HGP-16 [LD] Bridge HBOT tokens to Avalanche C-Chain with nomad.xyz

Author: carlolm 0x801

Original Post Date: 17 May 2022

Snapshot Proposal Link

Category

Liquidity Distribution

Summary

Proposal to bridge HBOT tokens to Avalanche C-Chain using Nomad Protocol.

Details

Motivation

The Hummingbot Governance Tokens (HBOT) are ERC20 tokens on the Ethereum blockchain limited for use on Ethereum only. Rising and volatile gas costs on the Ethereum blockchain is a major source of inefficiency, making even the most basic of operations (such as a simple transfer of tokens) at times cost-prohibitive.

Bridging to other chains would enable access to lower-cost transactions, including the potential to create more efficient and active liquidity pools that can help facilitate the dissemination, distribution, and transaction of HBOT tokens between community members and the broader crypto market.

For example, one specific use case for CoinAlpha is the distribution of HBOT tokens through its Hummingbot Miner platform. CoinAlpha would plan to add support for Avalanche-HBOT for payouts to allow for more efficient and lower-cost distribution of HBOT tokens to Hummingbot Miners.

Overview of Nomad Protocol

Nomad is a security-first, cross-chain interoperability protocol, offering a bridge solution that aims to reduce gas costs by 90% as compared to a traditional header relay by using optimistic systems (optimistic roll-ups). Nomad features an optimistic mechanism, public verification, low gas fees, and broad participation.

Background reading / additional resources:

Proposed Changes

  • Utilize the Nomad Protocol to create a bridge and generate a new HBOT token representation on Avalanche’s C-Chain, enabling HBOT tokens to be bridged between Ethereum and Avalanche C-Chain
  • Add official support from the Hummingbot Foundation for the Nomad bridge and the Avalanche C-Chain version of the HBOT token, including related official documentation hummingbot.org
  • Include the Avalanche C-Chain version of HBOT tokens for snapshot governance voting
  • Hummingbot Foundation will bridge 10 million HBOT tokens from Ethereum to Avalanche to initiate the bridge and create the new Avalanche HBOT token contract. The 10 million tokens will stay in control of the Hummingbot Foundation and will be used for future rewards distributions and/or Liquidity Increase, to be decided as per usual governance processes
  • Creation of a Hummingbot Foundation multisig Gnosis SAFE on Avalanche to store the bridged tokens

Author: fengtality 0x352

I will vote in favor of this proposal. Gas fees on Ethereum makes airdropping HBOT tokens to Hummingbot developers and users inefficient, so having another EVM chain where this can be done easily will help grow the ecosystem.

In addition, since Avalanche is supported by Hummingbot Gateway and users can earn Miner rewards on TraderJoe and Pangolin soon, the community will also have an opportunity to use Hummingbot on Avalanche.