[Temperature Check] HIP0: Hop Mission Statement & Success Framework Summary: This proposal establishes a mission statement for Hop governance that emphasizes security, trustlessness, and community ownership, as well as a focus on market share of monthly volume as the primary indicator of protocol success.
Recommendation: Vote Yes. This is the first small step on a long journey for Hop governance. HIP0 will likely be amended or build upon over time, but it provides a needed push into a specific direction. We are very excited to be here at the beginning of Hop’s journey, and feel lucky to have the opportunity to contribute.
Recommendation: Vote Yes. While it’s unlikely HOP will have bridging needs for a while, no liquidity is needed to be sourced as it is Hop’s native token. We do caution, however, that it not be prioritized ahead of other technical work that could be accretive to the protocol. Additionally, the ability for the protocol to mint/burn HOP on any of the chains Hop supports presents additional security challenges, and should only be deployed when the highest level of confidence has been achieved.
Recommendation: Vote Yes. Further sales of HOP are likely needed for the protocol to secure stable funding over the medium to long term. Note that this requires no budget and will not formally engage any legal representation. We would support pre-authorizing the Hop Foundation to perform this kind of activity without a vote in the future.
General Notes: These represent an important milestone in the nascent Hop governance. It will be important, however, for future proposals to include as many relevant details as possible so that every proposal is as clear as an “ELI5.” We would also encourage a pre-determined RFC period for proposals before they move on-chain, even if they are simple temperature checks. This will allow time for discussion and a chance for authors to reject or incorporate feedback into their proposals.
Recommendation: Vote Yes. This program is aimed at increasing governance participation by any stakeholder in the Hop ecosystem. GFX Labs authored this proposal.
1 Poll Ending September 10, 2022
Proposal: Fast Bridging Support For SNX And sUSD Summary: This poll is to conduct a temperature check of adding fast bridging support for SNX and sUSD between Ethereum and Optimism. Initial liquidity would be seeded by Synthetix, with the expectation of Hop incentivizing the pairs with OP and possibly HOP.
Recommendation: Vote Yes. Synthetix is one of – if not the – most important protocols on Optimism. Becoming the bridge of choice for Synthetix assets to move between Optimism and Ethereum would further position Hop strategically as a major bridging provider between the two. Synthetix’s willingness to seed bonders on L1 also lowers the cost.
1 Poll Ending September 11, 2022
[Temperature Check] HIP 4: Delegate Incentivization Trial Summary: This poll is to conduct a temperature check of a trial delegate incentives program. The program would compensate delegates with HOP tokens for time and effort involved in governance. This program is designed to sunset after 6 months in order to force Hop governance to evaluate its effectiveness and the parameters selected.
Recommendation: Vote Yes. GFX Labs co-authored this proposal with @francom and @fig.
Recommendation: Vote Yes. Hop’s position as an early and systemically important piece of infrastructure on Arbitrum One should be repeated with Arbitrum Nova. From a risk-reward standpoint, it is better to be early and established on different chains than to wait to see traction and then attempt to enter a busy market. Given Arbitrum Nova represents an attempt to segment the user base of L2s, this differentiation will also provide Hop (and others) with important information about the various branches of industry, how to serve them, and how to create value to tokenholders from that service.
[Temperature Check] HIP 7 - AMM and Bonder Liquidity Incentives Summary: This proposal would provide 2,000,000 HOP for LP incentives and 800,000 HOP for bonder incentives, both on a monthly basis. LP incentives are across four assets: ETH, USDC, USDT, DAI.
Recommendation: Vote Yes. Emissions to secure capital pools for LPs and bonding are appropriate. GFX does believe, however, that in the future there could be a better structure than incentives denominated in a fixed amount of HOP. An arrangement such as guaranteeing a floor for returns would have the benefit of only spending HOP when returns on LPing/bonding were low, as well as providing stability and predictability to those participants in the case of a price collapse in HOP.
Recommendation: Vote Yes. GFX Labs supported all eight of these proposals at earlier stages, and authored two of them.
1 Poll Ending October 26, 2022 HIP 8: Direct Velodrome veNFT votes to a WETH/HOP pool Summary: This proposal would authorize the Hop Community Multisig to alter its prioritization of pools on Velodrome (on Optimism). Because this is merely a social consensus, this vote is only intended to go as far as Snapshot.
Recommendation: Vote Yes. Now that HOP is available on Optimism, this seems acceptable. It also makes sense to allow the multisig leeway in how best to manage Hop interests with regard to Velodrome pools.
Recommendation: Vote Yes. An easy way to provide small grants without extended governance timelines or using up too much bandwidth is necessary for the Hop ecosystem.
