- Hop Protocols(HOP) help in sending tokens across rollups.
- Users can quickly and seamlessly swap between Ethereum’s layer 2 network
Since the launch of blockchain systems, scaling is the main issue connected with them. Thanks to Ethereum Networks which comes with various scaling solutions. There are various blockchain systems built on the Ethereum Network. These blockchain systems have their own governance tokens. However, the problem arises when one has to switch between these blockchain systems or have to exchange a token from one another.
Thankfully, Hop Protocol comes to the rescue, allowing users to swap tokens within Ethereum’s network. This advanced mechanism protocol enables seamless transfer of crypto assets across sidechains, and Layer2 solutions almost immediately. To know more about it, continue reading the article.
HOP Protocol – A Bridge Allowing Swap of Tokens
HOP protocol is a collection of algorithms that helps users in moving their crypto assets seamlessly between Ethereum networks, sidechains, and rollups. The protocol swaps the tokens in such a way that users can never lose their crypto assets. It allows the users to send a token from one sidechain to another immediately.
Built with the highest level of security, HOP protocol eliminates any single point of failure within the system. The protocol compresses transfers into Bundles and uses the native bridges to transfer these Bundles between Ethereum networks. The primary goal of the protocolis to enhance Layer2 scalability in blockchain systems.
How HOP Protocol Work?
HOP protocol relies on market makers known as Bonders to function. These Bonders provide liquidity at the destination chain and take a small fee as an exchange. However, these Bonders provide liquidity in the form of hTokens. These tokens allow the protocol to mint and burn tokens programmatically so as to move them easily across the chains.
The hTokens are then exchanged with the native token on the destination chain. Hence, allowing the users to seamlessly transfer tokens from one place to another. The most important thing in the whole process is that the users will receive funds even if the Bonders are offline. However, in this, users have to wait until the on-chain proof is executed so that the users can withdraw their tokens manually from the destination chain. Even if the whole process got delayed, the protocol can’t take your funds.
HOP Tokens
HOP Tokens are used for governance in Hop DAO (Decentralized Autonomous Organization). These tokens help the users to govern the ongoing actions and direction of the HOP protocol. The initial supply of these tokens was 1 Billion HOP Tokens. The distribution was done in the following way:
- 8% airdrop to early participants
- 60.5% for the HOP DAO treasury
- 22.45% for the initial development team
- 2.8% saved for the future team members
- 6.25% for investors
Concluding Thoughts
In a nutshell, HOP protocols facilitates users to swap tokens across various chains. The protocol’s main aim is to build a community that helps with Etheruem’s scalability. The network enables the whole process of transfer of tokens with the help of market makers called Bonders. Bonders facilitate liquidity by charging a small fee. However, this fee depends on the crypto assets or tokens.
Also, the protocol has tokens that help the users to take part in governance and have voting rights. With its secure and efficient mechanism, the HOP protocol holds great promise for the future of the crypto world.
