Proposal to Add hETH-WETH to the Gauge Controller

Gauge Proposals
#1

Summary:

Hinkal is a Shared Privacy Layer enabling Anonymity Staking of ETH to increase the privacy coverage for protocol users.

hETH is a Liquid Privacy Token and a receipt token for Anonymity Staking. hETH accrues yield from private transactions on Hinkal and can be used in the broader DeFi ecosystem.

To make secondary liquidity of hETH more accessible in larger volumes, an hETH-WETH pool was created. Hinkal proposes to add hETH-WETH pool on Ethereum to the Gauge Controller.

• Link to pool

• Link to gauge

References/Useful links:

• Website

• Documentation

• DefiLlama

• Twitter

• Discord

Protocol Description:

Hinkal is an institutional-grade Shared Privacy Layer enabling Anonymity Staking and confidential transactions on major EVM chains. The protocol’s hETH (Hinkal staked ETH) is a yield-bearing Liquid Privacy Token, representing users’ ETH staked to the Hinkal smart contract. ETH staked on Hinkal increases the Shared Privacy Pool which extends the privacy capabilities of the protocol. Anonymity Staking is self-custodial - staked ETH is deposited to a non-upgradable smart contract and can only be moved by holders of hETH.

hETH generates yield from private transactions on Hinkal and increases in value to reflect the base rewards in ETH. Additionally, users earn Hinkal Points for holding hETH, holding hETH-WETH LP tokens, and swapping hETH with other assets.

The hETH contract went live on September 15th, 2024, and has accumulated approximately $2.7M worth of ETH. The price of hETH is aligned with the total amount of ETH held inside the contract.

Motivation:

Hinkal plans to use the hETH-WETH stableswap pool on Curve to serve as a primary source of liquidity for hETH. Incentivizing the Curve pool will further boost the liquidity of hETH. Higher liquidity ensures that traders and investors can easily enter or exit positions, which is essential for the overall usability and attractiveness of hETH within the DeFi ecosystem. To ensure success, Hinkal is committed to growing pool liquidity through boosts and other incentives.

Specifications:

  1. Governance: the core smart contract that holds the assets is non-upgradable.
    The protocol utilizes cold wallets to change complementary functions.

  2. Oracles: The protocol does not use oracles since it provides smart contract privacy and assets are monitored inside the smart contract.

  3. Audits: Audit reports for Hinkal can be found on the Whitepaper page - Integrity Check & Security. The audits have been carried out by reputable firms such as zkSecurity, Zokyo, Quantstamp, and Secure3 to ensure the security of the protocol. A bug bounty was also recently completed through Immunefi. Hinkal also uses Hexagate for Real-Time Protection and wallet screening.

  4. Centralization vectors: The centralization vector primarily relates to developers in relation to upgrading the non-core functionality of the smart contract such as ZK verifiers.

  5. Market History: hETH has accumulated approximately $2.7M worth of ETH staked within the protocol since launching in the middle of September 2024.

Voting Live:
https://dao.curve.fi/vote/ownership/868
https://crvhub.com/governance/ownership/868

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