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Hodlcoin: A High-Risk, High-Reward Game#

Hodlcoin, a high-risk, high-reward game, was originally a concept conceived by one of the designers of Djed (SigmaUSD). The game encourages players to "HODL" their ERGs. The rules are straightforward: players can deposit their ERGs into a common reserve (HODLing) or withdraw ERGs from the reserve by burning their HODL ERGs (un-HODLing). While there are no fees for HODLing, un-HODLing incurs a penalty fee (e.g., 3% or 10%) that is added to the common reserve. This structure creates an incentive for players to hold their ERGs for longer periods, as they benefit from the fees paid by those who un-HODL.

Front-end interfaces available at Hodlcoin and PhoenixFi.


The idea for Hodlcoin dates back to 2020 when the goal was to simplify the design of Djed/SigmaUSD and create a stablecoin protocol that wouldn't require a reserve coin or an oracle. Although initially dismissed as a wild idea (especially if the goal was to create a stablecoin, given that the price of hodlERG only increases), the concept was revisited in 2022 and shared with @kushti_ru. By Spring of 2023, it was agreed that Hodlcoin could be an intriguing DegenFi product. The collaboration with @pulsarzz began shortly after, and the rapid progression of the project is a testament to Ergo's capacity for innovation.

Security Incident#

Regrettably, a vulnerability was introduced during the development process that allowed the bank box to be drained. Krasavice Blasen, the developer behind Duckpools and SkyHarbor, identified this error and swiftly drained the funds to prevent a malicious actor from doing so. A more detailed technical description of the flaw can be found in this Reddit post. The funds are currently being returned to the users.

Revamp and Relaunch#

In response to this, a second version of Hodlcoin has been developed and launched by PhoenixErgo. This new version is being worked on by community developers MGpai and lgd, who are revising the contract and using a proxy contract to enhance security. The relaunched Hodlcoin now operates with two frontends using the same bank, one is available at Hodlcoin, and the other at PhoenixFi.

Risk Management#

It's important to reiterate the significance of knowing your assumptions when participating in experimental decentralized finance. There are no guarantees, and the reliability of a protocol is best measured over time. Always manage your risks and trade wisely.