As part of our commitment to transparency and as is our regular practice, Hedera is providing the following update regarding hbars that are scheduled to enter the market. Community members can also access an accurate accounting at the end of each month reflecting actual hbar distributions via this report: https://help.hedera.com/hc/en-…
Since shortly after Open Access, all distributions from grants to employees and certain contractors were put on hold pending our work on the token economics plan, which I shared in my post last week: https://www.hedera.com/blog/2019-message-from-the-founders. Due to contractual, tax and regulatory obligations we are not able to delay those coin distributions indefinitely. The coins under those grants that have vested from our inception in 2017 through the end of 2019, excluding those to the founding executive team and certain departed employees, will be released on December 31st. The total expected number of hbars to be released is 540 million and the cost basis of those coins is zero. For tax reasons, 80 million of the 540 million coins will not be distributed directly to employees, but rather are being withheld and sold to a third party over time to cover the company’s tax withholding obligations for employee distributions. The sale of the 80 million withheld coins started in mid-December, and we expect that all of those coins will be sold to the third party in the next 120 days. Those coins are not locked-up and we don’t control what the third party does with them; they are not sales from Hedera Treasury, but sales of coins withheld from employee distributions for tax purposes. Employees and contractors receiving coins also may need to sell coins to meet tax obligations or may choose to do so for other reasons.
After this distribution there will be just over 2 billion hbars in circulation, representing 4 percent of the 50 billion hbars in total.
To everyone in the Hedera community we wish you a very Happy New Year, and we are excited for all that 2020 promises to be for the network. Thank you for your continued support.
Mance Harmon
