Gamma Strategies as One Option to Distribute HOP Liquidity Incentives on Uniswap v3

Hey Hop Community,

I’m super excited for this airdrop. I’ve been a Hop OG in the discord community for quite some time and was lucky enough to get an airdrop (and more as result of great work done by the sybil hunters)!

Mainly, I’m here to propose Gamma Strategies as one of many options, which should receive HOP liquidity incentives for distribution. Specifically, we would like to be allocated just 20% of the total HOP tokens allocated for HOP-ETH liquidity incentives.


Gamma Strategies is an active liquidity manager on Uniswap v3. It is active currently on Mainnet, Optimism, and Polygon, with plans to launch on Arbitrum, Gnosis Chain, Moonbeam, and Celo very soon. Within the last 2-3 months, we have been vigorously audited by Arbitrary Execution and blue-chip auditing firm, ConsenSys Diligence. We have also been managing liquidity and utilizing a multitude of strategies, from automated fixed range strategies to machine learning-derived strategies, on over 70 liquidity pairs since Uniswap v3’s launch in March 2021.

I read @ben_xtoken’s proposal here: HOP Liquidity Incentives on Uniswap V3 and @david-mihal 's suggestion here (HOP Liquidity Incentives on Uniswap V3 - #3 by david-mihal), and I really like both solutions, especially @david-mihal’s solution because it’s a decentralized approach to getting liquidity. It is also important to note that the new and improved Univ3 Staker contract by @david-mihal will implement a minimum tick distance to prevent the Ribbon incident, where whales took most of the liquidity rewards.

I think Gamma Strategies being another one of the options to deploy HOP incentives will further aid in the decentralization of Hop’s liquidity and cater to a more diverse array of liquidity providers. Because we split the costs of rebalancing across all our LPs, we attract people who can’t afford to rebalance positions on Mainnet, the costs of which can range from $80-$500 per rebalance. We also attract passive liquidity providers who don’t have the time nor desire to manage their own ranges.

Gamma’s Liquidity Providing Strategy

For the first 4-6 weeks, utilize a full range liquidity position

The first few weeks of an airdrop are extremely volatile. In the case of DYDX, ENS, PSP, and LOOKS, you can have massive pumps followed by massive dumps. Concentrating too much in this environment can incur significant losses due to impermanent loss as you rebalance to stay in range. For that reason, in the first 4-6 weeks, we will implement a full range liquidity position.

After 4-6 weeks, utilize +/- 60-70% ranges until the 90-day mark

After the initial volatility from the airdrop dies down following the initial price discovery process, we aim to narrow the ranges to obtain higher capital efficiency and lower price impact on trades, while at the same time increasing the fee income to our LPs.

The reason that we utilize this strategy for 90 days is so that we have enough observable data to train our statistical algorithm.

After the 90-day mark, utilize the Autoregressive Strategy

Once we receive 90 days of trading data, we can run our Autoregressive Strategy, which utilizes statistical modeling and machine learning to forecast optimal liquidity bands on Uniswap v3. Essentially this strategy aims to mitigate impermanent loss, while opportunistically maximizing for high fee returns. During periods of high volatility, the ranges will widen, which will mitigate impermanent loss as it will preserve the better performing asset by slowing the speed at which it is sold off for the underperforming asset. During periods of low volatility, the ranges will narrow which increases the fee returns on the liquidity.


  • Networks: Mainnet, given that the Hop governance process will take place on Mainnet; however, we can accommodate for every network that has Uniswap, which is currently on Polygon, Optimism, and Arbitrum, but will eventually be on Celo, Moonbeam, and Gnosis Chain as well.

  • Pair for Management: HOP/WETH

  • Incentives: We believe 5M tokens should be sufficient to incentivize liquidity. We would like to manage 20% (or 1M) of the total HOP tokens allocated by the Hop DAO for HOP/WETH liquidity and distribute those rewards over a period of 90 days

  • How it works: Users deposit the base assets of HOP and WETH into our frontend and receive ERC-20 LP tokens that represent a stake in our managed Uni v3 position. That ERC-20 LP token is 100% compatible with the current StakingRewards contracts that Hop is using for its current staking pools on Gnosis Chain and Polygon. Our position manager contract called the Hypervisor then deploys the deposited assets to Uniswap v3 where they will be managed according to our strategies.

  • Costs: There are no upfront fees, but 10% of the LP trading fees returned from the position are collected and distributed to GAMMA stakers. The remaining 90% of the trading fees will be compounded back into the position. The costs to rebalance the position will be split amongst all LPs from the trading fees earned, significantly reducing the costs to rebalance

Advantages to Using Gamma

  1. An ERC-20 wrapper for our Uni v3 position is created which is 100% compatible with Hop’s current StakingRewards contracts

  2. We manage the positions according to our strategies, and there is no need to worry about rebalancing the positions when they go out of range

  3. The costs to rebalance are significantly reduced

  4. Our main goal is to sustain and grow liquidity through the merit of our strategies even after the conclusion of the Hop liquidity incentive program


We strongly believe that the liquidity providers should be decentralized for a community-owned and operated DAO like Hop. For that reason, we are not aiming to be the single source of liquidity for the HOP token, but one of many recipients, which includes those using @david-mihal 's new and improved Uni v3 staker contract.

We are aligned with this goal by appealing to lower capitalized liquidity providers and passive LPs who want access to our liquidity providing strategies.

Additionally, we strongly believe in sustainability and utilizing our strategies to sustain liquidity within our pools. Our main goal is that even after the initial liquidity incentive program is over, we continue to retain and grow liquidity for the HOP token.


Appreciate the community spirit of this post, though would like to note that xToken’s solution is entirely non-custodial as well

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Thank you! We are actually non-custodial as well in that our Hypervisor contract does not allow for withdrawals of the funds to any address that does not have the LP tokens. The functions that it will mainly perform is rebalancing the liquidity ranges, deploying deposited assets to the Uniswap pool, and withdrawing liquidity to LP tokenholders who are redeeming their LP tokens. In the worst case, there can be subpar management of the liquidity ranges, but users are free to withdraw or deposit more liquidity at any time.

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