Disclosure: GFX Labs would serve as one of the 5 members of this committee
Recommendation: Vote Yes. This has been requested by the zkSync team, and technical requirements already scoped/communicated with Hop Labs. This expands Hop to another rollup, and fast transport between it and other supported chains extends the network effects and usefulness of Hop.
[Temperature Check] HIP 12: How Should Hop Compensate Multi-sig Signers Summary: This proposal would disburse $2000 of HOP to @dybsy and $1000 of HOP to the other four signers of the community multi-sig as retroactive compensation for time and effort. It also includes provision for a monthly disbursement of $500 of HOP to a lead member of the multi-sig and $250 for other signers.
Recommendation: Vote Yes. The HIP would benefit from simply delegating to the multi-sig members themselves who should be designated the lead for compensation purposes. The current HIP describes that person as the “most active” which is not well defined, nor is it clear that more active is more responsible or even desirable. With that critique aside, it’s clear that multi-sig signers need some compensation for the time, effort, and responsibility associated with their roles, and there is not a clear reason to hold up some initial disbursements. HIPs can be amended, and we encourage amendments rather than opposition to needed-but-imperfect proposals.
HIP 9: Hop Community Grants Summary: This proposal establishes a multisig authorized to disburse small grants. It will be funded with 750,000 HOP. Grant maximum size is 100,000 HOP, and the program will sunset in 6 months unless renewed.
Recommendation: Vote Yes. This is a small-scale experiment with providing grants to developers and integrations. The cost is low, the reward potentially high, and there is no risk beyond the funds being lost. Given the five signers are core team, delegates, or large HOP holders, the risk of abuse seems low given the size of the funds.
Disclosure: GFX Labs is one signer of the multisig.
HIP 12: Multisig Signer Compensation Summary: This proposal lays out a formula to compensate signers on the Hop Community Multisig. It includes additional compensation for the lead signer, and how that is defined. Additionally, it provides a one-time payment to retroactively compensate the signers ($2000 in HOP for @dybsy and $1000 in HOP for each of the four additional signers).
Recommendation: Vote Yes. It’s clear the signers deserve some de minimis compensation at the very least. Exact amounts can always be amended through governance, and a wider discussion of multisig obligations and powers is more appropriate on its own.
We recognize that this is probably not a perfect proposal, either in format or in how it has been discussed. That being said, perfect should not be the enemy of good, and this is ultimately a very low-impact vote, authorizing only $1500 in HOP per month going forward. There’s not a compelling reason to hold up this small compensation to those holding the keys to the multisig, and so we vote Yes.
[Temperature Check] HIP 4 Amendment: Hop Delegate Incentivization Trial Summary: This proposal makes some alterations to HIP 4. Most are simple cleanup or clarification. It also makes delegates with participation of at least 70% eligible for partial compensation.
Recommendation: Vote Yes. Given the slower cadence of voting on Hop Protocol, allowing delegates with significant participation to accrue partial rewards below the 90% threshold is simply more fair. Hopefully it will keep delegates engaged, since the low number of votes means a single missed vote could otherwise eliminate compensation for multiple months.
NB: GFX authored this amendment.
1 Poll Closing January 10, 2023
HIP 13: Updating Voting Frameworks For Community Governance Summary: This proposal would add details to the governance process. The Community Multisig would be given an express mandate to act on issues with monetary value of $5000 or less, as long as they are not to the direct benefit of a person/entity beyond Hop governance. Issues involving value above that threshold, but not impacting the Hop Protocol would require only a Snapshot vote. Any proposal impacting the software of the protocol or requiring executable code would require an on-chain vote, preceded by a successful Snapshot temperature check.
Recommendation: Vote Yes. From a practical standpoint, the effect of this HIP is to provide 1) a small mandate for the Community Multisig to perform small tasks without a vote, 2) require a Snapshot vote for actions outside that mandate. The universe of tasks that would not require an on-chain vote is relatively small, since it’s limited to funds already in the Community Multisig or other authorized multisigs (such as for small grants). Transferring funds from the Hop Treasury, for instance, still requires executable code.
After extensive thought, GFX has decided to step back from governance participation at Hop Protocol.
We have increasing workload at Optimism, where GFX plays an important role in approving grants, at MakerDAO, where GFX is now the largest delegate, and at Uniswap, where GFX’s expertise in cross-chain governance is needed for a backlog of deployments. We don’t feel we can provide the significant attention to Hop that will need to successfully navigate this critical stage in its growth. There is little doubt that other prominent members of the Hop community will step in to assist with governance efforts.