Liquid Reserve

USDC-backed stability.

At the foundation of Hydrex’s token model is a hard liquidity guarantee: every HYDX in circulation is backed by at least 1 USDC (which is likely to grow over time). This reserve mechanism is core to the protocol’s economic integrity, ensuring that token emissions are always supported by real value rather than unchecked inflation.

New HYDX does not enter the market directly. Instead, users earn oHYDX, an options token that represents the right to mint HYDX. To convert oHYDX into liquid HYDX, users must deposit 1 USDC per token. This creates a capital-backed issuance model that limits supply, reinforces price stability, and generates protocol-owned liquidity with every redemption.

During times of high demand, Hydrex can dynamically increase the cost to redeem oHYDX, capturing premium value while still maintaining a strict reserve ratio. At all times, circulating HYDX is collateralized and auditable, giving users confidence in the system’s solvency and sustainability.

This model strengthens the overall flywheel. Emissions drive engagement, but they are gated by real liquidity. The reserve acts as a stabilizing force, ensuring that growth is tied to actual capital inflow and that HYDX remains a reliable asset across market cycles.