Dazhbog - Perpetual Futures Exchange

[DanijelCBS]

Project Abstract

Dazhbog is a decentralized perpetual futures exchange platform on the Hydration
parachain within the Polkadot ecosystem. The platform allows users to trade perpetual
futures contracts in a decentralized manner, leveraging the security, scalability, and
interoperability of the Polkadot network.

Grant level

• Level 1: Up to $10,000, 2 approvals
• Level 2: Up to $30,000, 3 approvals
• Level 3: Unlimited, 5 approvals (for >$100k: Web3 Foundation Council approval)

Application Checklist

• The application template has been copied and aptly renamed (project_name.md).
• I have read the application guidelines.
• Payment details have been provided (Polkadot AssetHub (DOT, USDC & USDT) address in the application and bank details via email, if applicable).
• I understand that 30% of each milestone will be paid in vested DOT, to the Polkadot address listed in the application.
• I am aware that, in order to receive a grant, I (and the entity I represent) have to successfully complete a KYC/KYB check.
• The software delivered for this grant will be released under an open-source license specified in the application.
• The initial PR contains only one commit (squash and force-push if needed).
• The grant will only be announced once the first milestone has been accepted (see the announcement guidelines).
• I prefer the discussion of this application to take place in a private Element/Matrix channel. My username is: @_______:matrix.org (change the homeserver if you use a different one)

[github-actions]

CLA Assistant Lite bot All contributors have signed the CLA ✍️ ✅

[DanijelCBS]

I have read and hereby sign the Contributor License Agreement.

[DanijelCBS]

recheck

[semuelle]

Hi @DanijelCBS. Thank you for the application. The project looks interesting, but the Grants Program usually tries to remain neutral and avoid any projects that largely benefit one parachain. Have you looked into funding through the Hydration or Polkadot treasuries?

[DanijelCBS]

Hi @DanijelCBS. Thank you for the application. The project looks interesting, but the Grants Program usually tries to remain neutral and avoid any projects that largely benefit one parachain. Have you looked into funding through the Hydration or Polkadot treasuries?

Dear Sebastian,

Thank you for your feedback.

We have chosen Hydra due to its high liquidity and the extensive potential test group it offers within the Polkadot ecosystem. As outlined in our development plans, we aim to integrate Dazhbog into other parachains that also exhibit high liquidity, ensuring an optimal user experience. There is no necessity to integrate into parachains with low liquidity for this reason.

On the other hand, Hydra presents a good playground to validate the PoC and iterate on the product vision with a DeFi-oriented user base. This presents a good opportunity to establish a long-term product roadmap before expanding to integrate with all other parachains, including Asset Hub as a system.

Dazhbog aims to bring DeFi users and liquidity from outside the Polkadot ecosystem into Polkadot. Hydra currently has all the necessary components, in our view, to provide a seamless experience for a new wave of users and liquidity for the Polkadot ecosystem.

We also intend to build a comprehensive governance platform. Notably, Dazhbog's native token will be $DOT, which will serve multiple purposes: rewarding liquidity providers and facilitating voting on the governance platform. This strategy will enhance the utility of $DOT for its holders. Since we do not plan to launch a native Dazhbog token, leveraging the widely available Polkadot token across all parachains is a logical choice.

We hope this addresses your question. Should you have any further questions, please feel free to reach out. We are at your disposal.

Best regards,
Danijel

[semuelle]

Thanks for the clarifications, @DanijelCBS. I'm still confused about some things, though. For example, you say you want to integrate pallets into Hydration, but then call it a playground. Has the community agreed to this? Is there a referendum or discussion I can follow? Also, you say Dazhbog uses DOT as its native token. What does 'native token' mean in this context, if you're on Hydration and not deploying your own parachain?

[DanijelCBS]

Thanks for the clarifications, @DanijelCBS. I'm still confused about some things, though. For example, you say you want to integrate pallets into Hydration, but then call it a playground. Has the community agreed to this? Is there a referendum or discussion I can follow? Also, you say Dazhbog uses DOT as its native token. What does 'native token' mean in this context, if you're on Hydration and not deploying your own parachain?

