Summary
The HOPR Association invites the Aragon DAO to invest $300,000 USDC to fund the development of RPCh, the first fully private and decentralized RPC service. RPCh runs on top of the HOPR mixnet, a layer-0 privacy protocol which hides the data and metadata associated with any digital interaction.
In addition to plugging privacy issues which currently undermine all of web3, RPCh provides Aragon-specific use cases by preventing the exposure of voting metadata, including IP addresses and time stamps. This feature request was put directly to us by the Aragon Association.
In exchange for this investment, Aragon DAO would receive:
- $200,000 in HOPR tokens from the HOPR Association Treasury
- $200,000 of equity in RPCh (via HOPR RiSe AG, see below)
- Free RPCh usage for three months after launch for anyone holding >5,000 ANT
Aragon DAO would be joining HOPR’s own Community Trust and other web3 investors in a first of its kind hybrid investment for DAOs.
About HOPR and RPCh
HOPR is a layer-0 privacy protocol which uses a fully incentivized mixnet to obscure the data and metadata of any data transfer. It is developed and funded by the HOPR Association, a Swiss-registered Association (ZefixWebApp). The HOPR mixnet is currently live with >300 running nodes (https://network.hoprnet.org).
RPCh is a service on top of HOPR which provides the first ever private RPC service, allowing RPC calls without exposing any metadata, including IP address. RPCh is currently in pre-launch alpha, operating as a free service. RPCh has commitments to integrate directly into wallets and RPC providers once the paid service launches.
RPCh recently received investment from the HOPR Community Trust in exchange for equity. We believe the legal setup used to achieve this is the first of its kind and marks a milestone for hybrid DAO investments. Aragon DAO would have the opportunity to join this historic deal on the same terms as the HOPR token holders.
Benefits
RPC calls are the backbone of all web3 infrastructure, with >10bn calls made each day as part of a multi-billion dollar industry. However, current RPC setups expose user metadata including IP addresses, allowing providers to link and deanonymize wallets, even if they have never interacted on-chain.
The combination of HOPR and RPCh will plug the gaping metadata hole at the heart of web3 and make HOPR one of a handful of crypto projects to generate sustainable protocol revenue. To scale to this goal we are seeking funding from crypto-aligned sources, particularly DAOs, wallets and RPC providers. Since HOPR infrastructure is a public good, it is important to us to minimize exposure to misaligned VC incentives.
In addition to the general privacy protections HOPR and RPCh would bring, the combination of a feature-complete HOPR and RPCh would bring Aragon-specific use cases in the form of configurable privacy and latency. This is of particular use to Aragon as it allows hiding currently exposed metadata such as voting timestamps which can reveal a lot about a voter, who might have otherwise chosen to remain anonymous.
HOPR was approached by Aragon at our Istanbul event with a request to provide a long latency service to Privacy Delay Relayers to decouple vote actions from their timestamps. This kind of service is an inherent property of the full-feature HOPR protocol (although admittedly the usual expectation would be to choose very low latencies rather than very long ones on the time scale of hours!)
Configurable Privacy and Latency (Voter Privacy Use Case)
Transport layer privacy comes with costs in terms of latency and bandwidth. In fact, it is provably impossible to simultaneously min/max the anonymity set, network bandwidth and latency. This is known as the Anonymity Trilemma and at HOPR we seek to “solve” it by letting individual applications and users choose their specific trade-offs.
While the HOPR mixnet provides a base level of privacy far higher than anything available through regular internet usage, VPNs or even Tor, different use cases have different additional privacy needs, and some use cases would happily trade a small privacy reduction for lower latency or higher throughput.
In the current network setup, these trade-offs are basically global. This funding would allow us to focus development efforts on providing configurable privacy and latency on a per-node basis, allowing for different use cases to specify different latency thresholds. This will not only make HOPR and RPCh more useful to a broader range of applications, it will also specifically serve Aragon’s need for more private voting.
Voter privacy is a fundamental human right, one which will only become more important as decentralized digital governance becomes more widespread. HOPR and Aragon have a shared goal of preventing private for-profit corporations such as your ISP, Cloudflare or Google from harvesting the metadata that allows them to deanonymize and link DAO participants to other accounts, activities and user profiles.
Alignment with Aragon
HOPR’s mission and values are strongly aligned with the Aragon Association’s purpose “to directly or indirectly further the growth and development of Web3 open-source software applications and tools for the easy, transparent, borderless, permissionless and secure establishment, administration and operation of decentralized organizations and ecosystems”
A combination of HOPR and RPCh can resolve web3’s reliance on exposed IP addresses and other metadata. This cavalier approach allows wallets to be trivially connected even if they have never interacted on-chain, undermining vast swathes of on-chain privacy technologies such as zk-powered anonymity. It also exposes proof-of-stake based consensus to DDoS attacks on specific validators, and enables a wide array of new MEV attacks. RPCh can fix all of these, with no added complexity or cost passed on to users.
These technologies would also provide Aragon with enhanced voter privacy thanks to configurable latency, an important issue which Aragon is already aware of and seeking solutions for.
Finally, the nature of this investment itself is strongly aligned with Aragon’s mission to explore new approaches to decentralized governance and coordination between token holders. Aragon would join HOPR’s own token holders in a first-of-its-kind hybrid DAO investment in exchange for tokens and equity in RPCh. The principal shareholders will be DAOs and web3 service providers with direct skin in the game, a strong departure from the misaligned incentives of VC-focused investment, the negatives of which Aragon is intimately familiar with.
