Thread by @litocoen

i see many people referring to @HopProtocol as the best option to *deposit* tokens from L1 to @optimismPBC

while it can happen (often) that Hop is cheaper for L1 -> L2 deposits, it's not it's strong point

it's main USP is direct L2 <> L2 transfers and fast exits from L2 -> L1

https://twitter.com/pythianism/status/1437982949811441667

this being said it can often happen that even L1 -> L2 deposits are cheaper using Hop

for example, right now there is positive slippage if you send which on this $10,000 $USDC transfer gives you a $10 premium

the suggested gas fee on @MetaMask is $36

total cost: $26

now on gateway.optimism.io there is no market maker fees whatsoever

the gas fees = total cost

total cost: $32.49

so in normal circumstances the optimism bridge is a tiny bit cheaper gas-wise because there is less computation involved

the reason why is that a hop transfer involves an additional swap at the destination from $hUSDC to native optimism $USDC

but since there is often positive slippage it will often be the case that hop is still cheaper despite higher gas cost

now why is there positive slippage?👇

to understand let's revisit how a transfer works

1. Bonder looks at transfer on origin chain and decides to bond it at destination chain by minting hTokens (here $hUSDC)

2. Bonder locks up collateral

3. $hUSDC gets converted into $USDC in AMM

https://twitter.com/litocoen/status/1401913904998105092?s=20

the reverse happens during a withdrawal

during a withdrawal from Optimism to L1 👇

1. user's $USDC is converted into $hUSDC in the AMM

2. $hUSDC is burned on optimism

3. $USDC is released on L1 from Hop bridge contract

long story short if there is an imbalance of withdrawals vs. deposits then $hUSDC will trade at a slight premium bc more $hUSDC is bought then sold

so if you come and make a deposit from L1, you're effectively arbing the pool: minting $hUSDC and selling it for $USDC

conclusion: you can arb the pool by depositing 🚀

at some point we'll launch a bot to let people know of these opportunities/cheap deposit windows