Dear Sebastian,

Dazhbog will be a decentralized perpetual futures platform that we plan to integrate on all parachains with high liquidity. By "playground," we meant that the Dazhbog Proof of Concept will be implemented on Hydration to validate the idea because it is the most suitable parachain at the moment (due to its DEX, liquidity, volume, etc.). We wrote about the idea on the Hydra Discord, where some community members provided feedback. You can check the hydra-builders channel on their Discord (https://discord.com/channels/744493635764224071/935905007855861830/1254816385259933838). We plan to get in touch with the core Hydration team members to align on the actual code implementation.

Please note that when we initially discussed this on their Discord, we talked about a decentralized futures program. However, we decided to pivot and take a smaller step by applying for this level 2 grant, so you don't get confused.

"Native token" means that the Dazhbog platform will not have its own native token like other platforms. On each parachain, the network fee will be paid in their native token, but voting on the Dazhbog governance platform and rewards for liquidity providers will be paid exclusively in $DOT.

Example 1:

On the Dazhbog governance platform, there is a proposal to add a new token. Anyone who wants to vote can do so by putting their $DOT into the "yes" pool or the "no" pool. The network fee will be paid with the token used for network fees (as usual).

Example 2:

Bob provides liquidity for the WBTC/USDT pair on the Dazhbog platform. His reward will be paid in $DOT tokens, and the network fee will be paid in the native coin of that network (as usual).

I hope this clarifies better.

Best regards,

Danijel

[semuelle]

Thanks for the clarifications, @DanijelCBS. To be honest, I think we would prefer some kind of confirmation/commitment from the Hydration team that they are interested in integrating Dazhbog. I suggest to open an issue or discussion on their Github or on hydradx.polkassembly.io.

Also, I'm still unclear about how the project would look like after integrating with multiple parachains. If I understand correctly, you would have to deploy your pallets on each of these chains. Do they then interact with each other? There is no mention of any cross-chain functionality in your proposal. What about AssetHub? I don't think AssetHub is generally open for such a dramatic change.

[DanijelCBS]

Thanks for the clarifications, @DanijelCBS. To be honest, I think we would prefer some kind of confirmation/commitment from the Hydration team that they are interested in integrating Dazhbog. I suggest to open an issue or discussion on their Github or on hydradx.polkassembly.io.

Also, I'm still unclear about how the project would look like after integrating with multiple parachains. If I understand correctly, you would have to deploy your pallets on each of these chains. Do they then interact with each other? There is no mention of any cross-chain functionality in your proposal. What about AssetHub? I don't think AssetHub is generally open for such a dramatic change.

Dear Sebastian,

I apologize for the delayed response. We agree with you and, as a result, traveled to Polkadot Decoded to meet with the Hydration team to get their confirmation. We spoke with their CEO and CTO, and they were positive about the idea. We will make calls next week to discuss this topic in more detail once everything settles down. I will ensure they provide official confirmation on this post, assuming everything is agreed upon with the Hydration team.

Additionally, we had a meeting with your colleague from W3F, Piet Wolff, where we discussed our proposal and potential ways it could progress. He mentioned that we are also a very good fit for the Decentralized Futures program. We agreed that he will take a deeper look at our proposal, and we are very grateful for the feedback we received from him.

We as well discussed Dazhbog with several influential members of the Polkadot ecosystem, and they expressed strong interest and enthusiasm for the platform, noting that it would be a valuable addition to the ecosystem.

Regarding cross-chain, the initial idea is to deploy pallets later on other parachains where a sufficiently developed DEX exists. In the meantime, we will conduct research to see if there is a better solution using XCM or another method for cross-chain interoperability to avoid deploying same pallets on multiple parachains.

Best regards,

Danijel

[PieWol]

Hey @DanijelCBS ,

I'm glad we talked. As DF is out of the equation as the applications are closed I would like you to try and apply to the Hydration treasury. It would be perfect if you could come up with a way to build this project as a win-win situation for you as a team and the hydration network. As discussed I don't think you need any more validation for the project in order to start creating a proposal for the hydration treasury.

Best of luck and kind regards,
Piet

[takahser]

@DanijelCBS thanks for your interest in the W3F Grants Program. I, too, believe that the close alignment of your deliverables with Hydration makes this project more suitable for funding through the Hydration treasury. Their community will likely be more capable of deciding how valuable this project is to their ecosystem than us. The fact that they've been awarded close to 10M DOT through a recent OpenGov proposal strengthens this case. I'm therefore going to close this application.

Nevertheless, we hope you're going to succeed to find funding in the Hydration ecosystem and wish you only the best for the future of your project.