[Grant Proposal] Incentive Strategy Research Report of Hop Protocol Competitors

Summary

This grant proposal seeks funding to produce a report analysing how Hop Protocol’s competitors approach user incentives. The report would highlight the different competitors, their incentive strategies, the user behaviour they seek to encourage, and how their various approaches have worked so far.

Motivation

In the build-up to the governance vote for whether to add fast bridging support for MAGIC, @max-andrew raised an important concern regarding the sustainability of adding Hop tokens as incentives for every asset the Hop Protocol adds fast bridging support for. This concern was further echoed by other members of the community, with the particular focus being on what would be sustainable and valuable for the Hop Protocol in the long term.

The goal of this report is to present the Hop Community with a comprehensive analysis of incentivization strategies for bridging protocols. It also aims to provide actionable steps for the community to take as initial steps toward designing a sustainable incentive mechanism that effectively serves the Hop Protocol.

Why should StableLab execute this grant request?

As a Hop DAO Delegate and active participant in the Hop DAO community, the StableLab team has the necessary context to develop this research report to the unique needs of the Hop Protocol. StableLab is a governance firm specialising in comprehensive services and products for DAOs. We work with numerous DeFi DAOs on Ethereum, propelling governance forward through active participation and research. Our work extends across major DeFi protocols such as MakerDAO, Optimism, Aave, 1inch, Balancer, Element, Compound, and Uniswap. We formulate systematic frameworks for DAOs that encompasses governance methodologies, decentralised workforce, implementation, documentation, communication, and community engagement.

Our team’s diverse background brings a nuanced perspective to our work, informed by our extensive experience across the various protocols we contribute to.

Deliverable

Should the grant proposal be approved, StableLab will submit a research report to the Hop DAO. The report will contain an in-depth analysis of Hop competitors, including how they approach user incentives, similarities and differences, and what the Hop Protocol can possibly learn and utilise. This report will be submitted in a PDF format.

Payment Specification

We are requesting $2,500 to be paid in HOP Tokens to this address: 0x9c489E4efba90A67299C1097a8628e233C33BB7B

Note: Payment will be made after the report has been submitted to the Hop DAO Forum.

1 Like

Thanks @Kene_StableLab

Sounds like a resonable ask to me. Do you think it’s possible to also research and suggest some value accural mechanisms to the HOP token in addition to the research on optimal distribution mechanisms?

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Thank you for replying!

While this is not currently within the scope of this grant proposal, I believe that with the rollout of the Hop Protocol Roadmap, there will be several opportunities to think through how we can design value accrual for the Hop Token.
It is my opinion that we may be too early in building out the Hop Protocol and all its products to start a conversation around value accrual.

2 Likes

I would be for this, as I think getting the incentivization issue figured out is really important at this time and this sounds like a good step towards getting there. Or at a minimum, something to force the ball rolling on this past the discussion phase. Without some type of basic guide-rails for incentivization payouts, I fear 12k hop per month is going to become a standard simply by happenstance and doesn’t allow flexibility project to project.

I also fear not resolving this incentivization issue, in the short term, hinders our ability to effectively market out new projects to add.

As for cost, I think $2,500 is a reasonable initial expense. I’d rather spend the $2,500 now to avoid overspending 10s / 100s of thousands of dollars down the road, so I’d imagine this will effectively pay for itself.

@Kene_StableLab - If passed, what is the turnaround time for something like this?

I would say two months is enough time to work on this.

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Thanks for sharing Kene. I think this report will help us delegates be better informed to vote on incentive programs. Will this report be dynamic? Meaning, will the report be updated as incentive programs change or is it a one time snapshot?

@francom This report will be research-based, it wont be updated as incentives programs change, it will simply be a research report looking at solving our incentive management problem at this time.

Although generally I’d be wary of setting a precedent for rubber stamping report style deliverables for the grant program, I think this is a fair exception to that for a number of reasons. @Kene_StableLab has been so involved and instrumental in governance thus far that, as he says, he “has the necessary context to develop this research report to the unique needs of the Hop Protocol.” Sounds like you can start working on this Kene

2 Likes

Thank you for the feedback and consideration.
@fourpoops