Most of you will know me, but in case you don’t I’m Sebastian Bürgel, HOPR founder. This post is to provide some context and endorsement for the proposal from the newly established HOPR rise holding company. I hope you’ll support this proposal and the exciting opportunity it represents for HOPR token holders, the HOPR ecosystem and web3 governance in general: it’s very rare for decentralized entities to be able to engage in these kinds of investment activities.
First of all, the proposal is genuine and endorsed by the HOPR Association. For legal reasons it’s important that it doesn’t come from the HOPR founders or the HOPR Association. We’re currently engaged in an overhaul of the HOPR governance and a big part of it is the creation of separate legal entities with specific purposes, rather than trying to lump everything under the vague heading of “DAO”.
For those interested, I’d recommend reading this great post from web3 lawyer Gabriel Shapiro.
For my part, I’ll focus on providing some context for this proposal and why we think it’s a great opportunity for HOPR token holders
#Investment in HOPR Ecosystem
If you’ve been following HOPR’s progress over the past few months, you’ll know that the network is bigger and more stable than ever and we’re starting to see real products that use HOPR, most notably RPCh.
With RPCh, the HOPR ecosystem has its first paying clients and with the imminent switch of the network from mHOPR to wxHOPR, HOPR will have its first protocol revenue. Having sustainable protocol revenue is a huge deal in crypto. We have huge goals for RPCh but even in its early stages, this revenue will place us in the top 100 crypto projects by revenue - among projects such as TheGraph or Zerion.
This is a huge deal for investors, and RPCh already has a lot of interest. And RPCh is just the first of many products to launch on top of HOPR.
HOPR token holders benefit from these products indirectly: these products use the HOPR mixnet, so node runners earn tokens for relaying the data they need. And as more products and users need HOPR tokens, the benefits should also feed back to HOPR token holders.
However, we think it also makes sense for HOPR token holders to be able to benefit directly from these products, and at the very earliest stages. This investment represents the kind of opportunity usually reserved for VCs and other similar players. In the new exciting world of web3, we think it makes sense for these opportunities to be open to an entire community and not just the privileged few.
This also intertwines closely with another issue which we’ve been dealing with throughout these governance experiments: the launch of the HOPR token raised a lot of money, and it’s clear that it could be managed more efficiently.
The HOPR token has some of the deepest liquidity in crypto, absolutely enormous given the HOPR market cap. This has upsides and downsides, but the result is that the price is extremely resistant to change. It also means that there’s a lot of money that’s doing basically nothing.
We discussed this at length during our fifth governance experiment, where we looked into automated liquidity management from external providers. Those trials are ongoing, but it’s also clear that these services make the issue worse, not better: efficiently managing our liquidity frees up even more funds!
Having unused money is a great problem to have, but in the current landscape there are limitations on how this money can be used. Investing in the future of the HOPR ecosystem is an exciting option which we feel makes a lot of sense.
Finally, we’ve been planning huge upgrades to our governance behind the scenes. You’ll be hearing a lot more about this over the upcoming weeks, but the tl;dr is that hopefully this will be the last (or last but one) governance experiment and HOPR governance will evolve to its final form: something much more decentralized, much more autonomous, and much more organized.
There’s a lot of legal admin to take care of before we can proceed, but this proposal will help to get things in the right place for the new system.
This is a lot to take in, so we’ll definitely be checking in regularly to support the discussion. We’ll also be hosting a Twitter Space on Tuesday May 9th at 4pm CEST, as these were very successful in the past.