Hop

Bridging

Hop is a protocol for sending tokens across rollups and their shared Layer-1 network in a quick and trustless manner.

Risk Rating
Average
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Hop is a rollup dedicated bridge that focuses on transferring tokens between the Ethereum mainnet and its Layer-2 network in a quick and trustless manner.
What we like less
Hop uses a few whitelisted Bonders to facilitate near-instant asset transfers. User transactions can be delayed if Bonders go offline.
What it means for you
Hop offers you one of the most widely used bridging solutions for the Ethereum network with cheap bridging fees.

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Information
Exploit/Hacks
None
Info
  • Website
  • Token: HOP
  • Tags: Bridging
Key Metrics
  • TVL: $59M (Rank #85)
  • TVL Ranking by Bridging: #0
  • Blockchain: Ethereum, Arbitrum, Base, Optimism, Polygon, xDai, Arbitrum Nova
  • Chain TVL
    • Ethereum: $45.81M
    • Arbitrum: $7.31M
    • Base: $2.23M
    • Optimism: $2.1M
    • Polygon: $1.05M
    • Others: $451.92K
Risk Assessment
Average
Protocol Code Quality
  • Code reviewed by several experienced auditors including Solidified and Trail of Bits
  • Public team promotes accountability
  • No documented protocol hacks since launch
Protocol Maturity
  • Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 10% by total value locked reduces risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
  • Timelock is less than 48hrs, which provides users with less time to exit if any malicious upgrades are approved
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • Locally verified bridge that uses liquidity networks on each chain to enable cross-chain swaps; this system typically uses a lock/unlock mechanism to ensure the safety of user funds
  • Bridge messages are validated optimistically which means they are assumed to be correct unless challenged within a dispute period; optimistic bridges require only a single honest watcher to verify updates so an attacker can never be guaranteed to steal funds
Things to know about Hop

How Hop works

Hop is a rollup-centric bridging solution that allows digital assets to be transferred between Layer-1 and Layer-2 networks. It consists of a rollup-to-rollup general token bridge for Ethereum's L2 ecosystem that enables users to send tokens quickly and trustlessly between rollups. To achieve this, Hop uses hTokens and liquidity pools. hTokens are intermediary cross-network bridge assets that allow tokens to move quickly across chains. The user only uses the native tokens when using the Hop bridge and does not directly deal with hTokens. Hop leverages the automated market maker (AMM) concept to create liquidity pools consisting of the native token and hTokens. Using AMMs, Hop swaps between the hTokens and the native assets on each chain. Hop uses Bonders to facilitate near-instant transfers across rollups. Bonders run a verifier node on each Layer-2 network and possess the ability to verify transactions. Bonders front liquidity on the destination chains in exchange for a small fee when sending between Layer-2s and back to Layer-1. There is no Bonder fee when sending from Ethereum to Layer-2 chains. They are assured their liquidity will eventually return when the transfer settles on Layer-1. The upfront liquidity provided by Bonders is what allows Hop to quickly and cheaply transfer tokens across chains.

How Hop makes money

Hop charges two types of fees: the AMM swap fee and the Bonder fee. The AMM swap fee is paid to users who provide passive liquidity. The swap fee is 0.04% for each conversion between an hToken and a native token. For rollup transfers, there are two conversions so the total fee is 0.08%, while transfers back to Ethereum mainnet only have one conversion. The Bonder fee is taken for fronting the liquidity of a user transfer at the destination chain and for taking on risk. This fee varies per asset and route based on the transaction volume.

How you make money on Hop

You can make money by depositing native assets into liquidity pools to earn AMM swap fees for every conversion with hTokens.

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Hop Pools
Hop ETH Bridging
14.1%
Yield
$12M
TVL
Risk
B
Protocol
Hop
Chain
Arbitrum
Hop USD Bridging
5%
Yield
$406K
TVL
Risk
C
Protocol
Hop
Chain
Optimism
Hop USD Bridging
7.8%
Yield
$196K
TVL
Risk
C
Protocol
Hop
Chain
Optimism

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