Hoop damage is the damage that a character receives when they are out of the camera's boundaries. Once a character reaches 150%, however, this no longer occurs. Hoop damage is present in both Melee and Brawl. It was never mentioned on the Smash Bros. DOJO!!, until April 14, 2008. Hoop damage occurs in every mode, except for Training Mode.
In SSBM, the "hoop" was called the Magnifying Glass, as evidenced by the Lost In Space bonus.