[Temperature Check] - Revised HOP Liquidity Incentive - Continued Discussion


This temperature check follows on the back of two other RFC posts from recent months, both of which may be found here and here (most recent). This topic has gained relatively strong attention from the community with feedback of many types. I encourage all voters to read discussions in both the governance forums and within the Hop Community Discord. The most recent RFC has important and detailed information regarding this proposal’s:

  1. Problem Statement

  2. Logic & Benefits

  3. Key Assumptions

  4. Risks & Mitigation

The below sections aim to use community feedback to provide multiple paths forward to increasing liquidity for the HOP token. I would love to gain any last minute feedback before moving a vote to Snapshot in the next several days if there are any recommendations to provide additional details, make small changes or better follow the governance process.

Community Feedback From the RFC

Given our strong relationship with the Rocketpool community, @dybsy communicated that it would be possible to get an allocation of 200 RPL ($9,000) to incentivize an rETH / HOP pool on Arbitrum or Optimism. While liquid staking tokens have yet to gain significant traction on L2 networks, the adoption of rETH on Arbitrum and Optimism is nearly inevitable. There was some soft support for moving forward on a HOP / rETH partnership with co-incentives in RPL & ARB / OP.

@david-mihal suggested that 1.) This proposal focuses on Protocol Owned Liquidity (PoL) via Bond Protocol, formerly Olympus Pro. This would allow the Hop treasury to acquire permanent HOP LP liquidity at a slight premium using ARB and OP acquired via airdrop. 2.) Instead of increasing liquidity, we could use Bond Protocol to garner Protocol Owned Bridge liquidity, allowing the protocol to pull back on HOP incentives that are currently being issued to incentivize stablecoin & ETH LPs.

#2 may be slightly out of the scope for the current proposal, but I believe it is a very good idea and should be explored in another governance discussion.

Potential Next Steps

  1. Partner with Bond Protocol to gain HOP / USDC PoL on the Arbitrum Network

  2. Partner with RocketPool to co-incentivize HOP / rETH liquidity on Arbitrum & Optimism

  3. Partner with both Bond Protocol & RocketPool to gain HOP / rETH PoL on the Arbitrum Network

  4. Remain Unchanged

Detailed Requirements for Each Outcome

  1. Partner with Bond Protocol to gain HOP / ETH PoL on the Arbitrum Network
  • As noted by @bigfishjoe , Bond Protocol is ERC-20 token agnostic, so any token or LP may be used on their contracts & all that would be needed is a “Market Verification Pull Request” so that their team will have the Payout & Quote token addresses and price sources. As Camelot’s HOP / ETH V2 pairing has previous activity and their LP token is an ERC-20 as Bond requires, I recommend that we move forward with this asset as the Quote token.

I am happy to discuss using USDC as the pairing or using Uniswap V3 as the chosen exchange if anyone is familiar with using Timeless Finance / Bunni.

  • Camelot V2 HOP / ETH Contract Address: 0xb6f8E925DF16Db713c4c235AbbEBA8B24e59B81C

  • A 15,000 ARB, 2 week trial period was recommended to gauge the demand before allocating more capital to this effort. If selected, the Hop community multi-signers on Arbitrum would be required to allocate 15,000 ARB tokens as the payout asset on Bond Protocol & monitor demand before allocating any more capital.

  • ARB Contract Address: 0x912CE59144191C1204E64559FE8253a0e49E6548

  • If successful (bonds sell at a <= 10% discount), another 2 week, 30,000 ARB market will be launched and governance can reconvene after to decide a path forward.

  1. As noted in early proposals, Camelot allows for permissionless incentivization on their liquidity pools. If voted on:
  • Dybsy and others could work with the Rocketpool community to obtain the 200 RPL allocation to the HOP / rETH pool on Arbitrum
  • The team & community would need to initialize a spNFT position for the HOP / rETH pairing on Camelot
  • The community multi-signers would allocate 10% of the treasury’s ARB allocation (167k ARB) to co-incentivizing the pool.

This selection would require waiting until Hop launches rETH bridging support.

  1. The next steps in number 1 will remain the same, however HOP / rETH will be the quote asset and the 2 week trial period could be incentivized using RPL. A co-marketing effort with Bond, Hop & RocketPool could begin once the Bond market is live.

This selection would require waiting until Hop launches rETH bridging support

  1. No Changes

Thanks for posting this @RichardShart

For potential next steps here, all are certainly possible, and we’d look forward to hearing the HOP community’s thoughts on Bonds for POL.

In prev gov posts (and if we can make a suggestion) - Bonds are usually presented as go/no-go (max 2 bond options) to keep surface area of the vote concise…so we could reconsider:

  1. HOP/ETH POL Bonds (paying ARB, or HOP) - in Partnership with Hop, Bond Protocol, selected incentivized LP position (e.g. Camelot)
  2. HOP/rETH POL Bonds (paying ARB, or HOP) - in Partnership with Hop, Rocket Pool, Bond Protocol
  3. No changes

Looking forward to hearing everyone’s thoughts.

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Hey @bigfishjoe, thanks for weighing in - great to have your expertise. I think this is a very reasonable change and also helps narrow the scope a bit to simplify any changes if it does pass. Would love to hear any last comments from @thegreg.eth @dybsy @david-mihal @fourpoops if they had any. Thanks again

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