Hop allows users to send tokens from one rollup to another almost immediately without having to wait for the rollup’s challenge period. Liquidity providers deposit funds into Hop AMM pools and receive trading fees from traders (supply-side fees).

Hop is a scalable rollup-to-rollup general token bridge. Hop was co-founded by Christopher Whinfrey and launched in 2021.

HOP tokenholders own and govern the protocol. They currently take a cut of the total transfer fees paid by users (revenue). Hop’s investors include 1confirmation, Infinite Capital, etc.

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Hop Protocol

# Hop Protocol Earnings Methodology

## 1. Overview

Hop earnings represents the protocol's net profit calculated by subtracting token incentive expenses from bridge fee revenue. This metric measures Hop's financial performance as a cross-chain bridge protocol, answering the business question: "How much profit does Hop generate after accounting for token rewards paid to users?" The calculation follows the standard accounting formula: Earnings = Revenue - Expenses, where revenue comes from bonder fees collected on cross-chain transfers and expenses represent token rewards distributed through staking contracts.

## 2. Data sources

The methodology relies on the following raw blockchain data sources:

- **Bridge contract events**: Parsed `TransferSentToL2` events from Hop L1 bridge contracts on Ethereum, and `TransferSent` events from Hop L2 bridge contracts on Arbitrum, Optimism, Polygon, Base, and Gnosis
- **Staking rewards events**: Parsed `StakingRewards_RewardPaid` events from Hop staking contracts across Arbitrum, Polygon, Gnosis, and Optimism, plus specialized reward events like `StakingRewardsGNO_RewardPaid` and `StakingRewardsOP_RewardPaid`
- **External price data**: End-of-day token price feeds for USD conversion of multiple tokens including ETH, USDC, DAI, USDT, WBTC, HOP, MATIC, GNO, OP, MAGIC, RETH, SNX, and SUSD
- **Token metadata**: Token decimal precision data and symbol mappings for proper amount calculations

## 3. Step-by-step calculation

### Component A: Revenue calculation
- **Purpose**: Calculate total daily revenue from bridge transfer fees
- **Logic**: Extract bonder fees from bridge transfer events across all supported chains. The system processes both L1-to-L2 transfers from Ethereum and L2-to-L2 transfers from layer 2 chains. Only L2 transfer events contain bonder fees (tracked in the `bonderFee` field), while L1 transfers have zero bonder fees since users don't pay fees when initiating transfers from Ethereum. Each transfer event includes the `amount` being transferred, `recipient` address, target `chainId`, and `bonderFee` amount. The data spans multiple supported tokens including USDC, ETH, DAI, USDT, WBTC, HOP, MATIC, GNO, OP, MAGIC, RETH, SNX, and SUSD across different chains
- **Key fields**: `bonderFee` amounts are extracted as revenue, `blockTimestamp` for daily aggregation, `originChain` for chain attribution, `tokenAddress` for price conversion, and `tokenSymbol` for identification

### Component B: Expenses calculation  
- **Purpose**: Calculate total daily expenses from token incentive distributions
- **Logic**: Extract reward payment amounts from staking rewards contracts deployed across multiple chains. The system processes `RewardPaid` events from various StakingRewards contracts, capturing both HOP token rewards and native chain token rewards. HOP tokens are distributed on Arbitrum, Polygon, Gnosis, and Optimism, while additional native tokens include GNO rewards on Gnosis and OP rewards on Optimism. Each reward event contains the `reward` amount paid to a specific user address. The token address chain is used for price conversion (ethereum chain for HOP and GNO tokens, optimism chain for OP tokens), while the true chain represents where the reward was actually distributed
- **Key fields**: `reward` amounts represent the expense value, `blockTimestamp` for temporal alignment, `tokenSymbol` for token identification, `tokenAddress` for price lookups, and `trueChain` for proper chain attribution

### Final aggregation
- **Combining components**: Revenue and expenses are calculated independently by chain and date, then combined using a subtraction operation where daily expenses are subtracted from daily revenue for each chain and product combination
- **Currency conversion**: All token amounts are converted to USD using end-of-day price feeds. Token decimals are corrected based on standard ERC-20 decimal values before price conversion to ensure accurate USD calculations
- **Time aggregation**: Both revenue and expenses are aggregated to daily boundaries using timestamp truncation to day level, ensuring alignment between revenue and expense calculations
- **Final calculation**: The earnings value equals daily revenue minus daily expenses for each chain. Missing days are filled with zeros to maintain complete time series data. The result includes protocol metadata such as business line classification and market sector identification

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Net profit (also profits, net income, profitability) — revenue remaining after subtracting expenses.

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