The Hermes Tri-Token System

November 14, 2023

In conclusion

Guess who’s back, back again, Maia’s back, tell a friend.

I know I know, it’s been a while since we’ve given you an update on Maia DAO, but it’s for good reasons. The legends at Maia have been hard at work with their full migration to Arbitrum along with the plethora of updates set to come in the form of TALOS, Ulysses, and more.

https://www.youtube.com/watch?v=AJG-_YBFnU4

But we’re getting close and those who have been patient will soon reap the rewards.

Today, however, we’re taking a slight detour from all the technical updates we’ve been giving you. That’s because along with the product changes coming to Maia DAO, we also have some interesting new tokenomics being developed, specifically for Hermes, and I know how much you guys love some token talk. 

Enough chit-chat, let’s get into it. 

Old HERMES Tokenomics 

Initially, Hermes stuck to its Solidly fork routes and followed the same tokenomics as Solidly. HERMES holders could lock their HERMES for veHERMES for a defined period which entitled them to voting power and boosted rewards.

However, for people looking to maximize their rewards weekly, the re-locking process was a tedious task. Hence bHERMES was made using the ERC-4626 token standard. With this, HERMES holders would burn their HERMES for bHERMES and be entitled to maximum rewards and voting power in one go. No need to re-adjust and re-lock every week. 

While this worked well, it was not composable enough given that there were different types of participants with different goals and interests in Hermes. Therefore, this sleek tri-token system was built. 

New HERMES Tokenomics 

This new version involves 3 separate utility tokens to maximize efficiency. 

The process works like this: 

  1. Burn HERMES tokens to receive bHERMES
  2.    
  3. The bHERMES can then be used to claim up to 3 different utility tokens 
  4.    
  5. Once the utility tokens have been claimed the bHERMES becomes non-transferrable. Returning the utility tokens makes bHERMES transferable again 
  6.    
  7. The 3 available utility tokens are bH-V, bH-G, bH-B

So what’s the utility of these 3 utility tokens? 

bHERMES-Votes (bH-V) is used for governance. Holders of this token can vote on Hermes Improvement Proposals (HIPs). bH-V holders can also delegate their voting power to other wallets if they feel like doing so. 

bHERMES-Gauge (bH-G) allows holders to collect fees & bribes from the Hermes gauges. The gauges they vote on will see HERMES token emissions directed to the liquidity providers staked in those gauges, and just like bH-V, holders of bH-G can also delegate their voting power to other wallets. 

Lastly, we have bHERMES-Boost (bH-B). bH-B is for the liquidity providers who are staked in gauges. Holders of this can get boosted HERMES rewards depending on the amount they hold. The maximum boost possible is 2.5x and this is received if the liquidity provider holds the same percentage of bH-B as the gauges total liquidity. This, however, cannot be delegated, unlike the other two tokens. 

Although you can’t delegate bH-B, there is something else you can do. You can ‘lend’ your boosts via the boost factory, so someone without bH-B can still enjoy boosted rewards while paying a certain percentage fee from the boosted rewards they receive to the boost creator. 

While this entire thing may be confusing at first, it makes perfect sense. Hermes is a protocol that has many different types of participants all looking to gain different things from the protocol. So rather than having a blanket bHERMES token that encompasses all activities, it makes much more sense if users are allowed to choose where most of their bHERMES is allocated allowing for maximum composability.

As mentioned earlier, to get back your bHERMES, the user needs to relinquish or forfeit their utility tokens. But suppose you want to get back 100 bHERMES, you will need to relinquish 100 of each of the 3 utility tokens. 

This image sums up the new design pretty well

Concluding Thoughts 

As we’ve been saying for months on end, people are sleeping on Maia DAO. They had their spotlight moment after which many people seem to believe that they’re just like any other DeFi project, banished and forgotten.

All I can say is, fade Maia DAO at your peril. They are very close to completing their Arbitrum launch with which we’ll see many new products and features hit the markets. They are currently in a phase of rigorous auditing. Once that is done, Maia will rise to the heights it deserves to be at, and we will be right there, giving you all the updates and alpha along the way.

Keep your eyes peeled.

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