Next Steps: Migrating $HOPE’s Collateral from ETH to stETH

Hope.money ⚡️
3 min readAug 17, 2023

The past few weeks at Hope.money have been nothing short of exhilarating. We celebrated the successful launch of HopeLend on the Ethereum MainNet, after a Public Beta with a high level of participation. In tandem, we announced our partnership with Cobo, a custodian, marking a significant step in expanding $HOPE’s Distributed Reserve Network.

This collaboration also paves the way for exploring the integration of LSDs into the $HOPE Reserve Pool. After testing and collaboration with various stakeholders, we’re excited to unveil our strategic plan for the protocol-wide migration of $HOPE’s collateral from ETH to stETH.

Objective:

To recommend the migration of $HOPE’s collateral from ETH to stETH to enhance the stability, yield, and future-readiness of the $HOPE stablecoin.

Background:

$HOPE, the native distributed stablecoin of the HOPE Ecosystem, is currently backed by BTC and ETH, with these assets securely custodied in Coinbase Custody and Cobo. The overarching vision for $HOPE is to achieve global recognition and adoption as a true form of money.

Historically, money has undergone various transformations, but its foundational functions have remained unchanged: serving as a store of value, a unit of account, and a medium of exchange.

Hope.money has been rolling out its roadmap in alignment with this understanding:

  • HopeSwap was launched to reinforce $HOPE’s role as a medium of exchange;
  • HopeLend was introduced to create an interest rate market, enabling users to earn interest with their $HOPE, emphasizing its role as a store of value;
  • HopeConnect is at the center of the upcoming roadmap, extending $HOPE’s use cases to CeFi and TradFi;
  • Discussions are underway to expand $HOPE’s supply and liquidity across DeFi, CeFi, and TradFi platforms.

Challenges with the Current Model:

  1. Lack of native yield for minters: $HOPE’s staking yield is currently supported by $LT emission. This dependency restricts the diverse utilization of $LT for other strategic initiatives.
  2. Shifts in ETH dynamics: The ongoing transition to PoS and the Shanghai Upgrade indicate a potential decline in ETH’s dominance, which could complicate the sourcing of ETH for $HOPE minting.
Staked ETH on the rise

Proposed Solutions:

  1. Adopt stETH for native yield: Transitioning to stETH as collateral will enable $HOPE to generate a crypto-native yield, independent of $LT. This will also liberate $LT for other valuable endeavors, such as treasury swaps with future partners and airdrops.
  2. Stay ahead of ETH trends: By endorsing stETH as collateral, we can diversify our product’s appeal and cater to a broader audience, ensuring $HOPE’s relevance amidst evolving market dynamics.

What’s Next:

This move aims to adapt to the current crypto landscape and make $HOPE future-proof. By implementing these changes, we believe $HOPE will be better positioned to serve its community and achieve its vision of becoming a universally recognized and adopted form of money.

We invite feedback and discussions on this proposal to ensure the best path forward for the HOPE Ecosystem.

  • Your opinion matters. We have opened up a #steth-migration discussion channel within our Discord server to collect and answer any community feedback regarding this change.
  • The detailed migration implementation plan will be announced at a later date once we wrap up community discussions.

You can find out more background information regarding the migration in our previously released article.

--

--