MEXC Global Research: Avalanche Protocol Ecosystem Cross-Chain DEX Hurricane Swap (HCT) Market Analysis

 HurricaneSwap is an Avalanche-based DEX that uses LP for multi-asset trading across chains. It features the unique Roke protocol, HurricaneStation and Hurricane Alliance, providing users with a more efficient and stable liquidity solution by supporting transactions on dozens of heterogeneous blockchains, such as Bitcoin, Ethereum, BSC, and HECO.



LP Cross-chain

HurricaneSwap’s LP cross-chain is a cross-chain mechanism that takes the liquidity of the original chain through collateral minting and generates cross-chain liquidity of the target asset directly on this chain.


E.g:

Users can create liquidity of CAKE and USDT on BSC, by first collateralizing them through HurricaneStation and then crossing to Avalanche via Roke Protocol to mint as a liquidity pair aLP of aCAKE and aUSDT. Users can then trade aCAKE on Avalanche.

At this time, if the price of CAKE on the BSC chain fluctuates, the nodes in the HurricaneAlliance will carry out arbitrage between the cross-chain aToken and the native Token to even out the price difference. At this point, the price of aCAKE in the possession of users and the price of CAKE on BSC will converge.

Since the LP on the native chain is directly minted cross-chain, Avalanche users can freely trade tokens on other chains on HurricaneSwap. As it is collateralized to become aLP after crossing the chain, only HurricaneAlliance has the authority to cross the chain with a single token. Consequently, if hackers increase a cross-chain asset through an attack, they will not be able to cash out and escape.


HurricaneAlliance

Crossing chains of assets, liquidity changes and other factors will lead to price differences between Swap trading pairs. This price difference will be eliminated by the validator alliance to provide the best possible trading experience for users, from which the validator alliance can also earn arbitrage income. The validator alliance will also review the liquidity cross-chain for compliance to avoid malicious behavior such as fake recharge attacks on cross-chain assets.

One is required to stake HCT if they wish to take part in the validator alliance. Validator alliance nodes can enjoy HCT rewards and gains from price arbitrage. 10% of the total HCT supply (200 million HCT tokens) will be used to incentivize the validator alliance. This portion of HCT will be released linearly after the official launch of HurricaneSwap, with 300,000 HCT released every day until the completion of its release.

Roke Protocol (LP-Bridge): The underlying protocol of the LP cross-chain bridge that can complete the exchange between LPs collateralized on the original chain and the aToken minted on this chain.

HurricaneStation: Sites that complete native LP collateralization on each target chain.

HurricaneAlliance: A validator alliance that can collateralize LP and eliminate the price difference between the native chain and this chain through exchanges with aToken.


Financing Status

On June 11, HurricaneSwap received a seed round of funding of over a million USD from AVATAR Fund, an industry fund established by the Avalanche Agreement, and LD Capital.


Economic Model

The total number of HCT issued is 2 billion tokens, distributed as follows:

Liquidity mining: 60%, 1.2 billion tokens, with 1 million tokens released daily after the official launch

Market and ecological incentives: 4%, 80 million tokens, no lock-up period, used for market branding

Verifier Alliance: 10%, 200 million tokens, 300,000 coins to be released daily after the launch of Roke Protocol

Team Fund: 10%, 200 million tokens, lock-up period of 6 months after launch followed by 12 months of linear release

First round of private placement: 11%, 160 million tokens, lock-up period of 3 months followed by 12 months of linear release

Second round of private placement: 4%, 80 million tokens, lock-up period of 1 month followed by 12 months of linear release

Public offering: 1%, 20 million pieces, no lock-up period, estimated valuation of 60 million USDT



Practical value analysis

Practical value:

  1. Transaction fee

  2. Liquidity mining

  3. Participation in Validator Alliance/nodes to earn incentives

  4. Participation in future community governance


Risks:

  1. Partial unlock and cash out by fundraisers

  2. Team unlock and cash out

  3. Liquidity mining partial cash out



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