Hummus Exchange Friendly Fork Proposal
Dear Ballers,
We are excited to present our revamped proposal to deploy a Friendly Fork of the Balancer protocol on Metis Andromeda! The Hummus Exchange team aims to bring its proven stablepools and Balancer’s weighted pools together under one AMM; yet another first for Metis. Balancer is proven and trusted, and we, the Hummus team, are confident we can deliver.
Background
The Friendly Fork model was first introduced by @followthechain in October 2021 in order to find a mechanism to capture unmet demand for Balancer’s capabilities on other chains. The Friendly Fork model is also meant to properly align and balance the interests of BAL token holders and those of the forking team. This model has the added benefit of expanding Balancer’s mindshare.
Hummus Exchange endeavors to add to Balancer’s incredible success story with our ultra-low-slippage stableswap automated market maker (AMM) and ve-boosted staking mechanism in the growing Metis Andromeda Layer 2 (L2) ecosystem.
With the $400 million Metis Ecosystem Development Fund (Metis EDF), Sequencer Mining which just went live, and the Metis Liquid Staking Blitz (LSB) quickly arriving, as well as a host of new projects including Camelot fork Hercules, WAGMI, Redacted, and more, we expect Metis usage, building, and integration to increase significantly over the coming months. The Hummus Team is excited to bring Balancer’s composability and weighted pool mechanism to Metis, meanwhile returning value to the incredible Balancer community!
Introducing Hummus Exchange
Hummus Exchange is a proven decentralized AMM designed for exchanging tokens on the Metis Andromeda network. Users can swap stable or volatile assets on Hummus with low slippage and fees. They can also stake assets to generate yield, and stake HUM tokens alongside them to boost that yield.
Hummus gives users several advantages over traditional swap protocols:
- Ve-nomics, using HUM and veHUM, with time-locking optionality;
- Bribable voting gauges;
- Balancer-style weighted pools;
- Low slippage for traders;
- High capital efficiency; and
- Easy scalability of liquidity pools with new tokens.
The Evolution of Hummus Exchange
Since launching as Metis’ premier stableswap, the Hummus team has continued to evolve the protocol to best position in the Metis ecosystem and to reward its users.
Only four months after launching, we began sharing swap fees with liquidity providers. Around the same time, we integrated Chainlink price feeds on Metis Andromeda mainnet. That same month, Hummus was chosen by Metis Foundation to be the second recipient of the Metis Marathon builder incentive rewards program. We also reworked the veHUM UI to improve utility and community, lowered swap fees to promote balance across the stablecoins’ coverage ratios, introduced voting gauges and a bribing mechanism across our pools in big step towards decentralized governance, and launched the HUM time-lock feature to help new users catch up to early adopters, thereby improving the UX, protocol growth and governance.
Most recently, Hummus Exchange launched Balancer technology in July 2023 first with its tri pool, allowing users a diversified and secure environment for liquidity providers to earn rewards while staking DAI, USDC, or USDT. This pools has attracted over $1 million in TVL. Soon after, we launched a quad crypto volatile asset multipool containing wETH, wBTC, METIS, and m.USDC to create ample opportunities for trades, arbitrage, and liquidity mining across the Metis Ecosystem.
The Metis Andromeda Network
The Hummus team chose Metis to launch its DEX two years ago because of the network’s speed, security, efficiency, and the Metis team’s dedication to decentralization. Offering an ultra-low slippage stableswap mechanism and a dynamic staking rewards system with Metis proved to be a successful strategy.
Founded in November 2019, Metis is building the first-ever Hybrid Rollup, combining the scalability of Optimistic Rollups with the security and fast finality of Zero-Knowledge Rollups. By combining these two architectures, Metis will provide a secure, developer-friendly Layer 2 for Ethereum developers to deploy all types of decentralized applications.
The Metis Network is able to offer extremely fast transactions that take just a few seconds and cost just a few cents, while still maintaining the security of the Ethereum network. Optimistic rollup approaches result in somewhat long times required to confirm withdrawals back to Ethereum’s L1. Once the Metis network is fully deployed, withdrawal times back to Ethereum will be cut down to just a few hours and, eventually, minutes.
To further advance decentralization, Metis also offers data storage on-chain that is both decentralized and affordable. On top of the decentralized infrastructure, Metis is also well on its way on the roadmap towards full decentralization of governance.
Most recently, Metis announced it had begun to decentralize its sequencer, a first for a Layer 2 network and an essential step in securing the blockchain. The main weaknesses of centralized sequencers are their censorship risk, reordering risk, and liveness risk. A decentralized sequencer contributes to a more transparent and stable network, making it harder for malicious actors to compromise transaction censorship/reordering, and ensuring that network operations won’t ever go offline.
This innovation has attracted a host of new projects to Metis looking to build on the sequencer, such as Artemis, Enki, Vector Reserve, Ethena, Althea, and more.
Sequencer mining on Metis went live yesterday and will catalyze much activity and building on the network.
Metis users enjoy the utility of well-known dApps and integrations–such as Aave, Chainlink, Layer Zero, Redacted, DIA, Beefy, Synapse, Debank, WAGMI, and Celer–as well as Metis-native protocols such as Hercules, Hummus, Hermes, Tethys, Netswap, Revenant, and many others. One can find the most up-to-date list of leading protocols on the network on the Metis website.
Motivation for the Friendly Fork
Many DeFi users incorporate single-sided liquidity provision into their investment strategies, and some prefer it over multi-sided liquidity pools. Hummus aims to enable single-sided liquidity into weighted variable pools.
