Hedera (HBAR) tokenomika

Hedera’s native cryptocurrency, HBAR, serves as the foundational fuel for the network's economy. Launched in 2018 alongside the mainnet, HBAR is designed for two primary purposes: network fuel and network protection. The total supply is capped at 50 billion HBAR, a limit that cannot be increased without the unanimous consent of the Hedera Governing Council.

Issuance Mechanism

HBAR tokens were pre-minted at the network's launch on August 24, 2018. Unlike inflationary networks that issue new tokens through mining or continuous minting, Hedera utilizes a controlled release strategy from its treasury.

• Treasury Release: Tokens are distributed from the Hedera Treasury at discrete intervals, typically following a quarterly schedule. This controlled release is intended to mitigate the risk of a single entity gaining a one-third stake in the network, which could compromise the security of the hashgraph consensus.
• Supply Cap: The maximum total supply is fixed at 50,000,000,000 HBAR.
• Circulating Supply Trends: As of late 2023 and early 2024, the circulating supply has surpassed 30 billion HBAR, representing over 60% of the total supply.

Allocation Mechanism

The initial and subsequent allocations of HBAR are managed by the Hedera Governing Council to support long-term ecosystem growth and network security.

Key Allocation Details:

• HBAR Foundation: In September 2021, the HBAR Foundation was allocated a significant portion (approximately 10.7 billion HBAR) to fund development initiatives, including grants for DeFi, NFTs, and sustainability projects.
• Swirlds, Inc.: As the creator of the hashgraph technology, Swirlds received a one-time allocation of 2.5 billion tokens and receives ongoing monthly payments equivalent to 10% of Hedera's revenue.
• Ecosystem Initiatives: In January 2024, the Council approved an additional 4.86 billion HBAR for ecosystem development initiatives managed by the Hedera Board of Directors.

Usage and Incentive Mechanism

HBAR is utilized across the network for various functional and economic purposes:

• Transaction Fees: HBAR is used to pay for all network services. These fees are split into three components:
  • Node Fees: Paid to the specific node that submits the transaction.
  • Network Fees: Paid to the network for calculating consensus.
  • Service Fees: Paid to the network for the specific service used (e.g., file storage or token minting).
• Predictable Pricing: While fees are paid in HBAR, they are denominated in USD. This allows developers to have predictable operational costs regardless of HBAR's price volatility.
• Staking and Security: Hedera uses a permissioned Proof-of-Stake (PoS) mechanism. Consensus nodes must stake HBAR to secure the network, and their influence on consensus is weighted by their stake.
• Staking Rewards: As of March 2024, the Council approved a maximum annual staking reward rate of 2.5%. Nodes must meet a minimum threshold (e.g., 250 million HBAR) to accrue rewards from the Staking Reward account.
• Medium of Exchange: HBAR is used within the ecosystem to trade for other assets on decentralized exchanges (like SaucerSwap) or to purchase NFTs.

Locking Mechanism and Unlocking Time

Hedera employs structured vesting and lock-up periods for various stakeholders to ensure market stability.

• Restricted Coin Units (RCUs): Employees and advisors are typically compensated with RCUs. These generally follow a four-year vesting schedule with a one-year cliff, meaning no tokens are received until the first anniversary of the grant.
• SAFT Investor Unlocks: Simple Agreement for Future Tokens (SAFT) investors have historically followed tiered unlock schedules. While many early rounds have completed their primary distributions, some participants in the SAFT Exchange Offer accepted extended distribution schedules in exchange for additional token allocations.
• Treasury Release Schedule: The project originally outlined a 15-year release schedule for treasury tokens. However, updated whitepapers (v3) adjusted these estimates, targeting a release of approximately 34% of all HBAR by 2025, a more conservative pace than earlier versions which estimated 59% by the same date.
• Quarterly Distributions: Major unlocks from the treasury and for ecosystem programs are typically executed at the end of each quarter. For instance, in Q3 2023, approximately 3.7% of the total supply was scheduled for release to support investors, core contributors, and ecosystem programs.