Development Team and Technologies
HOPR currently has a team of 10 developers split across two teams, roughly divided between protocol work and app / RPCh work.
All HOPR software is Free and Open Source. You can see our current progress in our repos at: HOPR Association · GitHub and RPCh · GitHub
The HOPR network is live with around 300 nodes and growing (access is currently permissioned to ensure stable scaling): https://network.hoprnet.org
RPCh is currently live and in alpha as a free service: https://rpch.net
The latest version of the HOPR smart contracts are currently being audited by Chain Security (the previous ones were also fully audited) and the next major HOPR release is slated for September 2023.
This release will introduce a new key management approach based on Safe and will switch on HOPR incentives (currently provided via a separate staking program).
The full version of RPCh will launch on top of this new release.
Financials and Milestones
The HOPR Association would receive $300,000 USDC to its multisig at address 0x752af2bf9dbbc1105a83d2ca1ee8f1046d85b702. This would be paid in three tranches of $100,000 USDC. The second and third tranches would be payable on completion of the two milestones listed below.
In exchange, Aragon would receive:
- RPCh equity worth $200,000 USD
- HOPR tokens worth $200,000 USD
- Free RPCh usage for six months after launch for anyone holding >10,000 ANT
The HOPR token was launched in February 2021 as a fair launch via a Balancer reverse auction price finding mechanism. 100% of funds raised during launch were placed under control of community governance. The HOPR token is currently listed on Coinbase and several other decentralized exchanges. The bulk of HOPR trading occurs on decentralized exchanges, facilitated via deep liquidity managed by the HOPR Community Trust.
We would encourage the Aragon DAO to run nodes in the HOPR network. Running nodes is simple and low-cost, but Aragon DAO would also be welcome to join our program to support DAOs and other web3 projects in running high-quality public relay nodes in the network.
Running a node would allow Aragon DAO to stake their HOPR in our new staking setup, in collaboration with Gnosis SAFE. Rewards are paid out for successful data relaying and via an additional incentive mechanism based on stake.
The funds would be ringfenced, with tranches of 100k only accessed on meeting certain developmental milestones. Failure to meet these milestones or deviating from this proposal would trigger return of the remaining funds.
Milestones:
- HOPR: Smart contract audit completed and contracts deployed, Safe-based node staking launched (expected September or October 2023), deploy smart contracts with HOPR-Ledger that enables fast and trustless indexing, RPCh: integrate Propellerheads backrunning service
- HOPR: Distributed version of hoprd which is running on rust-libp2p to increase scalability, RPCh: usable by 10+ concurrently online users with 95% uptime per day
Risks and Dependencies
- Performance The HOPR network is currently stable and reliable at a size of 300 nodes. The rest of 2024 is dedicated to scaling up the network, making it fully permissionless and rolling out the paid, feature-complete version of RPCh. We will then move on to configurable privacy and latency. We are confident in our technology, but it has not been battle tested, and we have only theoretical limits for throughput and latency. It’s possible that reality will not match the theory, and some low-latency and / or high throughput use cases cannot be served via HOPR. However, since the Aragon private voting use-case involves small amounts of data with deliberately high latencies, it is extremely likely that it will be achievable.
- Uptake When RPCh launches its paid version, it will make HOPR one of a handful of crypto projects funded through actual revenue. However, for this revenue to be sustainable, HOPR and RPCh will need sufficient users. It’s possible we will not achieve this, although we have commitments from multiple wallets and RPC providers that they will integrate the next version of RPCh into their services.
- Legal Landscape We are confident that the legal setup surrounding our new governance and this investment in particular is fully compliant in all applicable jurisdictions, including Switzerland. However, as is common throughout web3, this legal position is currently untested, and regulators in certain jurisdiction are not above employing political clout rather than legal sense.
Appendix
About HOPR
HOPR is a layer-0 transport privacy protocol designed to obscure both the data and metadata of any online data transfer. It’s the first fully incentivized and private mixnet, thanks to proof-of-relay, a cryptographic scheme which ensures that all node runners are rewarded for relaying data while preserving their privacy, but only once their relay tasks are completed.
About RPCh
RPCh is a service running on top of the HOPR network designed to provide the first private RPC calls
HOPR Association
The HOPR Association is a Swiss Association responsible for issuing the HOPR token and developing the HOPR protocol, RPCh and other products on top of the HOPR protocol. It is fully investor funded: all money raised from the initial sale of the HOPR token was placed under the control of HOPR token holders
HOPR Community Trust
HOPR Community Trust is a BVI-registered entity responsible for holding the funds raised from the launch of the HOPR token and enacting the wishes of the HOPR token holders with regards to those funds. It is the first investor in this investment round, and the community recently voted to invest around $900k into the development of HOPR under the same terms being offered to Aragon DAO.
HOPR Community Trust’s Investment
In May 2023, the HOPR token holders voted overwhelmingly (via strict quadratic voting) to support investment in RPCh.
The vote can be found here: https://snapshot.org/#/vote.hopr.eth/proposal/0x40760c8440daf1fbfff80080752dd113010d80599ef96eb4af67594ae51f3c43
The terms of the investment can be found here: https://docs.google.com/document/d/1EVuSTyTxIyCGivHnBgFLYXuhSh5aOHie/edit
HOPR RiSe
HOPR RiSe AG is a Swiss for-profit entity with the purpose of funding the development of products on top of HOPR, including RPCh. It is this entity which has issued equity to the HOPR Communtiy Trust, and which would issue equity to Aragon upon acceptance of this proposal ZefixWebApp