The Hummus Exchange team submits this proposal to become a Friendly Fork of Balancer to capitalize on several rare intersecting opportunities:
- A rapidly growing L2 ecosystem anticipating the full deployment of the first ever decentralized sequencer and its attendant largest borrowing and lending protocol in DeFi;
- A $400 million Ecosystem Development Fund bringing new projects and their capabilities onto the network;
- A strongly-backed L2 with a passionate team and decentralization at its core; and
- Growing trust in DeFi.
This Friendly Fork designation will benefit Metis users, Ballers, and the entire DeFi landscape by further promulgating Balancer’s technology. All controllable protocol parameters will be managed by a reputable multisig.
Terms of the Friendly Fork
Hummus Exchange will provide Balancer with 10% of the total supply of HUM tokens. Tokens will be provided to Balancer under the same conditions as those of the Hummus team in terms of vesting and release (see Tokenomics in this proposal).
Additionally, the Hummus team has observed that no other friendly forks have offered a fee share. In a gesture of solidarity and commitment, the Hummus team would like to offer a 25% share of fees generated by Hummus Exchange to BalancerDAO.
The tokens will be claimable using an address on Metis Andromeda determined by Balancer.
As part of the agreement, Hummus Exchange asks the following from Balancer:
- Managed Front End for Metis network in a similar fashion to Beethoven X on Optimism;
- Co-marketing;
- Tech support and alignment with new launches; and
- Identification of Hummus as an official friendly fork across social channels, websites, and elsewhere.
If needed and as appropriate, Hummus Exchange and BalancerDAO can establish a Memorandum of Understanding (MOU) if this proposal is accepted.
Hummus Tokenomics
HUM tokens have a fixed total supply of 300,000,000. Users can find a graphic of our tokenomics on our docs site.
Token allocation is distributed as follows:
Liquidity Incentives: 151,250,000 (50.42%)
Treasury: 60,000,000 (20%)
Private Sale: 18,750,000 (6.25%)
IDO: 2,500,000 (0.83%)
Team: 45,000,000 (15%)
Exchange Liquidity: 10,500,000 (3.50%)
Advisory: 6,000,000 (2%)
Metis Foundation: 6,000,000 (2%)
HUM token vesting periods began contemporaneously with the token generation event (TGE) and proceed as described below:
- Liquidity Incentives: Reserved for liquidity mining (Discretionary unlock depending on appropriate opportunities)
- Treasury: 5% at TGE, 6 Month Cliff, 36 Month Linear vesting
- IDO: 25% at TGE, 6 Month Linear Unlock
- Private Sale: 10% at TGE, 3 Month Cliff, 18 Month Linear vesting
- Team: 12 Month Cliff, 30 Month Linear Unlock
- Exchange Liquidity: 50% at TGE, 6 Month Cliff, 6 Month Linear Unlock
- Advisory: 12 Month Cliff, 30 Month Linear vesting
Note: Hummus set aside 10% of total HUM token supply for the Platypus Finance team since Hummus partially operates with a license from their team, although Hummus has since deprecated pools utilizing their code.
Hummus Token
Name: Hummus
Symbol: HUM
Decimals: 18
Total Supply: 300,000,000
Address: 0x4aAC94985cD83be30164DfE7e9AF7C054D7d2121
SWOT Analysis
Strengths
Hummus Exchange is a proven protocol and its team has shown vision, experience, and attentiveness by deploying various features before even its licensor did (gauges and locking). Hummus has a top tier Solidity dev who would love the opportunity to assist BalancerDAO team as much as possible, similar to how the Beethoven team does today.
Weaknesses
Hummus Exchange currently does not benefit from the trading volume on alternative (volatile) pairs. Balancer would strengthen the Hummus protocol and UX in this respect.
Bridges are typically weak points in DeFi environments. As an L2, Metis relies heavily upon users bridging assets to and from its network. The very recent technical review of Metis’ suitability for the AAVE’s deployment on the network included a look at the Metis bridge. This review gave the Metis bridge an “Optimal’’ rating and also noted that additional bridging options exist such as Celer, Synapse, and LayerZero. CEX users can also on- and offramp with Crypto.com and other CEXs.
Opportunities
The most recent (and by far the largest) ecosystem catalyst is the deployment of the Decentralized Sequencer, the first ever Ethereum rollup to do so. The Sequencer will greatly enhance network security, speed, and affordability while creating additional avenues for users to easily onboard to, participate in, and earn directly from the Metis Network. This, in addition to a concentrated and incentivized marketing and testing campaign, as well as builder initiatives, are expected to attract a massive amount of volume and liquidity into an already active Layer 2.
The deployment of Balancer on Metis at this time will not only benefit Metis users, Ballers, and Hummus Users, but the entire DeFi landscape.
Threats
Competition is always high in DeFi. Metis has several AMMs that offer variable assets.
Conclusion
We believe this is a great opportunity for the Balancer Community. Hummus’ Friendly Fork of Balancer on Metis Andromeda ultimately increases the number of Balancer users as well as the number of protocols building upon its technology. This project will also increase the number of developers working on the protocol, give precious feedback to the Balancer core team and ultimately, inspire us all to do better.
We hope this presentation gives you sufficient background for our project and our vision. We thank the entire Baller community in advance for its consideration of this proposal!
Sincerely,
The Great Hummus, on behalf of the Hummus Team