๐ชHermes Protocol
Hermes
Last updated
Hermes
Last updated
Hermes is live at: https://hermes.maiadao.io Hermes docs are here: https://docs.maiadao.io/
Andre Cronjeโs Solidly aka ve(3,3) is an invention sacred to the Ancient God of Big Brains, made with the counsel of Gods of Ponzinomics and Game Theory.
A wandering Pepe joined in love with the beautiful nymph MAIA in a cave ridden by degeneracy, and she bore the God Hermes Protocol. This precocious baby was born at dawn. By midday he was boosting his Curve yields, and in the evening he forked Andreโs invention.
Hermes forks Andreโs invention. Very soon Hermes became intent on degenerate pursuits; He craved yields and devised a scheme for forking Andreโs Solidly.
Hermes Makes An Offering. At daybreak Hermes gave a part of him to the Defi world, to be claimed to those who reached out, so they can have a safe haven to farm their LPs. After spreading the word, he returned home to his mother Maia.
Hermes Reassures Maia. Hermes got into his cradle and acted like a helpless degen; but his mother Maia was not fooled by his display of helplessness and berated him, for she knew that he had been buying shitcoins. Hermes replied with clever words, assuring her that he was to be the prince of Defi and that he would win honor and riches for them both among the Defi gods. In fact his record was immaculate, all his shitcoins had mooned and he mined yEarn and received Uniswapโs airdrops!
This will be a lot to take in if you have not been familiarized with ve(3,3), please read it through, along with our bibliography regarding ve(3,3). Please take in account that this is at a highly experimental stage.
Hermes Protocol allows low cost, near 0 slippage trades on uncorrelated or tightly correlated assets. The protocol incentivizes fees instead of liquidity. Liquidity providers (LPs) are given incentives in the form of Hermes, the amount received is calculated as follows;
100% of weekly distribution weighted on votes from veHermes holders
The above is distributed to the gauges, however LPs will earn between 40% and 100% based on their own veHermes balance.
LPs with 0 veHermes balance, will earn a maximum of 40%.
0.01% fee
Natively supports swaps between uncorrelated assets
Natively supports swaps between closely correlated assets via a new curve (stable swaps)
Fees are paid out in base assets, not converted
Uniswap v2 compatible interfaces (allows support for all existing analytics tools and interfaces)
Permissionlessly create pools
Permissionless support for Gauges & Bribes
Emission incentivizes fees instead of liquidity
Native support for adding third party tokens and incentives
veHermes lockers accumulate all fees for pools they vote on
veHermes lockers balance increase proportional to emission, no dilution
veHermes lockers vote on emissions with circulating supply decay
veHermes natively supports delegation
veHermes locks are represented as non-fungible tokens to allow capital efficiency of locks, allowing locking periods from 1 week to 4 years
DAO, voting for sponsored pools whitelist
If all participants lock, emission decreases to 0, if only 50% of participants lock, emission is 50%, however lockers increase proportionally to emission.
Thus Hermes is ve(3,3)
Hermesโ AMMs are compatible with all the standard features as popularized by Uniswap V2, these include:
Lazy LP management
Fungible LP positions
Chained swaps to route between pairs
priceCumulativeLast that can be used as external TWAP
Flashloan proof TWAP
Direct LP rewards via skim
xy>=k
0 upkeep 30 minute TWAPs. This means no additional upkeep is required, you can quote directly from the pair.
Fee split. Fees do not auto accrue, this allows external protocols to be able to profit from the fee claim.
New curve: x3y+y3x, which allows efficient stable swaps.
Curve quoting: y = (sqrt((27 aยณ b xยฒ + 27 a bยณ xยฒ)ยฒ + 108 xยนยฒ) + 27 aยณ b xยฒ + 27 a bยณ xยฒ)^(1/3)/(3 2^(1/3) x) โ (2^(1/3) xยณ)/(sqrt((27 aยณ b xยฒ + 27 a bยณ xยฒ)ยฒ + 108 xยนยฒ) + 27 aยณ b xยฒ + 27 a bยณ xยฒ)^(1/3)
Routing through both stable and volatile pairs.
Flashloan proof reserve quoting.
Other protocols that are interested in Hermes Protocol, please feel free to reach out. With Hermes, you can add your new pair and own 100% of the fees of that LP, so it is perfect for projects of all sizes!
Airdrops
Multiple airdrops are to be dispersed throughout the community. All airdrops will come in the form of locked veHermes NFTs. Emissions will be managed by treasury until this distribution.
