[Temperature Check] HIP 7 - AMM and Bonder Liquidity Incentives
This is a temperature check in line with current Hop governance process 2.
Background
As discussed in the Request For Comment, previous posts, community calls, and in Discord, Hop could benefit from additional liquidity in the bridge AMMs. Increased liquidity may attract larger transfers and allow arbitrageurs to maintain tighter spreads improving bridge rates for all users. Providing HOP incentives for Hop LPs has the potential to increase AMM liquidity significantly.
In addition, Bonder returns have been low or have required a high bonder fee percentage to maintain adequate returns. A multitude of recent bridge hacks have also raised the risk profile of bridges in general despite Hop’s strong track record of security. As a result, bonders will need additional incentives if Hop DAO wishes to keep bonder fees low and keep bonders interested until a decentralized bonder network is achieved.
Proposal
Provide 2,000,000 HOP per month to Hop LPs and 800,000 HOP per month to Hop bonders. The annualized issuance related to these rewards is 3.36% of the HOP supply.
LP Incentives
2,000,000 HOP per month
| Network | Network % | Network HOP/month | Asset | Asset % of Network | HOP/month |
|---|---|---|---|---|---|
| Arbitrum | 40% | 800,000 | ETH | 52.00% | 416,000 |
| USDC | 34.50% | 276,000 | |||
| DAI | 7.00% | 56,000 | |||
| USDT | 6.50% | 52,000 | |||
| Optimism | 34% | 680,000 | ETH | 51.00% | 346,800 |
| USDC | 35.50% | 241,400 | |||
| DAI | 7.50% | 51,000 | |||
| USDT | 6.00% | 40,800 | |||
| Polygon | 21.50% | 430,000 | ETH | 42.50% | 182,750 |
| USDC | 41.00% | 176,300 | |||
| DAI | 7.00% | 30,100 | |||
| USDT | 9.50% | 40,850 | |||
| Gnosis | 4.50% | 90,000 | ETH | 40.00% | 36,000 |
| USDC | 31.00% | 27,900 | |||
| DAI | 19.00% | 17,100 | |||
| USDT | 10.00% | 9,000 |
Bonder Incentives
800,000 HOP per month
| Bonder | Est. Liquidity | Liquidity % | HOP Rewards/m |
|---|---|---|---|
| ETH | $12,000,000 | 57.14% | 457,142.86 |
| USDC | $6,000,000 | 28.57% | 228,571.43 |
| DAI | $1,500,000 | 7.14% | 57,142.86 |
| USDT | $1,500,000 | 7.14% | 57,142.86 |
Retroactive Bonder Incentives
800,000 HOP per month starting 6/10/22 (TGE)
June (Prorated for 21 days)
| Bonder | Current Liquidity | Liquidity % | HOP Rewards |
|---|---|---|---|
| ETH | $11,300,000 | 46.27% | 259,112.59 |
| USDC | $6,000,000 | 24.57% | 137,581.91 |
| USDT | $2,121,816 | 8.69% | 48,653.92 |
| DAI | $5,000,000 | 20.47% | 114,651.59 |
July
| Bonder | Est. Liquidity | Liquidity % | HOP Rewards |
|---|---|---|---|
| ETH | $11,500,000 | 49.04% | 392,286.99 |
| USDC | $6,000,000 | 25.58% | 204,671.47 |
| USDT | $1,952,218 | 8.32% | 66,593.89 |
| DAI | $4,000,000 | 17.06% | 136,447.65 |
August
| Bonder | Est. Liquidity | Liquidity % | HOP Rewards |
|---|---|---|---|
| ETH | $15,000,000 | 62.50% | 500,000.00 |
| USDC | $6,000,000 | 25.00% | 200,000.00 |
| USDT | $1,500,000 | 6.25% | 50,000.00 |
| DAI | $1,500,000 | 6.25% | 50,000.00 |
September
| Bonder | Est. Liquidity | Liquidity % | HOP Rewards |
|---|---|---|---|
| ETH | $11,700,000 | 56.52% | 452,173.91 |
| USDC | $6,000,000 | 28.99% | 231,884.06 |
| USDT | $1,500,000 | 7.25% | 57,971.01 |
| DAI | $1,500,000 | 7.25% | 57,971.01 |
Off-Chain Vote
Timeline
Sep 20, 2022Proposal created
Sep 20, 2022Proposal vote started
Sep 25, 2022Proposal vote ended
Mar 12, 2026Proposal updated