HOP Protocol allows users to transfer tokens quickly and easily. It works by bringing in market makers (called a Bonder) who provide liquidity to the destination network in exchange for a small fee.
Description of the HOP Protocol project
The Hop protocol provides a scalable token bridge to the ecosystem, using a two-way approach. Create a special intermediate asset, called hToken (e.g. hETH, hDAI, etc.), that can be moved quickly and cost-effectively from one network to another. Use automated market makers (AMM) to exchange between hTokens and their respective assets on each Layer 2 network. The end result allows users to seamlessly transfer tokens from one network to another.
Future innovations:
| 1. | Enable cross-network contract calls. |
| 2. | Improving the efficiency of capital investments and gas efficiency of the system. |
| 3. | Adding support for non-evm-compatible rollups. |
Polygon will maintain liquidity on the HOP through $MATIC liquidity mining. Hop integrates Polygon (PoS) as one of its supported networks. Hop prioritizes $MATIC support via the Plasma bridge and stimulates liquidity in Hop AMM at Polygon. The vision of the protocol - to bridge the fragmented layer 2 landscape and enable seamless asset transfer and linkability between DeFi applications on different networks.
As more chains (sidechains, Plasma chains and rollups) are developed with the Polygon SDK, Hop will also support those networks. Ultimately, Hop could be a key LEGO element in the Polygon ecosystem and help it to realize its grand vision.
Quick transfer of tokens
Withdrawals in USD by using Hop will take 4-5 minutes (instead of 7 days), and gas costs will be cents, since the costs are spread among many Hop users. In most cases, depending on liquidity, using a Hop bridge will not only be faster, but also cheaper. To top it off, the Polygon team is providing AMM Hop liquidity providers with $hMATIC - $MATIC a $400,000 $MATIC reward over the next year to help to attract and maintain high liquidity. In other words, liquidity providers will earn commissions for each MATIC USD transfer through Hop, as well as a reward for mining MATIC liquidity.