Thread by @ivailoj

I love random coincidences, I had been excited to see @HopProtocol come together, which is why I thought was awesome that I completely randomly ended up sitting next to @WhinfreyChris at a dinner on my last nigh at #EthCC.

What is Hop 👇 (hope I've understood it all correctly)

1/ For a while, been saying that L2s are great, but regular users aren't going to use them until we enable smooth movements of assets. Currently L2s create fragmented environments and bridging assets is slow and expensive, which makes them only useful to a limited audience...

2/ This is why I was excited to find out about @HopProtocol, which aims to enable users to move assets from rollup to rollup in a cost effective way, providing cross rollup composability.

3/ Hot creates cross-network bridge tokens - hTokens (hDAI, hETH), representing deposits in the L1 contract. hTokens can be moved btw L2s/claimed on L1 for the underlying. When an hToken is transferred L2 to L2, it's burned on the original rollup & minted on the destination.

4/ This is immediate as a Bonder fronts the liquidity on the destination chain (for a fee).
Each hToken is worth exactly 1 of it's L1 counterpart since it can be redeemed at any time.

5/ So hTokens are burned at source and minted at destination, but since we don't want the hTokens, but rather the canonical counterparts, the protocol has adopted an AMM, offering liquidity between each hToken and the corresponding canonical token.

6/ Since this is a regular AMM, arbers can take advantage of the price fluctuations and rebalance the liquidity pools across the rollups.

7/ Liquidity providers supply liquidity into the AMMs for the hToken:Canonical counterpart for a 0.3% fee. As the value is the same, risk of IL is minimal under normal network conditions. Am assuming that at some point there may be a token & possible retrospective rewards(?)

8/ Looking forward to seeing how @HopProtocol develops going forward as I think it can be transformative for the wider adoption of L2s