6%-MAIA Stakers Snapshot #1
Date: 02/04/2022
Distribution: 1,200,000 veHERMES
4%-MAIA Stakers Snapshot #2
Date: TBA
Distribution: 800,000 veHERMES
3%-Hermes LPs Snapshot #1
Date: 02/15/2022
Distribution: 600,000 veHERMES
2% -Hermes LPs Snapshot #2
Date: TBA
Distribution: 400,000 veHERMES
LP Values = Values will be allocated taking into account the size the pool and distributed between 3 tiers according to share of pool.
*Selected Pools = sAMM m.USDC/m.USDT, vAMM WMETIS/m.USDC and MIM pairs will come very soon. (more pairs will be added in the future)
The second round of snapshots will award both Maia stakers and all LP providers for the pairs selected for the Hermes distribution.
Initial Hermes Protocol state
We aim to achieve a fully decentralized and permissionless voting system to direct to gauges, in a way that matches LPs with demand.
In order to promote a healthy distribution of $HERMES tokens, in conjunction with the initial airdrops we have decided to adopt a Voting Power Mining model, rewarding liquidity providers of the AMM with voting power over HERMES emissions across a period of time.
In the future, we intend to pivot from this model of deepening liquidity, replacing it with a โโโโ style strategy of securing POL, we also have a set of partnerships in works to reach this goal.
Maia DAOโs Treasury will start with +90% of veHERMES NFT (will own 25% of the protocol in perpetuity) and HERMES will be distributed through emissions. Maia will vote for Selected Pools and for other ecosystem partnersโ pools.
Voting Power Mining Weekly Boosting Emissions:
20% Maia - MAIA and HERMES liquidity incentives. - Bribing collection strategies.
15% Hermes Mining - For Selected Pools.
Up to 65% Ecosystem Partners - Directed to ecosystem partners. - Unused votes will be used for Maia.
Selected Pools = sAMM m.USDC/m.USDT, vAMM WMETIS/m.USDC and more pairs with MIM to be announced. (regards to Relay Chain for bridging MIM!)
(more pairs to be added in the future)
vAMM MAIA/m.USDC 10,00%
vAMM MAIA/METIS 10,00%
vAMM HERMES/m.USDC 15,00%
vAMM HERMES/METIS 20,00%
vAMM METIS/m.USDC 7,50%
sAMM m.USDC/m.USDT 5,00%
vAMM METIS/m.USDT 4,25%
vAMM METIS/wETH 2,50%
vAMM wETH/m.USDC 2,25%
vAMM wETH/m.USDT 1,75%
VAMM wBTC/METIS 1,00%
sAMM BUSD/m.USDC 0,50%
vAMM wBTC/m.USDC 0,25%
StarsStream 5,00%
vAMM STARS/METIS 5%
Tethys Finance 5,00%
vAMM TETHYS/xTETHYS 5%
Relay 5,00%
sAMM MIM/USDC 2,5%
sAMM DAI/USDC 2,5%
0xNodes 5,00%
vAMM BIOS/METIS 5%
As a DAO we aim to bring forward the Metis ecosystem. To achieve this we pledge to allocate a portion of our HERMES emissions to incentivize pools that belong to:
Other Metis native projects.
New Metis projects.
Projects from different chains, helping create a friendly environment for other projects to expand to Metis.
Maia DAO has already reached out to a set of strategic partners (exciting news soon).
We are open to any project that reaches out to us, and welcome any interested to contact us through DM or visit our discordโs channel #๐ค-ecosystem-partners for open discussion.
Ecosystem Partners Emissions
In order to promote a healthy distribution of $HERMES tokens, we have decided to adopt a Voting Power Mining model, rewarding liquidity providers of the AMM with voting power over HERMES emissions across a period of time.
Throughout the course of the Voting Power mining Event up to 65% of weekly emissions will be allocated to Ecosystem Partners in order to give them voting power at a rate proportionally to the amount of liquidity they provide to our AMM.
Maia DAOโs Treasury will start with +90% of veHERMES NFT and distribute it gradually to protocols that decide to join the Metis ecosystem.
During this period, Maia will reserve up to 65% voting power for Ecosystem Partnersโ pools, while the other 15% go to stable pairs and pairs with Metis, and the rest to 20% to Maiaโs Bribing collection strategies and MAIA and HERMES liquidity incentives.
We will give only 1โ5% (depending on what week they join) to partners when they arrive to Metis and then HERMES will be distributed through emissions.
