Token Description & Project Background

Hop is a multi-chain asset bridge that facilitates the instant transfer of digital assets between independent layer 2 solutions, sidechains and EVM compatible blockchain networks.

The project has a native token, HOP, used to confer voting rights within the protocol’s governance-controlling DAO.

Hop leverages a series of ‘bonders’ to instantly swap assets between scaling solutions. In exchange for a 0.02% tokenized fee, bonders front users with intermediary “h” tokens which are then immediately swapped for the canonical (native) asset on the destination chain via an automated market maker.

According to project documentation, Hop Protocol relies on a decentralized base of dispositors to provide the liquidity needed to instantly swap “h” assets for their canonical counterparts. Like other decentralized token pools, depositors receive a cut of its transaction fees to compensate for lost liquidity.

Hop Protocol was founded by Shane Fontaine, Miguel Mota and Christopher Whinfrey, who initially devised the project in March of 2021.

The project officially went live three months later on July 12, 2021.

Since launch, the protocol has integrated with Optimism and Polygon among other layer-2/sidechain solutions.

Per Whinfrey’s Medium page, both he and Fontaine had previously worked together on Authereum, a since discontinued Ethereum accessibility platform.

Hop’s native asset, HOP, was first distributed via an airdrop to eligible wallet addresses on June 9th, 2022. 

Risks of HOP

Like an investment in other crypto assets, there are some general risks to investing in HOP. These include:  (i) volatility risk and liquidity risk, (ii) short history risk, (iii) demand risk, (iv) forking risk, (v) code defects, (vi) regulatory risk, (vii) electronic trading risk, and (viii) cyber security risk. For additional information of these and other general risks associated with crypto assets and Uphold’s platform, please refer to the Risks Specific to Holding Digital Assets statement.

In addition to these general risks, an investment in HOP is subject to the following specific risks:

• The Ethereum bridge space faces intense competition. Any potential success associated with HOP depends on Hop Protocol’s continued rate of adoption.

We emphasize that this Crypto Asset Statement is not an exhaustive description or summary of all risks associated with HOP. Investors should conduct their own research and perform their own assessment before trading any crypto asset to determine the appropriate level of risk for their personal circumstances.

The HOP community and Hop DAO are not under any legal or regulatory obligation to disclose material information to the public regarding its activities. Holders of HOP have no recourse to the HOP community, Hop DAO, or Uphold if HOP declines in value for any reason.

Changes to applicable law may adversely affect the use, transfer, exchange, or value of any of your crypto assets, and such changes may be sudden and without notice.

Uphold’s Evaluation Process

Prior to listing HOP on the Uphold Platform, Uphold performed due diligence on HOP and determined that HOPis unlikely to be a security or derivative under relevant securities legislation. Uphold’s analysis including reviewing publicly available information on the following: 

• The creation, governance, usage, and design of HOP, including ensuring the source code is open-source, audited and peer reviewed, security, and roadmap for growth in the developer community. 
• The supply, demand, maturity, utility, and liquidity of HOP.
• Any marketing materials put forward by the HOP social team including on, Twitter, Medium blog, LinkedIn posts, Discord and Telegram channels.
• Material technical risks associated with HOP, including any code defects, security breaches and other threats concerning HOP and its supporting blockchain (such as the susceptibility to hacking and impact of forking), or the practices and protocols that apply to them.
• Legal and regulatory risks associated with HOP, including any pending, potential, or prior civil, regulatory, criminal, or enforcement action relating to the issuance, distribution, or use of HOP. 

General

Uphold has prepared this Crypto Asset Statement based on publicly available information. Although Uphold has taken steps to obtain information from apparently reliable sources, information contained in this Crypto Asset Statement may be inaccurate, incomplete or out-of-date. This overview is a starting point for you to perform your own research prior to investing in a crypto asset.

Uphold users should read the Risks Specific To Holding Digital Assets statement for additional discussion of general risks associated with crypto assets made available through the Uphold platform.  

Canadian residents, please note that Uphold has filed an application for registration in certain Canadian jurisdictions but has not yet obtained registration. Until such time as Uphold obtains registration, Uphold has agreed to abide by the terms of an undertaking available at the following link. Please also review the Uphold Canada – Crypto Risk Statement for additional discussion of general risks associated with the crypto assets made available through Uphold Platform. Please be aware that statutory rights of action for damages or rescission in section 130.1 of the Securities Act (Ontario) and, if applicable, similar statutory rights under securities legislation in the other provinces and territories of Canada do not apply in respect of this Crypto Asset Statement or other disclosures on the Uphold website and Risks Specific To Holding Digital Assets statement. 

Last updated on June 21, 2023.