Hippo Finance is a unique DeFi project, building a community governed hedge fund to invest as a collective. The team identified a looming issue with many DeFi protocols: there is no incentive for users to stay long term. As a result, staking or farming tokens see immense sell pressure which collapses markets. Hippo Finance solves this problem through an innovative three token ecosystem to create a positive feedback loop. Furthermore, the community hedge fund element incentivizes token holders to participate in governance and stay for future investment returns.
Three Token Hippo Ecosystem
Hippo Finance follows a three token approach to avoid common yield farming problems such as hyperinflation or over emission. HIPPO is the protocol’s main governance token, with a fixed total supply of 163,737. All the tokens were distributed to the community through a fair launch. Initially, HIPPO tokens were earned by staking Uniswap LP tokens during the first phase of the project. As a result, there was no presale, pre-mine, or any tokens allocated to the development team. Furthermore, the protocol has already gone through a first security audit by Solidity Finance.
Great to see the code has already gone through audits prior to launch. With distribution finished, the platform is entering the second phase of its roadmap, which we describe in detail below.
Users can stake Hippo tokens in various pools to earn rewards in aHIPPO, note that the Uniswap pool has an x1.5 multiplier to bootstrap initial liquidity. When farming aHIPPO, 75% of the reward goes to the staker, 20% goes into the community hedge fund, and 5% to the project’s development fund.
Token holders participate in governance to decide the usage of the hedge fund. For transparency, all voting will happen on-chain by staking HIPPO. The team has put forth three options: burn the tokens, distribute among stakers, or invest in other DeFi projects.
aHIPPO is the ecosystem’s second token and main rewards token for farmers. For long term sustainability, aHIPPO does not have a maximum supply cap. Though remember it can be deflationary through governance vote to burn the hedge fund. The intention is for the the community to decide together and find the correct balance.
Angry Hippo token also has a liquidity mining program, to reward aHIPPO liquidity providers on Uniswap. Users can stake aHIPPO-ETH LP tokens to participate in farming dHIPPO tokens. Similar to staking HIPPO, farmers will earn 75% of the dHIPPO rewards, 20% goes into the community hedge fund, and 5% to the project’s development fund. However, note this process creates a second DeFi hedge fund for aHIPPO holders to govern.
The key difference is the voting parameters which are as follows: burn the tokens, distribute among stakers, or invest in non-erc20 projects developing on Polkadot.
dHIPPO has a fixed total supply of 3,500 – which could make the third token the most valuable by default due to increased scarcity. Users can also farm dHIPPO tokens by providing liquidity to an upcoming aHIPPO/HIPPO pool. As a result, the three token’s liquidity mining programs have been designed to compliment each other for growth.
Dark Hippo’s main use case is to enable cross-chain development with Polkadot to flourish. The team intends dHIPPO to establish partnerships that will allow Hippo Finance to scale onto new networks.
Exciting future: bridge to Polkadot
Another positive is the platform is not rushing its releases, Team Hippo continues to show they are committed to rigorous testing and security auditing. They have lined up a second audit by Ncyotee, who is a well-known security auditor in the space. Additionally, all of their code is available open-source via their Github account.
Excitingly the team is committed to bringing cross-chain innovations to life, specifically a bridge to Polkadot. Because of this, alongside its unique DeFi hedge fund use case, Hippo Finance is rapidly gaining traction in the industry.