[GF: Phase 0 Proposal] Hop Protocol

ARCHIVED & OLD Missions Governance Fund: Phase 0
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Project Name: Hop Protocol

Author Name: Chris

Defillama TVL (at snapshot): $12,288,329

Transactions/day (at snapshot) : 693

Tier: 2

Optimism native: No

Revisions to metrics used: N/A

Number of OP tokens to claim: 1,000,000

L2 Recipient Address: 0xC988107688b750dee6237B85A3ca49ba0a65DaB0

Proposal for token distribution (under 1000 words):

Hop will use the allocated $OP to reduce the net cost for users onboarding to Optimism using Hop Protocol.

How will the OP tokens be distributed?

Every user that onboards to Optimism using Hop Protocol will have 80% of their total onboarding fees refunded in $OP. This will significantly reduce the net cost for users to send funds to Optimism and give them a stake in the Optimism network. The $OP rewards will cover 80% of users’ total onboarding fees, including gas fees, AMM LP fees, and bonder fees but will not include the AMM rate.

How will this distribution incentivize usage and liquidity on Optimism?

Lowering the net cost for users to onboard to Optimism by 80% will make it much cheaper for new users to get funds onto the network to give it a try. Also, users who regularly bridge funds will earn a meaningful amount of $OP rewards, similarly to a loyalty points program making it more likely to become their goto L2.

Why will the incentivized users and liquidity remain after incentives dry up?

The incentives will help cover fees to onboard to Optimism. Once there, users will leave their funds where they can enjoy cheap transaction fees, a buttery-smooth user experience, and a rich ecosystem of innovative Web3 applications.

Over what period of time will the tokens be distributed?

This will depend on the market price of $OP and the gas markets on Hop’s various supported networks, as well as the prices of their native tokens.

How much will your project match in co-incentives?

The Hop team cannot speak for the upcoming Hop DAO, but it is likely that the Hop community will set up liquidity mining for each of the Hop AMMs on Optimism using HOP incentives. This will improve the transfer rates, especially for users transacting with larger amounts.

Execution

All rewards calculations will be done off-chain using the $OP price at the time of the bridge transaction. Each month, a Merkle drop with all $OP rewards will be deployed on Optimism. All rewards that are not claimed from the previous month will roll over to the new Merkle Drop contract where they will be claimable along with any additional rewards the user has accrued.

Only direct interactions with the Hop Contracts should be considered for $OP rewards. Interactions that go through wrapper contracts, such as those deployed by bridge aggregators, add a ~20% gas premium vs using Hop directly, which works against the goals of this proposal.

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自古得道多助失道寡助，您失去了社区的人心，开启了区块链的倒退模式。我将保留我的op投票权 对你投出反对票

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This is a brilliant proposal and will go a long way in onboarding users on to Optimism. Couple of observations:

  • The refund is wasted on larger transfers (i.e. >$10,000), does the data suggest this is rare enough for it to not matter?
  • A month is too long given how volatile crypto is, esp a new token like $OP, any way to shorten this period?
  • It feels like there should be a cap according to anomalous gas fees on Ethereum specifically - e.g. we don’t want to refund massive amounts of $OP if someone bridged in the middle of an ape drop at 6,000 gwei. Better incentivize them to wait.
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How is this not a way to corner the market as a bridge? I understand the benefit to optimism and the users but likewise this seems to go against the philosophy of decentralization. Why is Hop the primary bridge to receive this funding and not other bridges to optimism like the other ones on optimism bridge page? It might be better to use this plan for all the bridges that connect to optimism and not just one.

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I am agree.this idea is very nice

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希望此次的提案可以提高大家的收益，同时社区也要为可持续发展做好准备

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what next plaing HOP project…?

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great proposal , It is a very good idea to help build the community and project

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Thank you! And this is great feedback.

  • The refund is wasted on larger transfers (i.e. >$10,000), does the data suggest this is rare enough for it to not matter?

When thinking through this, the idea was to cater the subsidy more towards smaller transfers where fees are the primary cost vs liquidity mining which would benefit larger transfers where slippage is the primary cost but still strike a nice balance. It could further be slanted toward smaller transfers by just partially refunding gas fees and not LP and bonder fees. A nice middle ground could also be found by capping rewards like you mentioned.

  • A month is too long given how volatile crypto is, esp a new token like $OP, any way to shorten this period?

It should be possible to sufficiently automate this process so it can be run on a weekly cadence. This is a good point.

  • It feels like there should be a cap according to anomalous gas fees on Ethereum specifically - e.g. we don’t want to refund massive amounts of $OP if someone bridged in the middle of an ape drop at 6,000 gwei. Better incentivize them to wait.

Completely agree that there should be a cap. Maybe a quadratic reward that decreases as total fees increase would solve this as well as dampen the refund for larger transfers (e.g., A transfer with $20 of fees gets an 80% refund and a transfer with $300 of fees gets a 50% refund.) And then there would be an implicit max refund that get’s approached asymptotically.

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I like the gas fee refund for onboarding. Great idea, I get you’re also creating room for your native DAO too. Nice balance.

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That’s business. If other bridges feel this is unfair then they should say something.

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No doubt it’s business the question is whether this is actually in line with the philosophy of optimism and decentralization. I also question whether onboarding optimism is the objective or the objective is hop usage and dominance as the bridge people use when choosing between bridges to optimism. Look personally this proposal is to my benefit. I use a number of bridges and if this were to pass I would mainly use hop for profit sake but the question is whether this is really delivering a public good or a hop good. It’s a good idea for hop but is it in line with optimism philosophy of decentralization, not as sure. I don’t know if optimism needs to be using OP to choose winners among competitors but that maybe just me.

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Other bridges have also put forth proposals to incentivize users with $OP, not just the Hop team. They had the option to do this as well, but came up with different plans. Love this idea!

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Must have missed those proposals would love to see them though, because that would certainly be in line with a decentralized philosophy.

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This is a brilliant proposal and will go a long way in onboarding users on to Optimism.

Although there are many swindlers and air drop hunters to attack the reputation of the community. But I hope the hop agreement can stick to its own way.

They are shameful. They did not help the agreement itself.

Is not a valid user.

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We have an official bridge. We don’t need to pass you.
A just cause has more help than an unjust cause.

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welldone good protocol

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砸人饭碗如杀人父母，对于这种没有道德性的项目方人人得而诛之

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web2和web3的本质是一样的！ hop这种做法无疑将自己推入深渊！不管web2还是web3核心点都离不开用户！流量为王！再见hop！

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The essence of web2 and web3 is the same! hop this approach will undoubtedly push themselves into the abyss! Whether web2 or web3 core point can not be separated from the user! Traffic is king! Bye bye hop!