# Development Phases of $HOPE

## Phase 1 : Bootstrapping Token

$HOPE will be initially launched at `$0.50`, and it will be listed on [HopeSwap](https://docs.hope.money/protocols/hopeswap) once HOPE Gömböc is in place.

The dedicated market makers ensure that $HOPE has sufficient liquidity through the BTC/ETH-backed tracking mechanism.

**How does the BTC/ETH-backed tracking mechanism work?**

<figure><img src="https://285576528-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F56LPGHUCjDtUfn1QgxEV%2Fuploads%2FIGcD5WHQjH4Mf7rzanBe%2FMicrosoftTeams-image%20(15).png?alt=media&#x26;token=7595db20-93f0-47e6-ada7-83dfe2cc4666" alt=""><figcaption><p>BTC/ETH-backed tracking mechanism</p></figcaption></figure>

**Expansion**&#x20;

* When there’s an increased demand for $HOPE in the market, $HOPE will trade at a premium to the tracking price.
* Market makers will sell $HOPE at high price in the market and also be incentivized to more minting activities, resulting in an increase in the supply of $HOPE.
* The expansion of $HOPE in circulation will bring the tracking price back in place.

**Contraction**&#x20;

* When there’s a decreased demand for $HOPE in the market, $HOPE will trade at a discount to the tracking price.
* Market makers will buy $HOPE at low price in the market and also be incentivized to more burning activities, resulting in a decrease in the supply of $HOPE.
* The contraction of $HOPE in circulation will bring the tracking price back in place.

## Phase 2 : Interim Pricing Token

**Self-Correcting Pricing Mechanism**

Once $HOPE reaches peg (the Peg Event), HOPE Gömböc will start to include stablecoins.

As the Peg Event takes place, dedicated market makers will be able to subscribe and redeem $HOPE 1:1 from the protocol using stablecoins.

In situations where the total value of HOPE Gömböc is less than total market cap of $HOPE’s face value, the dedicated market makers will subscribe/redeem $HOPE with a basket of BTC/ETH to bring the market price of $HOPE back to equilibrium, i.e. `$1.00`. This self-correcting market mechanism is similar to the one described in Phase I.

**How does the pegging mechanism work?**

<figure><img src="https://285576528-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F56LPGHUCjDtUfn1QgxEV%2Fuploads%2Flms635ZvgkrYm1FRDfbk%2FMicrosoftTeams-image%20(14).png?alt=media&#x26;token=d7b7f86c-e1bb-44ca-acf8-968a2fa42635" alt=""><figcaption><p>Pegging Mechanism</p></figcaption></figure>

**Expansion**&#x20;

* When there is an increase in demand, $HOPE will be trading at a premium to `$1.00`.
* The higher price will then incentivize more minting activities and result in an increase in the supply of $HOPE, which will bring the pricing back to `$1.00`.
* Reserve assets - BTC / ETH / USDT(C) – are added to HOPE Gömböc during minting activity, ensuring sufficient intrinsic value backing $HOPE’s dollar peg.

**Contraction**&#x20;

* When there is a decrease in demand, $HOPE will be trading at a discount to `$1.00`.
* The lower price will then incentivize more burning activities and result in a decrease in the supply of $HOPE, which will bring the pricing back to `$1.00`.
* Reserve assets - BTC/ETH/USDT(C) – are removed from HOPE Gömböc
* During burning activity, retaining sufficient intrinsic value backing $HOPE’s dollar peg.

## Phase 3 : Eco-Native Stablecoin

Subject to the LightDAO’s approval, $HOPE will be officially declared as the ecosystem’s native stablecoin as HOPE Gömböc reaches a certain multiple of the total face value of $HOPE.

BTC and ETH in HOPE Gömböc will be gradually converted to distributed, stable-value and liquid assets to avoid impact from coin price fluctuations.

Subject to LightDAO’s approval, $HOPE insurance fund (consisting of excess reserves and parts of the DAO’s treasury) will be set up as a war chest to protect the peg and defend $HOPE’s value.