As yields and prices cool, dampening down dreams of another DeFi summer, the hope of a Layer 2 version of the season has emerged.
Pushing the dream forward is Hop Protocol, a project which allows users to “hop” across scaling solutions has launched on the Ethereum mainnet.
Hop, which works with protocols compatible with the Ethereum Virtual Machine (EVM), currently facilitates transfers of USDC across Polygon, xDAI, and Ethereum. Support for leading optimistic rollup providers, Optimism and Arbitrum, are coming soon, according to the launch post. DAI, USDT, ETH, WBTC and MATIC transfers are also coming soon.
Hop provides a bridge between EVM-compatible networks by creating an intermediary asset, called an hToken, for example hUSDC or hETH, and then uses automated market makers to swap the hToken with a network’s native asset, for example the version of USDC on Polygon.
Open Finance’s Utility
As DeFi protocols ship their apps to different scaling solutions — like Curve Finance’s deployment to zkSync and Synthetix’s deployment to Optimism — the ability for these projects to seamlessly integrate may be threatened. As the capacity for projects to build on top of and with one another is a core value proposition of the space, this fracturing of scaling solutions would hurt open finance’s utility.
Which is where Hop, and projects like it, comes in. As further proof of demand for interoperability between scaling solutions, Connext, which calls itself “the interoperability protocol of L2 Ethereum,” announced a $12M raise yesterday, led by 1kx and Consensys.