Epoch 2 proposal: Exchange Certification Program

As mentioned in this topic, the Hummingbot Foundation believes that a process to distinguish exchange connectors from one another would benefit the community as a whole.

The Hummingbot codebase now contains connectors to over 40 different centralized exchange (CEX) connectors and decentralized exchange (DEX) connectors, with many more requested by the community.

Maintaining these exchanges requires a lot of engineering, QA and support effort. While the community maintainer model has helped to keep certain exchange connectors up to date from an engineering standpoint, service level by maintainers has been inconsistent, and it does not take into account the holistic efforts undertaken by community managers, QA, and support team.

Without a process that allows the Foundation to prioritize scarce engineering, QA, and support bandwidth on a subset of the exchanges in the codebase, overall quality will slip, hurting the community as a whole.

While the original idea discussed the concept of “maintenance staking” with HBOT tokens, the Foundation now believes that a simpler model that leverages the existing exchange fee share agreements and HBOT voting process would be a more ideal starting point. In addition, the program discussed below aligns well with the Epoch 2 governance changes proposal.

Below, we lay out the draft proposal and invite the community to provide feedback and ask questions. Afterwards, we intend to submit the proposal as a HGP prior to the inception of Epoch 2 in August 2022.

Summary

The Exchange Certification Program is a community-driven process that selects certain exchanges in the Hummingbot codebase to be certified. Certified exchanges are clearly differentiated from non-certified exchanges in the Hummingbot client and documentation. The Hummingbot Foundation will focus its scarce engineering, QA, and support bandwidth/resources on certified exchanges and their connnectors.

Certification Benefits

Documentation

  • Certified exchanges are featured in the Hummingbot Github code repository, DockerHub image repository, and documentation.

  • Certified exchanges are featured within the Hummingbot client software, i.e. connect, help commands.

  • The Foundation will create and maintain dedicated landing pages and API integration guides for certified exchanges in the Hummingbot website

  • Foundation-created blog posts, YouTube videos, and other content will feature trading strategies on certified exchanges

Engineering

  • Only bugs related to certified exchanges will be included in the Bug assessment, review and bug bounty process (see Bugs process in the Miro whiteboard)

  • Only proposed enhancements, fixes, and connector upgrades related to certified exchanges will go through the HIP process and be eligible for Foundation bounties (see Improvements process in the Miro whiteboard). Non-certified exchanges remain eligible for Community-funded bounties.

  • Pull requests related to certified exchanges will be prioritized by Review DAO (see Pull Requests Process in the Miro whiteboard).

Support & QA

  • Foundation community managers and engineers will only prioritize supporting users who need help trading or developing on certified exchanges

  • Foundation QA will perform pro-active QA on certified exchange connector and perform in-depth testing on pull requests related to certified exchanges. QA will only perform basic testing (is PR mergable? is test coverage sufficient?) on pull requests related to non-certified exchanges.

Partnership

  • The Foundation will only partner with certified exchanges to promote trading competitions, referral programs, hackathons, developer bootcamps, and other mutually beneficial partnerships to the Hummingbot community.

Certification Requirements

Any exchange with a connector in the master branch of the Hummingbot codebase, both centralized or decentralized, is eligible for certification, as long as it meets the qualification requirements below.

  • To be eligible for certification, an exchange must have an active fee share agreement or broker program partnership with Hummingbot Foundation.

  • In addition, an exchange must have a process to track and report fees shared to the Hummingbot Foundation on a regular basis, at a minimum every month.

  • If the above qualifications are met, an exchange is eligible for certification, which is decided by HBOT voting.

Certification Process

  • At the beginning of each epoch, the Foundation will organize a HGP that allows HBOT holders to vote to select which qualified exchanges should be certified for the upcoming Epoch. To assist HBOT holders in making this determination, the Foundation will provide information for each qualified exchange:

    • Partnership information, such as percentage of fees shared, eligibility criteria, and benefits to users
    • Historical fee volume shared with the Foundation
    • Historical trading volume reported to the Foundation
  • During the Epoch, any HBOT holder may submit an HGP to add or remove an exchange as Certified. If the proposal is approved, the Foundation will make the corresponding adjustments with the following two monthly releases.

Reporting

Each month, the Foundation will include in its monthly reporting for each certified exchange:

  • Fee volume shared with the Foundation
  • Trading volume reported to the Foundation
2 Likes

Following up on the proposal above, Hummingbot Foundation will create a Hummingbot Governance Proposal (HGP) on Wed Aug 3 that proposes to initiate the program and allows HBOT holders to select which exchanges will be certified during Epoch 2.

Like other HGPs, voting will be open for 7 days. Afterwards, the Foundation will make the appropriate changes to the Hummingbot client and docs for the August v1.7 release and begin working more closely with the certified exchanges. Afterwards, anyone from the community, including new exchange partners, may create HGPs to add or remove exchanges from certifed list.

