HIP-033 New Direction of Hector Finance

Hectorians!

Eventful days lie behind us, which have shaken the whole crypto sector to its foundations. The drama around Luna and UST has shown us that even the unthinkable is possible and no project is too big to fail. At present, we can only speculate about the background of the events. What is certain, however, is that this will have a lasting impact on the market. At this point, our thoughts are also with all those who have suffered high financial losses due to the recent developments.

Such an event was not foreseeable and has taken many by surprise. This is certainly one of the largest destruction of assets the crypto market has seen to date. Hector Finance was not left unscathed. In addition to the price losses we are currently seeing in all projects, such as FTM, BTC and BNB, we had holdings of $40,000,000 in the UST wormhole. When we became aware of the problems with UST we acted immediately, studied the market closely and also called in external consultants for help. Due to the rapid developments in the price and the sheer amount of UST in our possession, it was not possible to liquidate the entire position quickly. Rather, we had to use every recovery to liquidate positions, always with the danger in the background of risking a total loss. Unfortunately, this was only possible with a substantial loss. Despite the rapidly progressing events, we were able to save $23,644,387, which we now hold in what we consider the safest stablecoin USDC.

As everyone is aware, the whole market is suffering at the moment. We see a high level of panic, which is reflected in significant price drops and withdrawal of cash from the crypto space. Also, stablecoins in general are currently under high pressure and panic selling is occurring. At this point, it is worth reading the recently published article about $TOR, in which we go into detail about the differences to other stablecoins: https://medium.com/@HectorDAO/why-hec-tor-and-luna-ust-are-not-alike-8f5e7d8c75ef As a result of the actual panic in the markets, people have withdrawn stables from the TOR Pool. To rebalance it, we had to remove TOR from the pool and add some USDC. This was done to avoid HEC price manipulations and because of the rebalancing, we temporarily suspended new minting of TOR. It is currently paused till further notice, until the demand will require its opening once again.

The current situation will certainly continue for some time and will require some sacrifice from everyone. This leads us to a fundamental question: Do we still believe in DeFi and its mass adaptation in the future? From our point of view, this can be answered with a clear "yes". We see more and more countries, institutions and business enterprises, which believe in the future of DeFi and actively shape it. Especially in these difficult times one thing is more important than before, namely to learn from the past to be prepared for the future! We are working on this future, more than ever before. You all know our plans for this year. Development of the NFT marketplace is in full swing and we will be able to provide you with first impressions very soon. Regarding our GameFi plans, we have partnered with Catheon Gaming, who are the creators of SolChicks among other things. Together we are working on a metaverse that will change the market for good! We are also very excited about the upcoming NFT collection (Mythos collection), which will appeal to a new target group, increase our visibility and create new opportunities.

Very recently, we were able to close the deal with JulWallet to bring $TOR into real life. Do you want to pay for your coffee with $TOR in the future? No problem! At this point a little spoiler. We are also currently working on a marketing deal with a very well-known partner in the sports sector, with global reach. More on this shortly. This all adds real value to Hector Finance and will continuously help our project to grow. We have all answered the question of whether we believe in the future of DeFi with a resounding "yes". Despite all the current adversities, moments like these are also always an opportunity. And this chance must be seized! "Be Fearful When Others Are Greedy and Greedy When Others Are Fearful."

Our treasury is our greatest asset and strongest weapon! Especially in the current situation, where stablecoins are under fire and we see significant price drops, we have the opportunity to make sustainable investments. At the moment, large parts of the treasury are invested in stablecoins and are in farming pools to in turn, secure the return for TOR and generate income. The loss generated by UST and the uncertainties in the area of stablecoins makes it necessary in our opinion to rethink and re-evaluate previously applicable rules and, above all, to incorporate unconventional considerations. We have seen that the market, currently more than ever, may require quick action. In addition, we need to ensure the growth of the treasury in order to continue to drive Hector Finance forward and to be able to continue to provide you with all the benefits. We see the current market as one of the biggest opportunities in recent years and therefore propose to shift the ratio of stablecoins to established crypto projects.

This will ensure stronger growth and higher returns through farming and staking. Our new dapp will be online in a few days and will ensure you a much better overview and details on treasury investments. Because of all this we propose:

• 80% not in stables, but in established projects (depending on fundamentals and staking/farming options)
• Stake it with best possible and secure returns
• Swap rewards for stables under consideration of the actual market conditions
• Guarantee TOR farming rewards through asset management
• Buy & Sell (DCA) through the market under examination of current developments

Every crisis is also an opportunity to be seized. We will continue to work tirelessly, together with you, on the success of Hector Finance to bring this project where it belongs! Let's walk the road to the top together! We therefore bring the above proposal to a HIP.