These are excellent points which have all been brought up internally.
I would say that as a member of the HOPR team I’m neutral on this particular proposal. I brought it forward mostly because I find it interesting and because some community members expressed a desire for this pairing in the past. (And it does feel like if the DAO is going to do this it should be in a bear market not the top of a bull…)
An argument in favour of this proposal that isn’t based on riding ETH’s coat tails is that having high liquidity in non-correlated pairs would increase the amount of arbitrage and hence trade volume. HOPR has occasionally flirted with being in the top 50 or so most traded tokens. Getting onto the first page of results can really raise awareness because suddenly you’re on all kinds of automated radars.
As the main ecosystem of HOPR is Gnosis Chain, I find it is a reasonable idea to distinguish the function of the liquidity on Ethereum and GC.
On GC where most of the HOPR activity takes place, we would need more stable pool as most of the HOPR users will/can get $HOPR directly on GC, while on Ethereum, we can utilise the liquidity for the profit-oriented and publicity purpose.
I have one question, though.
If there is “68.2m HOPR and 4.7m DAI” liquidity as mentioned in the medium article, and the sum of all the four proposals is 1.35m in liquidity (0.5m + 0.5m + 0.25m + 0.1m), where does the rest of the liquidity of 3.35m go? Is it going to stay in the HOPR-DAI pool on Ethereum? (excuse me if I’m misunderstanding anything)
If that is the case, it would make me more convinced with this proposal (as well as the other proposals).
I agree that the gas fee on Ethereum can be ridiculous. On the other hand, Gnosis Chain wouldn’t be able to take a successful road without Ethereum IMO, plus they are indeed working on the scaling as you mentioned (Eth2).
The proposal is suggesting to keep a part of current liquidity in Ethereum while moving another part to Gnosis Chain. Most of us will be buying/selling on Gnosis Chain after this change, and we let those who with big bags (and bot) play with our liquidity on Ethereum, which will bring us some profit and free publicity ;)
In that sense, the proposal is not so against your stand point, I believe.
Although Hopr Dai liquidity has been very beneficial for Hopr so far, adding eth liquidity will benefit Hopr. I think it will be beneficial for the development of the hopr that the Eth Price is currently low. With eth liquidity there will be more volume with arbitrageurs and will benefit the hopr dao fund. Eth liquidity will bring risks, but for now, I think the price of eth will drop more. If they want to adapt people to crypto, whales must give confidence, I think falling below certain price limits will affect crypto worse. I think we are at this price threshold in Eth and adding liquidity will be in the benefit of hopr. I think the amount offered is enough to avoid taking too much risk. Best Regards…
I do not support this proposal, firstly gas fees on eth are still high compared to dai, secondly our transaction volume is not large even though the list is listed on coinbase so it is difficult to earn large enough liquidity for Hopr-ETH . pair
where does the rest of the liquidity of 3.35m go? Is it going to stay in the HOPR-DAI pool on Ethereum?
This is a good point. Sorry this wasn’t clearer. Indeed, the plan is that the majority of the liquidity would stay where it is for now. This is due to a few factors:
In general we try to be fairly risk averse (as much as you can in the crypto space!)
For the format of this round of experiments, it’s important that the proposals are mutually exclusive, so that any combination can be accepted / rejected. To avoid clashing the numbers should stay relatively low.
We fully support Gnosis Chain, but the numbers there are very different than on Ethereum. The DAO pool on ETH is extremely deep. We could actually be the deepest pool on multiple GC DEXs if we moved it all, outweighing even major pairs like wETH / wBTC. While that might net us a temporary marketing boost, it feels like that wouldn’t be an efficient use of the funds.
I’ll make a new post later today in the main category to provide some more of this background context
The being in the top X I never considered and it does make sense. There has been a study on companies on the bottom of the S&P500 I believe (think #499, #500) at that point, companies drop in and out of the index due to fluctuations in market cap. The research has shown that once a company enters the S&P500, institutional trading/investing immediately increased even tho it might just have jumped from #501 largest company to #499.
An important question if that is a driver of the proposal would then need to be if a 500k liquidity pool is enough to attract these traders and arbitragers? Or do you believe we make it to the top 50 and then both pools gain visibility?
I think this proposal have a big disadvantage at the very high gas fees on ETH are still high compared to DAI. While our transaction volume is still small.
But the Ethereum network deserves special attention and the user/investor have more attention. I think we are at this price threshold in ETH and adding liquidity will be in the benefit of Hopr.
This is an issue that needs to be carefully considered, currently, the liquidity on Uniswap is very low, but the current market is also favoring newer ones, so if the team does well, the opportunity will increase. the price for hopr is very good.
Of all the offerings, I like this one the most as it doesn’t take liquidity from the Ethereum main chain, which is the most popular and used by most. Swapping pairs is also a good idea as pairing with Ether will increase the amount of liquidity and allow more people to consider buying as many hold Ethereum.
Do not forget about about the impermanent loss. Obviously, huge price fluctuations in the crypto market are waiting for us in the near future, and even in fact it does not matter in which direction they will be.
A pool is maximally profitable only if the prices of the assets at the time of closing in it are sufficiently close enough to the opening price
But from historical experience, we see that HOPR practically did not correlate with Etherium in the previous growth segments, nor did it correlate in the previous fall segments. Which is easy to verify.
If it were simple enough to create a pool with ETH or say BTC and the asset price would start to correlate, then I think everyone would do so and we would see the same or strongly correlated charts on all assets. But obviously, this is different from the current reality
In addition, we have a pair of HOPR/ETH on gate.io . And there the trading volume does not exceed 5k$. So I don’t see an acute shortage of liquidity in this pair.
Such a pool will only create opportunities for arbitration and earnings on it. But this earnings does not appear out of thin air, it is paid from the pool. And high commissions within the etherium network will prevent smaller retailers from fully using this pool.
I think that the losses inside the pool will exceed the positive moments that it will bring. I think it would be more rational to direct these funds to the development and promotion of the project, as well as to expand the provision of liquidity by supporting proposals 1,2,3.
I think it will be possible to return to the discussion of creating such a pool when the project starts working as a product and becomes an integral part of web3
I think this is a reasonable suggestion. Suitable for lovers of ETH, not stablecoins. $500,000 is the optimal amount, no more. I would also suggest introducing a pair with USDT in addition to or instead of DAI.
We may keep 50% of the liquid on this. Most active users are still on Ethereum chain. The rest of the liquid will be converted to HOPR-xDai pair on Uniswap on xDai chain
