# Q2

The HydraDX Protocol has finished executing upon the POL diversification strategy which was [mandated by the community of HDX holders for Q1 2023](https://hydradx.subsquare.io/democracy/referendum/18).

This thread has two components: an update on the current state of liquidity, and a proposal for the liquidity strategy for Q2 and beyond.

## Current State of Liquidity

At the start of Q1, the HydraDX Protocol had 22,473,297 DAI worth of POL.

- 2,200,020 DAI was bridged through Wormhole and LPed into the Omnipool;
- 2,200,000 DAI was swapped to ETH, bridged through Wormhole and LPed into the Omnipool;
- 1,100,000 DAI was swapped to WBTC, bridged through Wormhole and LPed into the Omnipool;
- 250,000 DAI was swapped to iBTC and LPed into the Omnipool;
- 2,200,000 DAI was swapped to USDT and LPed into the Omnipool.

Besides this, the following actions have been approved by the community but not yet executed:
- 2,200,000 DAI to be swapped to native USDC (whenever it becomes available);
- 5,000,000 DAI to be set aside for funding the development of the HydraDX Protocol ([ref. #35](https://hydradx.subsquare.io/democracy/referendum/35));
- 495,000 DAI to be paid to the whitehat and to Immunefi as part of the bug bounty program ([ref. #41](https://hydradx.subsquare.io/democracy/referendum/41)).

There are therefore **6,828,277 unallocated DAI** remaining to be utilized by the HydraDX Protocol.

----------------

## POL Proposal for Q2 and Beyond
To establish the POL strategy for Q2 2023 and beyond, we would like to spark a discussion which will be followed by the standard approval procedure of our protocol’s democracy. Using feedback from the community, we have compiled a list of suggested actions for the diversification and deployment of the remaining liquidity.

### Buy 1,000,000 DAI worth of HDX

- Bridge 1,000,000 DAI to Acala using Wormhole, transfer via XCM to the HydraDX Treasury account;
- Initiate DCA (Dollar Cost Average) orders to gradually swap a total of 1,000,000 DAI for HDX in the Omnipool;
- Future use of the accumulated HDX to be discussed.

### Buy 3,330,000 DAI worth of DOT (incl. LSDs)
- Bridge 3,330,000 DAI to Acala using Wormhole, transfer via XCM to the HydraDX Treasury account;
- Initiate DCA (Dollar Cost Average) orders to gradually swap a total of 3,330,000 DAI for DOT in the Omnipool;
- Accumulated DOT to be split between the following use cases:
    - At least 1M DAI equivalent deployed to Omnipool as LP;
    - At least 1M DAI equivalent swapped for DOT LSDs (options to be explored) and to be deployed to the Omnipool as LP;
    - The remainder to be reserved for the next HydraDX parachain slot. Once the slot is secured, a discussion can decide how to utilize any remaining DOT.

### Buy 500,000 DAI worth of iBTC

- Bridge 500,000 DAI to Acala using Wormhole, transfer via XCM to the HydraDX Treasury account;
- Initiate DCA (Dollar Cost Average) orders to gradually swap a total of 500,000 DAI for iBTC in the Omnipool;
- Deploy the accumulated iBTC into the Omnipool.

### Buy 2,000,000 DAI worth of ETH (incl. LSDs)
- Swap 2,000,000 DAI for ETH using an Ethereum-based DEX;
- Accumulated ETH to be split between the following use cases:
    - 1,000,000 DAI worth of ETH to remain in the HydraDX Council-controlled Gnosis multisig until Snowbridge is live;
    - 1,000,000 DAI worth of ETH to be swapped for ETH LSDs (options to be explored) and to be deployed to the Omnipool as LP.
----------------

This thread will be open for discussion to any community member for a reasonable period of time. After that, the proposal will be brought forward as a public referendum for the formal approval by all HDX holders.


#69 POL Diversification and Deployment (Q2+ 2023)