What is Project Hydro?
Project Hydro is a decentralized, open-sourced project curated by the Hydrogen Platform Corporation, located out of New York City. The various protocols and APIs that are being developed are 100% free to build on top of and integrate with your current platform. These various protocols that are being built by the team are Raindrop, Snowflake, Ice, Tide, Mist, and (recently added) Hail. With these protocols, there has been an ERC-20 (Ethereum based token) token that was created to be used across the entire ecosystem of Project Hydro and power the various dApps built by developers.
In this article, we’re going to dissect all the different ways the HYDRO token can be utilized within this incredible financial ecosystem made to increase security and transparency for everyone using these products around the world.
Raindrop was the first phase of the various products built by the core Hydrogen team, which is a MFA (multi-factor authentication) application. You might be familiar with MFA, or 2FA (Two-Factor Authentication), which is a tactic used by many websites and service providers to protect users from hackers who may have stolen passwords from a database. Raindrop brings an interesting perspective to 2FA where it’s blockchain based, and far more decentralized than its competitors like Google Authenticator or Authy. In addition, it also protects the end user from being phished because of how the authentication functions and reads the IDs on-chain.
If you’re reading this, why would you want to use Raindrop? Well, it’s completely free for both you and your end user, and makes your platform more secure, whether it’s client side or server side. Even better, it only takes about an hour to integrate! Feel free to check out this easy-to-use guide about how to get started with implementing the Raindrop API: https://medium.com/hydrogen-api/client-side-raindrop-an-implementation-guide-4e61c84e9dda
You can also check out how to link your Hydro ID with compatible websites. The Hydrogen team even made a video showing how simple this is to get started!
The Raindrop API doesn’t require the use of the Hydro tokens, but is an extremely important stepping stone for many of the other phases that the team is building.
The Snowflake API brings an extremely important angle to not only the blockchain world but the entire financial realm as the digital world has been growing at an exponential rate. Many organizations are trying to figure out how to onboard new clients and users into their database, and Snowflake brings a unique solution to this massive issue. It is a protocol built primarily for KYC (Know your customer)/AML (Anti-money laundering) purposes. The protocol has already been built, and is currently on the testnet, and soon to be live on the mainnet (this means it will soon be functioning on Ethereum’s blockchain).
Let’s look at some different ways that this technology could be used and, more specifically, how HYDRO is involved!
Basically anyone can build a KYC dApp on top of Snowflake, and you’re able to do a ton of different things with it. You’re able to require a certain amount of Hydro for payment to have an expedited KYC process, or have Hydro staked to have this completed. One of the ideas that I personally came up with was how exchanges who have a native token revolved around the exchange could build a dApp using Snowflake and bring more utility to their token! They’d have to require a payment/staking in Hydro as well as the exchange’s native token to have an expedited KYC process. For those who use some of the big exchanges, like Binance, imagine the benefits this could bring to the utility of BNB! It would be huge! This could be accomplished using Snowflake.
Developers would also be able to build dApps and tie in a users credit score using third-party APIs. This could be a huge benefit for platforms who specialize in lending. It can not only help build the reputation of users who are good-actors within the system, but also punish those who try to break the rules- hurting their credit score and reputation.
All of these dApps that are created are going to be easily accessed on the Hydro Mobile App, where a dApp store is going to be released.
It’s also important to note that whenever these outside organizations require Hydro for these, the tokens can be acquired by purchasing them through various exchanges. When large enterprises have to stake these tokens, they are “burned”. Not to confuse them with the actual burning of a token, this just means that they are taken out of supply by being kept in the repository.
Ice brings a unique solution to the financial world where you’ll be able to stamp documents on-chain as well as document signing. This is similar to platforms you may have already heard of like DocuSign or Adobe Sign. The big issue with these is you have no clue who is stamping them- there’s no identity behind the signature (Funny how this is brought up after Snowflake, which focuses on KYC and digital identities :))! The unique part about Ice is it will actually be interoperable with other blockchains as well to help with document stamping for decentralized cloud storage. Some examples of this are Sia, Storj, MaidSafe, and IPFS (InterPlanetary File System).
The Hydro token is used for all the on-chain stamps. In addition to this, dApps are able to be built using Ice for different financial services, such a staking Hydro for notaries. If you don’t know what a notary is, it’s an authorized individual who writes up certain contracts or deeds. So why would Ice be beneficial for this? These documents can be stamped on-chain for security, and can have Hydro to be staked as a form of payment for these services- creating good actors within the ecosystem.
Tide brings a very interesting aspect to the financial world. The developers behind the protocol are enabling basically any type of payment dApp. This obviously means that Hydro would be used throughout this entire ecosystem being the main payment method. One of the interesting aspects that has been brought to light is the ability for recurring payments. Many digital currencies like Bitcoin and Ethereum, among others, are impossible to have recurring payment structures due to the usage of a smart contract.
While Hydro is still being used through smart contracts, the protocols built for Tide and Ice will allow for these types of payments! This is a huge deal. This allows for subscriptions to be easily paid for. For example, you will be able to pay for subscriptions like Netflix, Hulu, or other monthly, yearly, types of subscriptions using Hydro.
With the ability to tie in Snowflake into Tide, this brings about an incredible solution. Individuals will now be able to pay credit card bills, or even payroll for companies. By tying in your digital identity, these payments can be done easily and efficiently. All these different types of opportunities can be done through different dApps built using Tide. By building a wallet within the Hydro App, this will also enable for POS (point of sale) transactions but just the push of a button!
Raindrop Whitepaper https://github.com/hydrogen-dev/hydro-docs/blob/master/Raindrop/Raindrop.md
Implementation Guide: https://medium.com/hydrogen-api/client-side-raindrop-an-implementation-guide-4e61c84e9dda
Hydrogen Documentation: https://www.hydrogenplatform.com/docs/hydro/v1/
Snowflake Whitepaper: https://github.com/hydrogen-dev/hydro-docs/blob/master/Snowflake/Snowflake_DRAFT.md
Ice Whitepaper (draft): https://github.com/hydrogen-dev/hydro-docs/blob/master/Ice/Ice_DRAFT.md
The Tide, Mist, and Hail whitepapers are still yet to be drafted, but information about them can be found on the Hydrogen Documentation link (excluding Hail- hasn’t gotten updated with that yet) or on this Medium post: https://medium.com/hydrogen-api/project-hydro-features-in-depth-look-39faa29f0d61
Brief explanation of Hail: https://github.com/HydroCommunity/Community-Brainstorming/issues/7