HOP "fee switch" activation


With the recent influx of attention on HOP following the Coinbase L2 BASE news, I believe HOP is at a pivotal moment in its history and could see much wider adoption with the advent of deeper liquidity, increased decentralization, and increased utility of the HOP token itself (and quite possibly HOP LP tokens).

This proposal aims to activate a “fee switch” mechanism for HOP token and/or HOP LP tokens, which will redirect a portion of the transaction fees to HOP and/or HOP LP stakers, thereby incentivizing users to hold and stake HOP tokens or provide HOP liquidity.


Activate fee switch for HOP Token and/or HOP LP tokens.

Defining the fee distribution:

We will need to define the fee distribution model, which will determine how much of the transaction fees will be distributed to token/LP stakers. The distribution model will be designed to incentivize users to hold and stake HOP tokens, while also ensuring that the liquidity providers are fairly compensated.


Activating the fee switch mechanism for HOP token has several benefits:

  1. Incentivizes users to hold and stake HOP tokens as well as provide HOP liquidity, which increases the token’s value and liquidity.

  2. Rewards token stakers with a portion of the transaction fees, which provides a passive income stream for HOP token stakers and LP providers.

  3. Increases the decentralization of the Hop Protocol by encouraging more token holders to participate in securing the network.


Activating the fee switch mechanism for HOP token and HOP LPs will create a win-win situation for both the protocol and the token holders. It incentivizes users to hold and stake HOP tokens, which increases the token’s value and liquidity, while also rewarding token stakers with a share of the transaction fees. I believe that activating the fee switch mechanism will strengthen the Hop Protocol and make it more attractive to users and investors.

I think this argument hinges on the idea that what Hop is missing is liquidity and that we should promote that at the expense of users (who will be the ones paying the higher fees). I’m a bit skeptical of this because I think Hop’s path towards growth is by lowering costs for users. This increased quantity demanded for swapping will set Hop on a much stronger path towards long term growth in my view and LPs will naturally come as a consequence of where the demand is. I think there may come a day soon for us to activate the fee switch, but I don’t think we’re there yet.