Jan 18, 2022
Hundred Finance Governance is Go!
Today marks a watershed moment for Hundred Finance. At 12:00 pm UTC, our first Snapshot governance vote will go live. More than a symbolic gesture, this vote seeks the approval of veHND holders on the whitelisting of an emerging player in the vote-escrow ecosystem: veToken Finance. Within this post we will give a brief explanation of what the veToken project is trying to achieve, before elaborating on the proposal itself and inviting our community to take part by voting to either approve or reject it.
veToken Finance
The veToken Finance project started in April of 2021 with the objective of assisting in the adoption of Curve’s vote-escrow system throughout the cryptocurrency space. Having observed during the past six months projects such as Yearn, REN and Keep3r carrying out votes seeking community approval on incorporating ve-token economics, they concluded the time was ripe for them to step in and fill the role of Convex in a multichain context.
Following much preparation, the project has now begun the process of integrating with protocols and preparing to launch their dashboard. The first project with which they sought to integrate, Pickle Finance, responded to a similar proposal and voted to approve. Broadening their scope further, veToken Finance now wishes to see themselves “whitelisted” on the HND token contract so that integration with our own project can take place. This is based on their team’s belief that Hundred Finance could well be the Compound Finance of EVM-compatible blockchains and scaling solutions.
Why the need to whitelist?
While standard yield protocols do not typically need to have permission to interact with other lending and farming protocols, to interact with veCRV-based gauge contracts, veToken Finance does need to be added to a whitelist before smart contract integration can take place. This whitelisting will not impact users who exclusively interact with the Hundred Finance platform, though it will allow those using veToken Finance to have a means of interacting with the protocol through using them as a third party.
Does the Hundred Finance Team endorse veToken Finance?
While the team is not opposed to whitelisting veToken Finance and, in fact, hopes this will be the first of many such integrations, as a team we are remaining neutral in the vote and do not specifically endorse the project. We have observed, however, that they have already carried out an audit of their smart contract codebase and are currently working on building out their dApp to allow production-level user interaction.
Hundred Improvement Proposal (HIP) 1
The following is a summary of the proposal:
veToken Finance integration will allow users to permanently lock HND for another token, called vetHND, at a 1:1 ratio. veToken Finance then uses its own governance token (VET) as an incentive to create liquidity between HND and vetHND, so that users can sell it on secondary markets as they please. The reason to enable this ability is that it provides a means of creating a liquid proxy version of veHND, while HND held by veToken Finance can be used to boost vaults that provide regular users with access to optimized APRs. In return for using its optimized vaults, the veToken protocol would take a performance fee from its users.
Proposed Benefits to Hundred Finance
The following is a paraphrased version of text within HIP-01:
“Hundred Finance’s Total Value Locked (TVL) will be increased since HND would have been permanently locked through veToken Finance. As the amount of HND on the market is reduced, each individual vault’s (hUSDC, hMIM, hFrax etc) APY could, in theory, increase due to greater scarcity of the HND token. Accordingly, more users could then supply their assets to vaults for lending, creating a feedback loop where more HND is permanently locked. This feedback loop would directly benefit the Hundred Finance veHND holders, as revenue increases and so too does the value of HND.”
VET Airdrop
In order to incentivize the integration, an airdrop to veHND holders is being proposed. The airdrop would amount to 0.6% of the total supply of the veToken (VET) token, vested 1 year after the product launch. The amount would be split along the lines of:
- 0.4% going to veHND holders who vote YES on the proposal based on snapshot of balances taken at approximately 9am UTC on January 17th, 2022
- 0.2% going to all veHND holders, regardless of whether they participate in the vote or not and based on a snapshot of balances taken after the vote has concluded
The VET token is to be the governance token of the veToken platform, with holders granted rights including the ability to vote on VET emissions and on integrating new projects that adopt voting escrow tokenomics, participate in the DAO governance of the integrated projects (such as voting to adjust gauge weights) and receive a share of platform revenue based on a staking system.
Further information on the platform and the VET token can be found within their documents.
Voting Options
The two options presented to veHND holders voting on HIP-1 are:
1 — YES, whitelist veToken
2 — NO, do not whitelist veToken
Voting Tutorial
Due to a current lack of the necessary support within Snapshot spaces for multichain strategies, the vote has been initiated four times in order to allow veHND holders on each of our current deployments to participate. Those who hold veHND on multiple chains will be able to vote on each, with the sum of all for votes then used to calculate the overall outcome. In order to successfully vote, please follow the following workflow.
Step 1
If you possessed veHND at the time the snapshot was taken (approximately 9am UTC on January 17th, 2022), open one or more of the following links indicating chains on which veHND has been deployed. If you had veHND on multiple chains, it may make sense to complete each vote before moving onto the next in order to minimize switching networks.
Step 2
Log in to your MetaMask wallet and select the appropriate network for the link selected in Step 1.
Step 3
Click on the “Connect wallet” button in the top right of the Snapshot UI and, if necessary, authorize the connection on MetaMask. The active wallet in MetaMask should be that on which you locked HND and thus have a veHND balance.
Step 4
Read the proposal and decide how you wish to vote.
Step 5
Select the appropriate option in the “Cast your vote” box and click “Vote”.
Step 6
You will then be presented with a “Confirm vote” box that will display your voting power. If this seems correct, proceed to again click “Vote” in order to trigger the signing of a message using MetaMask.
Step 7
MetaMask will ask you to then confirm the signing of the message, which does not cost anything, after which your vote will be in!
Step 8
If you hold veHND on other chains, it will now be necessary to repeat steps 2 to 7 in order to ensure that your full vote weight has been cast.
Thank you for participating in the first Hundred Finance governance vote!
Conclusion
The mission of the Hundred Finance Team is to move towards a thriving, multi-chain governance system that allows all veHND token holders to have their say and reap the benefits of the protocol. The launch of our first Hundred Improvement Proposal is thus a major step in this journey. As we expand to further chains, our governance will become progressively more decentralized, adding further transparency and greater opportunity for discourse on the important decisions that manage the protocol, product strategy and product features.
The governance channel created within the project Discord server is designed for in-depth discussions with proposers on governance-related topics. We invite all of our community to consider voting and putting their veHND to work in their own and the interests of the protocol as a whole.
