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 Expenses Methodology

## 1. Overview

Hop Protocol expenses represent the total USD value of token incentives distributed to users as rewards for participating in the protocol's bridging activities. These token incentives are considered operating expenses from the protocol's perspective, as they represent costs incurred to incentivize user participation and liquidity provision. The metric aggregates reward distributions across multiple chains and token types, converting all amounts to USD for consistent measurement.

## 2. Data sources

The expenses calculation relies on several key data sources:

- **Staking reward events**: Parsed `RewardPaid` events from Hop Protocol's StakingRewards contracts deployed across Arbitrum, Polygon, Gnosis, and Optimism chains
- **Multi-token rewards**: Events from specialized staking contracts including `StakingRewardsGNO` on Gnosis and `StakingRewardsOP` on Optimism
- **End-of-day price feeds**: Token price data for HOP, GNO, and OP tokens used for USD conversion
- **Token metadata**: Decimal precision information for accurate token amount calculations
- **Transaction data**: Block timestamps and transaction hashes for temporal aggregation and deduplication

## 3. Step-by-step calculation

### Component A: Reward event extraction
- **Purpose**: Extracts all token reward distribution events from Hop Protocol's staking contracts across multiple chains
- **Logic**: Identifies and parses `RewardPaid` events from six different staking contract configurations across four chains. Each event captures when a user claims rewards, including the recipient address (`address`), reward amount (`reward`), transaction hash, and block timestamp. The system tracks multiple reward token types: HOP tokens on Arbitrum, Polygon, Gnosis, and Optimism; GNO tokens on Gnosis; and OP tokens on Optimism. For each reward event, the system maps the token address to its native chain for price lookup while preserving the actual distribution chain information
- **Key fields**: `address` (recipient), `reward` (raw token amount), `block_timestamp`, `transaction_hash`, `log_index` for deduplication, and derived fields for `token_symbol`, `token_address`, and chain mapping

### Component B: Token incentives standardization  
- **Purpose**: Converts raw reward amounts into standardized USD values with proper business classification
- **Logic**: Takes the extracted reward events and applies decimal correction based on each token's precision (typically 18 decimals for ERC-20 tokens). Converts corrected amounts to USD using end-of-day price feeds matched by token address and timestamp. Aggregates rewards daily by truncating block timestamps to day boundaries. Applies consistent business classification, categorizing all rewards under the 'Bridging' business line with 'bridges' market sector and 'mint_and_burn' business segment. Maps the token's native chain (used for price lookup) back to the true distribution chain for final reporting
- **Key fields**: `token_incentives` (USD amount), `timestamp` (daily), `chain_id` (distribution chain), `token_symbol`, `token_address`

### Final aggregation
- **Combining components**: The expenses metric directly uses the standardized token incentives from Component B, treating them as operating expenses since they represent costs incurred by the protocol to incentivize users
- **Currency conversion**: All reward amounts are converted to USD using end-of-day price feeds for HOP, GNO, and OP tokens, with decimal correction applied based on token metadata
- **Time aggregation**: Rewards are aggregated at daily boundaries by truncating block timestamps to day level and summing all reward distributions within each day and chain
- **Final calculation**: The final expenses value equals the sum of all daily token incentive distributions in USD, representing the protocol's total spending on user rewards for each day and chain combination

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

Total project operating and incentive expenses.

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Expenses

Expenses

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