Hydration Extends Dominance Over Polkadot’s DeFi Ecosystem

Hydration, a Polkadot parachain and decentralized exchange, is solidifying its position as the top DeFi protocol within the Polkadot ecosystem.

On July 22, Hydration’s total value locked (TVL) tagged an all-time high of more than $56 million after more than tripling since the start of the year, according to DeFi Llama.

Although its TVL has since pulled back to $43 million, the majority of the decline is attributable to price losses suffered by Polkadot (DOT) and Bitcoin (BTC). Both assets and derivatives made up 38.5% of the exchange’s TVL on July 22 and account for half of its TVL decline since.

Data from DeFi Llama indicates Acala Liquid Staking is the second-largest protocol in the Polkadot ecosystem with $24.4 million, followed by the Moonwell lending protocol with $24.3 million.

Hydration is also extending its lead over rival Polkadot decentralized exchanges by trade volume. The DEX hosted $1.41 million worth of trades over the past 24 hours, and $5.37 million on Aug. 3 to host its second strongest day on record.

For comparison, Acala Swap hosted roughly $275,200 worth of trades over the past 24 hours, while ArthSwap processed $100,000 over the same period, according to CoinGecko.

Hydration rebranded from HydraDX in June following an announcement in February. The project also unveiled plans for a decentralized stablecoin, HOLLAR, and lending protocol at the time.

On July 29, Hydration proposed mobilizing 17.47 WBTC as collateral to back HOLLAR (roughly $1 million), alongside plans to swap $3.28 million worth of stablecoins into the yield-bearing sDAI and sUSDe stable tokens from MakerDAO and Ethena respectively.

Hydration reported protocol-owned liquidity worth $24.5 million at the same time.