Hourglass Finance is a protocol that uses time-limited (LP tokens) to increase the long-term liquidity and stability of DeFi protocols. It consists of two parts: a platform that allows users to stake LP tokens in vaults of different maturities to obtain time-limited LP tokens, and a market that allows users to trade these tokens. Unlike the ve(3,3) mechanism, Hourglass Finance not only locks governance tokens, but also locks LP tokens, thereby reducing secondary pressure and providing a stable total locked value (TVL), which helps stabilize the coin price.

Time-limited tokens

In the Hourglass protocol, time-bound tokens refer to tokens that pledge assets for a certain period of time in DEFI protocols (such as Frax and Convex). They are issued based on the ERC-1155 standard and can be traded on the HourGlass market.

Submit/lock 10 frxETH/ETH LP tokens for 3 months and you will receive 10 frxETH/ETH TBT tokens for 3 months.

Hourglass

HourGlass Finance, a protocol that provides time-limited token (TBT) services, consists of two parts: a platform that allows users to stake their liquidity provider tokens (LP tokens) into different time-limited vaults to obtain corresponding time-limited LP tokens that reflect the user's staking duration and amount; and a market that allows users to exchange or sell their time-limited LP tokens between different trading pairs to increase their liquidity and returns.

Staking Platform

HourGlass provides different pledge vaults for different LP assets with different expiration dates. Currently, only the LP tokens of the frxETH/ETH pool in Curve are open for locking. Users who pledge LP to the vault will receive TBT tokens (based on ERC-1155) as receipts. By holding TBT, holders can obtain income through airdrops regularly (airdrops are proved and verified by Merkle trees). Once expired, TBT token holders can redeem LP tokens in mature vaults.

market place

HourGlass uses an order book model to match transactions, and the subject will have different discounts depending on the length of the expiration time as compensation for the opportunity cost of time. At the same time, the transaction situation on HourGlass can also be regarded as an indicator of the DEFI protocol. The demand for time-limited tokens can reflect the liquidity situation.

Generally speaking, if the demand for time-limited tokens is high, it means that liquidity is good, because users are willing to receive additional rewards and liquidity for long-term staking. If the demand for time-limited tokens is low, it means that liquidity is poor, because users are not willing to sacrifice flexibility and returns for long-term staking.

Governance

Currently, the HourGlass protocol does not charge any fees for the above functions, but this will be discussed in the DAO by the end of 2023.

  • HourGlass Finance has a module called HourGlass Governance for managing protocol parameters and functionality.

  • HourGlass Governance uses a token called pitchFXS as a governance token, which is a wrapped token of Frax’s FXS token.

  • Holders of pitchFXS tokens can participate in governance votes on the HourGlass protocol, as well as lock their tokens on the HourGlass platform to receive additional rewards.

background

Founder

Hourglass was founded by @Charlie_Pyle, also the founder of @zetablockchain, a blockchain based on Tendermint consensus and the Cosmos SDK.

investor

It has completed a $4 million seed round led by Electric Capital, with participation from other investors including Coinbase Ventures, Hack VC, Tribe Capital, and Circle.

Summarize

HourGlass is an innovative DEFI project that incentivizes users to lock their assets in other DEFI protocols for a long time by issuing time-limited tokens (TBT). In this way, these protocols can maintain a stable TVL and improve their security and sustainability. HourGlass also provides a market for these time-limited tokens, allowing users to trade their TBTs without unlocking their assets. HourGlass provides a complete infrastructure for time-limited tokens, making them liquid and composable.

Disclaimer: This article is for research reference only and does not constitute any investment advice or recommendation. The project mechanism introduced in this article only represents the author's personal views and has no interest in the author or this platform. Blockchain and digital currency investment has extremely high market risks, policy risks, technical risks and other uncertainties. The price of tokens in the secondary market fluctuates violently. Investors should make decisions prudently and bear investment risks independently. The author of this article or this platform is not responsible for any losses caused by investors using the information provided in this article.