In the current financial system, the central bank is the main institution that issues money and stabilizes its value. However, central bank operations are inevitably affected by political and economic factors, such as government intervention and inflation. These factors may lead to currency devaluation and market instability.
Decentralized stablecoins, an emerging form of cryptocurrency, attempt to address these issues through the use of blockchain technology and algorithms. Their value stability depends on maintaining a 1:1 anchor ratio with the asset behind it (e.g., the U.S. dollar, gold, etc.), and there is no central governing body to manipulate.
In addition, decentralized stablecoins are transparent and decentralized, which makes them a tool to avoid political and economic intervention. In some countries, governments restrict or regulate cryptocurrency trading in various ways, but decentralized stablecoins can bypass these restrictions.
However, decentralized stablecoins also face risks and challenges. Their stability may be compromised due to technical and market risks. In addition, due to the lack of regulation, decentralized stablecoins may be at risk of black market and illegal activity use.
Nevertheless, as decentralized stablecoins evolve and continue to improve, they will continue to play an important role and drive innovation in the financial sector.
HOPE: A Fully Evolving DeFi Application Ecosystem
The HOPE ecosystem is a fully evolved DeFi application ecosystem designed to provide frictionless and transparent financial infrastructure and services for all. It combines the features of traditional and centralized finance and creates an all-in-one ecosystem of pioneering decentralized financial applications.
The HOPE ecosystem includes several protocols, including HopeSwap, a marketplace for exchange rates, HopeLend, a marketplace for interest rates, and HopeConnect, an innovative DeFi brokerage protocol, all designed to provide users with a frictionless, easy-to-use DeFi user experience.
For example, HopeSwap is an exchange rate marketplace based on the swap between AMM's $HOPE, $LT and other assets, while HopeLend is an interest rate marketplace with multiple liquidity pools for non-custodial lending. assets on these platforms.
The native stablecoin of the HOPE ecosystem is $HOPE, a utility stablecoin designed to serve as a monetary tool for non-crypto natives to enjoy financial inclusion in a fully transparent and secure environment. $HOPE is backed by a distributed reserve of BTC and ETH, and has evolved into a distributed stablecoin through a multi-stage growth plan.
In addition to this, the HOPE ecosystem has introduced a utility token $LT (Light Token) to incentivize liquidity provision and governance participation within the HOPE ecosystem.
In the HOPE ecosystem, inflation is rewarded to users who provide liquidity. This reward mechanism is measured through Gauges, a smart contract in which users can place their LP tokens, and a weighted voting mechanism for Gauges that determines where the inflation of $LT should be directed.
The HOPE ecosystem also has LightDAO, a decentralized governance protocol that enables the community to manage agreements, rewards, and LightDAO community finances. participants in the HOPE ecosystem can be rewarded for providing liquidity, participating in governance, etc., and anyone can participate.
In addition, HOPE offers an innovative DeFi brokerage protocol, HopeEcho, that allows users to track synthetic assets at real-world asset prices.
Decentralized Stable Coin - $HOPE
The $HOPE token is a decentralized stablecoin based on the HOPE ecosystem, which is backed by a crypto-native guarantee of gold. It aims to provide the next generation of financial protocols that can be accessed by anyone with an internet connection and a crypto-native setup.
$HOPE is the base pricing token of the HOPE ecosystem and can be used to pay for transactions within the HOPE ecosystem.
To ensure the stability of $HOPE, HOPE Gömböc (reserve pool) is used to manage its reserves.
HOPE Gömböc is a distributed pool of reserves, initially consisting of BTC and ETH in a 1:10 ratio, which will be gradually converted into more stable and liquid assets to ensure the stability of $HOPE. HOPE Gömböc is deposited with a trusted third-party custodian and is governed by LightDAO. And to ensure transparency, the composition of HOPE Gömböc will be fully and publicly recorded on the chain.
Institutions can use both BTC and ETH to mint $HOPE to provide liquidity. A price discovery process will determine the ratio between $HOPE and BTC/ETH reserves, and once the ratio is determined, the public can purchase $HOPE. $HOPE will gradually reach a face value of $1, and a self-correcting pricing mechanism will provide liquidity from a dedicated market maker, and mint/destroy $HOPE on demand to maintain its peg.
The $HOPE token has multiple use cases, one of which is to obtain $stHOPE as proof of pledge by pledging $HOPE. Users holding $stHOPE can be incentivized to pledge by receiving a reward during the reward period. In addition, $HOPE can be used to pay transaction fees within the HOPE ecosystem.
Utility Token - $LT
The $LT token is a single utility token within the HOPE ecosystem, designed to provide support and incentives for all protocols and governance rights for LightDAO participants.
The total supply of $LT is close to 1 trillion tokens, with an initial supply of 400 billion tokens, or 40% of the total supply. Of this, 60% of the tokens will be progressively inflationary, with inflation decreasing at a rate of 2% per year.
The underlying value of $LT tokens is derived from HOPE Gömböc, where BTC and ETH reserves are used to support its value, and holders of $LT will gradually accumulate the appreciation gains from HOPE Gömböc. Thus, the $LT token is similar to a call option on BTC and ETH held in reserve in HOPE Gömböc.
Holders of $LT can acquire veLT by locking their positions in $LT. veLT holders can participate in governance voting, share in government fees, and increase rewards. veLT holders' voting rights and rewards are tied to the length and number of locked positions, with a minimum lock time of two weeks and a maximum lock time of four years.
Also, veLT holders can participate in governance through voting, such as deciding on the allocation of daily $LT inflation and various DAO proposals.
Liquidity providers holding veLT can increase their $LT reward by up to 2.5 times compared to those without veLT. Liquidity providers can earn $LT by participating in liquidity mining or by purchasing directly from HopeSwap.
In the first phase, HOPE will go live with HopeSwap and HopeLend to facilitate users to participate in Token swaps and lending. The revenue generated from trading and lending will be returned to HOPE holders. In this phase, HOPE is similar to the shark fin option structured product previously launched by PayPal Finance from a product perspective, as it is anchored to BTC and ETH. However, unlike before, HOPE is fully transparent on the chain and the assets are fully autonomous and controllable.
In the second phase, HOPE will begin bridging DeFi and CeFi, with the first product, HopeConnect, bridging DeFi and CEX, allowing users to trade derivatives on CEX through HopeConnect while remaining anonymous and non-custodial. The second product, HopeEcho, will support the creation of "eAssets" synthetic assets, including and not limited to traditional financial products such as stocks, commodities, and foreign exchange.
In the third phase, the maturity of HOPE, the HOPE ecosystem will become a one-stop hybrid financial platform where DID, DeFi Passports, ZK KYC, and on-chain reputation systems will all be integrated into the HOPE ecosystem.
As the HOPE ecosystem continues to evolve, we can expect more protocols and features to be rolled out to provide a more comprehensive and improved DeFi infrastructure and services. For example, with the launch of HopeConnect and HopeEcho, we can see that HOPE is bridging the gap between DeFi and CeFi and exploring more types of financial derivatives and synthetic assets, which will further expand the user base and market size of the HOPE ecosystem.
At the same time, HOPE is also working to strengthen its governance mechanisms by engaging the community to co-manage agreements and community finances. These efforts will make the HOPE ecosystem more sustainable and responsive to the needs of its users.
We can expect the HOPE ecosystem to be more successful and impactful in the future.