HOLLAR, issued by the Hydration Protocol smart contracts under the governance of staked HDX tokenholders, is an over-collateralized stablecoin that targets a value of approximately one U.S. dollar (USD) and is stabilized by the onchain HOLLAR Stability Module [S1][S2][S3].

Each HOLLAR references the U.S. dollar (USD) at an approximate 1:1 target and represents a claim against crypto collateral held within the protocol [S2]. Holders do not receive yield; HOLLAR is price-stable and non-rebasing by default [S2]. Minters deposit collateral including DOT, ETH, vDOT, USDT, USDC, tBTC, or WBTC and bear a variable borrow interest cost documented at 5.12% per year, which adjusts dynamically with supply and demand [S2][S4].

HOLLAR is issued natively by the Hydration protocol and is not issued by a single corporate entity; protocol parameters are set through onchain governance by staked HDX tokenholders in the Hydration DAO [S1][S2][S3]. The holder's claim is a debt instrument against over-collateralized crypto reserves, with minting capped by a loan-to-value ratio (a documented example mints up to 750 USD against 1,000 USD of ETH at 75% LTV) [S2]. Minting and holding are permissionless and open to protocol users [S1][S2]. Positions unwind by repaying HOLLAR plus accrued interest to release collateral, and the Stability Module supports the peg via stablecoin conversion near 1 USD and smart buybacks [S2].

HOLLAR is a native asset on the Hydration appchain, an application-specific Layer-1 blockchain built on Polkadot [S5][S2]. Minting occurs when users supply collateral through the borrowing markets up to the asset's LTV limit; settlement is onchain at block cadence, with partial liquidations and Stability Module stableswap-pool monitoring running each block [S2][S4].

<Sources
  retrievedAt="2026-06-22"
  items={[
    { id: "S1", url: "https://hydration.net/" },
    { id: "S2", url: "https://docs.hydration.net/quick_start/hollar/" },
    { id: "S3", url: "https://docs.hydration.net/quick_start/hdx_token/" },
    { id: "S4", url: "https://docs.hydration.net/products/borrowing/overview/" },
    { id: "S5", url: "https://docs.hydration.net/quick_start/hydration/" },
  ]}
/>


# HOLLAR Fees Methodology

## 1. Overview

Fees measures the total economic value paid by users to interact with HOLLAR, the stablecoin product within the Hydration ecosystem. This metric includes interest accrued on outstanding debt and fees generated through the HOLLAR stability module. These components represent the cost of maintaining stablecoin liquidity and the interest paid by borrowers to the protocol.

## 2. Data sources

- **Blockchain events**: `Mint` and `Burn` events from `VToken` contracts, `ReserveDataUpdated` events from `LendingPool` contracts, and ERC-20 token transfers, covering Hydration Substrate and Hydration EVM
- **External data**: End-of-day price feeds for underlying assets

## 3. Step-by-step calculation

### Component A: HOLLAR interest accrual tracking

- **Purpose**: Calculates the interest accrued on the outstanding HOLLAR debt balance.
- **Logic**: `Mint` and `Burn` events from `VToken` contracts are parsed to track changes in the debt supply. A running cumulative balance of total HOLLAR debt is maintained. `ReserveDataUpdated` events from `LendingPool` contracts are used to extract the `variableBorrowIndex`. Daily interest is calculated by determining the percentage change in the borrow index between updates and applying that rate to the cumulative debt balance.
- **Key fields**: `in_value`, `in_balanceIncrease`, and `in_variableBorrowIndex`.

### Component B: HOLLAR stability module fee collection

- **Purpose**: Captures fees generated by the stability module during asset conversions.
- **Logic**: ERC-20 token transfers to and from the HOLLAR stability module address are identified. Net inflows to the module represent the total fees generated. For these flows, 80% of the value is allocated to protocol revenue, while 20% is designated as supply-side fees.
- **Key fields**: `to_address`, `from_address`, and `value`.

### Component C: USD normalization and aggregation

- **Purpose**: Normalizes all fee components to a common currency for reporting.
- **Logic**: Raw fee amounts are normalized by asset-specific decimal precision. The resulting quantities are multiplied by end-of-day price feeds to determine the USD value. Total fees are aggregated daily across all components, using UTC day boundaries for final calculation.

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total value users pay to use a protocol (gross fees, user-paid fees).

Fees

Stablecoins

Collators aggregate parachain transactions block candidates and producing state transition proofs for validators based on those blocks.

Hydration is a Polkadot parachain specialized in trading, lending, and stablecoin issuance.

HDX holders own and govern the protocol. Hydration’s investors include KR1 plc, Hypersphere, etc.

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Blockchains (L2)

Hydration

Hydrated Dollar (HOLLAR) is a U.S. dollar stablecoin issued by Hydration.

Each token tracks one U.S. dollar and is a collateral-backed contractual exposure rather than a direct claim on the issuer.

Retail investors, professional investors, accredited investors, qualified investors, qualified purchasers, and institutions can mint and redeem directly with Hydration.

HOLLAR has been issued on Hydration EVM since September 2025.

Hydrated DollarHOLLAR