Eligible exchanges for certification are those which have currently active fee share partnerships with Hummingbot Foundation. See below for the list of exchanges and information about their fee share partnerships with the Foundation:

Exchange Partnership Start Date 2022 Fees Received by Foundation (thru July 31) Need Referral Link?* Rebate % to Foundation Rebate % to Users Reporting Frequency Report Information
AscendEX Jan 2022 $38,581 No 40% 0% TBD TBD
Binance Jan 2022 $48,853 Yes Spot: 45%, Futures: 30% 0% Weekly Users, fees, volume
ByBit July 2022 $0 No 45% 0% TBD TBD
FTX July 2022 $0 No 25% 5% TBD TBD
Gate[dot]io Jan 2022 $37,325 No 30% 10% TBD TBD
HitBTC Jan 2022 $1,981 No 40% 0% Weekly Fees
Huobi Jan 2022 $2,191 No Spot: 50%, Futures: 60% 0% Daily TBD
KuCoin Jan 2022 $190,342 No 50% 0% Monthly Users, fees, volume
OKX Jan 2022 $3,071 No 30% 10% Daily Users, fees, volume

If Need Referral Link is Yes, users need to create a new account using the referral link in order for Hummingbot Foundation and them to get fee rebates.

Rebate % to Users: Some exchanges provide a fee rebate to users who sign up with the Hummingbot referral link. Other exchanges allow us to share a portion of the fee share with users in the broker dashboard, and in this cases, the Foundation shares up to 10% fees with users.

1 Like

This program is excellent in many levels and ways!

Kudos for really being transparent on how things work, especially sharing about financial aspect on exchange fee shares.

This made me clearly see how Hummingbot will sustain its operation as an open source project.

Some clarificatory questions:

  1. How many exchanges maximum that can be certified at a time? For effective service bandwidth balance.

  2. Will there be some guidelines as to when is it valid to propose for removal of a certified exchange? We have witnessed users who reacted quite absurdly on temporary outages, or we may want to prevent submission based on rumor.

  3. Will it be better to set a certain minimum monthly fee share received threshold in determining exchange eligibility for certification? In the list, there are top exchanges that have not yet given or only relatively small fee shares. So, these top exchanges will actually need to queue for few months to build up their eligibility.

Great questions - this program is preliminary so how it works should be up to the community. Here are my recommendations

How many exchanges maximum that can be certified at a time?

I don’t think the Foundation should set a maximum since the more fees it collects, the resources it can apply, so it can support more exchanges. Since there is currently no differentiation between exchanges in the codebase, the Foundation is effectively supporting all 30+ exchange connectors equally, so focusing our efforts on a subset, even if it’s all 8 exchanges, would be an improvement over how it works now.

Will there be some guidelines as to when is it valid to propose for removal of a certified exchange?

The proposal mentions that HBOT holders can vote to add or remove a certified exchange. I think if this has to be an HGP, it should prevent hasty decisions to add/remove certified exchanges since HGP have higher quorum and proposal requirements.

Will it be better to set a certain minimum monthly fee share received threshold in determining exchange eligibility for certification?

That’s an interesting idea that could make the process more efficient. However, there is a chicken-and-egg problem here, since new exchanges may not have the volume yet to justify certification, but getting certified and allowing their connector to be improved and grows their appeal to the community would boost their volumes.

So I think there should be a pathway for new exchanges to attain certification without high volumes, or perhaps provide benefits to Hummingbot users or pay fees to attain certification on a trial basis.

1 Like

The first Exchange Certification election has concluded, and all 8 eligible exchanges have been approved by the community to be certified for Epoch 2:

  • Binance
  • Kucoin
  • AscendEx
  • Gate[dot]io
  • FTX
  • ByBit
  • OKX
  • HitBTC
  • Huobi

This marks a significant change in the way that Hummingbot Foundation operates. Starting with the August v1.7 release, Hummingbot Foundation will certify these connectors by:

  • Ensuring that these exchange connectors are bug-free and updated via Foundation-sponsored bounties;
  • Working with each exchange to promote and expand use of their connectors to the Hummingbot community;
  • Differentiating the certified exchanges from the non-certified exchanges in the Hummingbot Github, documentation, and website.

This will end the existing community exchange maintenance process, as bounties for certified connectors will replace the existing community maintainer program. In addition, the Foundation will no longer assess exchange connectors RED/YELLOW/GREEN.

In addition, we will publish documentation that explains how certified exchanges are handled differently from non-certified exchanges (QA process for certified exchanges - #4 by cgambit) as well as new exchanges can attain certification.

1 Like

Thank you everyone for your hard work!

Do we have any plans to ask the certified exchanges to list HBOT?

It will ensure liquidity for investors to accumulate more HBOT without worrying of front-running bots

Great question. The Foundation hasn’t started any conversations with exchanges about listing the HBOT token, and we are discussing with our lawyers when that time is appropriate.

Awesome, take your time and there is no pressure!