This way, those who are early can be rewarded fairly, while still providing a chance to those who come in later, as we must optimize for longevity and sustainability in order to be the best home for newly arrived liquidity here in Metis.
We compromise on voting for other pools from other protocols until they either have 5% of veHERMES initial distribution (1 000 000 $HERMES) or until 50% of HERMES initial Total Supply has been distributed (50 000 000 $HERMES). After that, we are no longer obliged to vote for ecosystem partnersโ pools.
We have a lot of stuff coming, but before getting down to business, we want to explain a few details about what to expect the coming weeks.
Additionally, it should be taken into account that each one of the following concepts are worthy of multiple medium articles, and we would like to thank everyone who contributed towards bringing them to life. As though we may be Maian Gods, but there have been Titans clearing the path long before.
If you are not familiar with Hermes, Solidly or ve(3,3). Please read our previous medium post or documentation on Hermes Protocol. https://docs.maiadao.xyz/hermes-protocol
This also applies to the other projects mentioned in this document, as it really is worth checking them out. All of them innovated and along with others they created the foundations of the DeFi Legos. We have links to each protocol at the end of this article.
A low-fee platform that contains Uniswapโs features, as well as, Curve Finance-style pools, with a mixture of Olympus DAOโs game theory applied to Curveโs tokenomics.
And in even shorter words by the creator of the ve(3,3) model, Andre Cronje:
โAllows low cost, near 0 slippage trades on uncorrelated or tightly correlated assets. The protocol incentivizes fees instead of liquidity.โ
It means that you can swap and route your swaps through low slippage stable pools and the AMMโs incentives are aligned with volume. Allowing you to acquire a given token even if it does not have a lot of liquidity with token you have, as long as there is a stable pair you can get routed through and avoid getting rekt by slippage.
The fee incentivisation is more capital efficient than its liquidity incentivisation counterpart, as it matches liquidity with volume.
Emissions will promote the highest fee earning pools, which will increase liquidity on those pools to allow for better rates. This aligns emissions with protocol incentives, allowing participants to self optimize the system.
This is also a real game changer. Please read this thread to get an overview of how this will improve DeFi in general. https://twitter.com/0xLightt/status/1492329686642446343
Maians will benefit directly from Hermes Protocol as the DAO will have perpetual collective ownership of 25% of the protocol. This will allow revenue generation of the Treasury via earning fees accrued from liquidity provision, as well as, bribe collection.
Our goal when coming to Metis has always been to help bring forward this space by creating a truly community owned ecosystem. This remains close to Maia, and Hermes is the current iteration of this mission. Logically, building a decentralized exchange complete with a voting and bribing system for emission allocation is fully in line with this.
The question that remains is, in fact, what kind of AMM are we building, and what came to your mind was probably stable swaps or ve tokenomics. We welcome everyone to join our platform as no other like it will be necessary in Metis Andromeda. In addition to what we spoke before, what Hermes Protocol brings:
Tech-wise it is beautiful. We cannot stress this enough. Nobody has even begun to scratch the surface of everything that it can bring in terms of modularity with other protocols and features.
Permissionless! There is no whitelist for swapping and liquidity providing. Everyone is free to add/remove liquidity and swap any pair.
Uniswap V2 compatible interfaces (allows support for all existing analytics tools and interfaces).
Bribes natively supported by the protocol.
Other protocols, even other AMMs, can use and/or transition to Hermes Protocol without loosing any fees and incentives! This happens because of:
Fee split. Fees do not auto accrue, this allows external protocols to be able to profit from the fee claim. New protocols can start and earn 100% of fees earned from that pool!
After a successful LBE, any new born project is yearning for a solid source of revenue. Hermes promotes precisely that feature, by allocating your tokens (i.e. project gov token) to bribe the allocation of veHermes to your pools gauge and/or add extra incentives for your liquidity providers using your tokens. Thus deepening liquidity and retaining the most from your LP position. In addition, Maia DAO will go the extra mile by beginning to promote Ecosystem Partners Incentives as part of the Voting Power Mining Event!
Truly making Hermes..
The Peopleโs Dex.โฆ A safe haven for users and creators
Please read the following to better understand how ve(3,3) works:
https://andrecronje.medium.com/
https://andrecronje.medium.com/ve-3-3-44466eaa088b
https://andrecronje.medium.com/ve-3-3-ouroboros-part-1-fee-distribution-5dcf131dc82e
https://andrecronje.medium.com/ve-3-3-ouroboros-part-2-fees-explored-c8e026841ae
