[HIP-45] Liquidity Strategy Phase 2: Hermes Rewards Boost

I. Introduction

This proposal outlines Phase 2 of the Hermes Liquidity Strategy, titled "Hermes Rewards Boost." The objective of this phase is to deepen liquidity on the Arbitrum Hermes/WETH pair and align incentives to support sustained platform emissions and adoption. This will be achieved through a strategic deployment of utility tokens via the decentralized vote strategies system powered by the Maia Vault contract.

NOTE: This proposal does not interact with any Timelock contract or any governance onchain execution. Hence, this is the last step of the proposal. If this snapshot vote is approved, the "Implementation Plan" will be executed.

II. Background and Rationale

Hermes Protocol continues to evolve towards more efficient liquidity provisioning and sustainable growth. As our ecosystem matures, deeper and more targeted liquidity is required and we can now leverage the new Maia Vaults to meet this need.

At the same time, Ethereum DeFi activity is accelerating, presenting a timely opportunity to secure our position within the broader ecosystem. Since the entire Hermes system is underpinned by HERMES emissions, maintaining strong, sustained liquidity for HERMES is not optional — it is essential. This phase ensures we stay competitive and prepared for the next wave of DeFi growth.

To address this, we are launching Phase 2: Hermes Rewards Boost. This next step is designed to reinforce gauge incentives where it matters most — specifically, the Hermes/WETH pool — by leveraging our governance-owned utility token holdings.

There are a lot of safety checks in the Vote Maia smart contract to verify it's backing, when setting or migrating a new vault it checks that there are exactly as many utility tokens as there are bHERMES (93,745,640 bHERMES). Because it does not take into account claimed bHERMES-G (Gauge Weight) and bHERMES-V (Votes) utility tokens from vMAIA, then we need to transfer enough utility tokens to enable adding the new Partner Vault.

Vote Maia contract does not require the transfer of bHERMES-B (Gauge Boost), as vMAIA does not claim this utility token. However, transferring the available amount claimed from the bHERMES also benefits the whole Hermes ecosystem allowing for higher rewards in Maia Boosted Strategies.

III. Proposal Details

Under this proposal, up to 25 million bHERMES's utility tokens will be moved from the Hermes DAO’s treasury to the VoteMaia contract. This contract enables decentralized vote delegation and strategy execution, ideal for dynamic liquidity deployment in a multichain environment. This will leave the DAO with at least 31.4M bHERMES. Maia's Partner vault will end up with exactly 93,745,640 bHERMES-G and bHERMES-V.

Key points:

• The bHERMES tokens will be pledged to perpetually maintain at least 20% of Vote Maia's vote allocation in favour of the gauges with HERMES token. At first, the whole amount of tokens will be allocated towards HERMES/WETH gauge in Arbitrum, making up to 40% of Maia's votes.
• This pledge increases voting weight on a critical liquidity pair, deepening the liquidity pool and enhancing the attractiveness of Hermes emissions.
• The VoteMaia contract allows us to automate and optimize this strategy over time without requiring manual reallocation by governance each epoch.

This mechanism ensures that liquidity incentives remain aligned with protocol growth and product development priorities.

IV. Implementation Plan

1. Tokens Movement: Claim and transfer up to 25M bHERMES utility tokens from the DAO’s multisig custody to the VoteMaia contract.
2. Gauge Vote Commitment: Maia will perpetually allocate at least 20% voting power towards gauges with HERMES token. Initially will increase votes for Hermes/WETH gauge by up to 25%.
3. Vault Readiness: This pledge also fulfills a prerequisite to activate the upcoming Maia Vault, enabling a new mechanism for yield generation and protocol sustainability.

V. Governance Considerations

• The movement of bHERMES to VoteMaia represents a strategic and non-reversible commitment.
• The governance community retains indirect control through parameter changes or future proposals altering VoteMaia strategies.

VI. Conclusion

The Hermes Rewards Boost marks a pivotal step in advancing the Hermes Protocol's liquidity strategy. By pledging bHERMES voting power to the Hermes gauges via VoteMaia, we enhance on-chain liquidity depth, better align emissions with protocol goals, and enable critical new features — most notably, the Maia Vault. This proposal empowers Hermes to evolve its DeFi footprint while maintaining robust community governance over strategic liquidity decisions.