protocol, indicating that the development of the project will continue to be funded by its investors.. 15% of the HDX offer was given to founders, employees, consultants and investors.

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