New (v3) of the Hbar Economics Whitepaper
Jun 04, 2020
by Hedera Team
Hedera is the most used, sustainable, enterprise-grade public network for the decentralized economy.

Disclaimer: the information below is no longer accurate and the latest information is available on the Treasury Management Report page, which is updated monthly.

Hedera has come a long way since open access (OA), nearly nine months ago, on September 16th, 2019. OA is when the Hedera mainnet became publicly available for anyone to create accounts and deploy their applications to the network. It was also when hbar cryptocurrency began to be distributed and exchanged, making it available for its intended dual purpose as network fuel and network protection.

In conjunction with OA, Hedera released the first edition (v1) of its Hbar Economics Whitepaper. The purpose of this paper is to provide the Hedera community with transparency and insight into the distribution, allocation, and ecosystem of hbar. Hedera has always viewed the Hbar Economics Whitepaper as a “living document”, which requires updating as the Hedera network, including its Governing Council which oversees the Hedera Treasury, and its ecosystem of stakeholders matures. On June 3rd, 2020, Hedera released the latest version (v3) of the Hbar Economics Whitepaper. This blog posting will describe the history of the Hbar Economics Whitepaper and the substantial changes made from v2 (October 2019) to v3 (June 2020).

The latest version of the Hbar Economics Whitepaper (v3) can be downloaded here.

A brief history of the Coin Economics Whitepaper

One week after OA, Mance Harmon, CEO and Co-Founder, outlined Hedera mainnet network performance and token economics in this blog post — it contained changes to the frequency of SAFT 1, SAFT 2, as well as distributions to employees in 2019; it also included removing the undistributed community testing hbars from consideration as part of circulating supply. This prompted a small update to the Hbar Economics Whitepaper (v2) on October 9th, 2019.

At the end of 2019, Hedera published a message from the founders which outlined research findings by the Prysm Group, a blockchain economics consulting agency, as well as a proposal to SAFT holders based on those findings and in recognition of their early support. The proposal became a foundational component of the SAFT Exchange Offer, which, if accepted by a SAFT holder, included an extended distribution schedule in exchange for an additional allocation of hbars. Acceptances of this offer and additional updates to employee retention grants based on Prysm findings resulted in amendments to the distribution schedule and coin allocations. The new schedule and allocations have been reflected in the Hbar Economics Whitepaper (v3).

Changes in v3 of the Hbar Economics Whitepaper

The sections below outline changes made to the Hbar Economics Whitepaper from v2 to v3. For the most accurate side-by-side comparison, please download v2 and v3 of the whitepaper. The information below shows Hedera's planned hbar allocation and release schedules. The actual release schedule may vary in the future due to unforeseen business or regulatory changes, and Hedera assumes no liability whatsoever for any variations therefrom.

Hbar distribution schedule & circulating supply (2019 - 2025)

In v1 of the Hbar Economics Whitepaper, Hedera introduced an estimated 15-year distribution schedule of hbars into the ecosystem — this distribution schedule was also presented by Dr. Leemon Baird, Co-Founder & CTO, in the “Path to Decentralization” webinar. The 15-year distribution schedule of hbars remained in v2 of the Hbar Economics Paper.

The schedule has been changed in v3 of the Hbar Economics Whitepaper to reflect the new distribution schedule below, spanning from 2019 - 2025, with an estimated release of 34% of all hbars by 2025. In comparison, the Hbar Economics Whitepaper v1 & v2 cited an estimated release of 59% of all hbars by 2025 and estimated releases through 2033.

Screen Shot 2020 06 03 At 3 57 16 Pm

Hbar allocation changes

In v2 of the Hbar Economics Whitepaper, Hedera included a chart outlining coin allocations totaling 50B hbars across a variety of categories. V3 of the Whitepaper includes changes to the hbar distribution amounts and percentages, as well as renaming, coupling, decoupling, and deprecating various categories to create a more accurate understanding of hbar allocations. Please refer to the table below for a detailed look at what has changed.

Coin allocation comparison between v2 and v3 of the Hbar Economics Whitepaper

Screen Shot 2020 06 03 At 3 34 04 Pm

* Includes employee grant increases and assumptions for retention grants and new hires.

** Includes co-founder & senior executive team and assignments.

New coin allocation (v3 of the Hbar Economics Whitepaper)

Screen Shot 2020 06 03 At 3 56 43 Pm

SAFT Exchange Offer acceptance

The SAFT Exchange Offer was an offer to all SAFT holders (1, 2, 3A, and 3B) released on March 17th, 2020, to exchange outstanding SAFTs for a new form of SAFT.

SAFT holders who accepted the offer receive an extended hbar distribution schedule in exchange for an additional allocation of hbars. Acceptance of the Offer by SAFT holders resulted in changes reflected in the distribution schedule outlined within the Coin Distribution section of the Hbar Economics Whitepaper (v3).

A tally of those who’ve accepted the offer, per SAFT round, as well as the cumulative USD amounts, are outlined below and in the Hbar Economics Whitepaper (v3).

Screen Shot 2020 06 03 At 3 58 13 Pm

2020 Coin Purchase Agreement

Hedera is raising additional funds to support ongoing operations by selling hbars to a small number of institutional purchasers, with coins to be delivered after a multi-year lockup period consistent with Hedera’s previously published coin release schedule. This activity is discussed with detail in the “Community Town Hall” meeting with Mance Harmon, CEO & Co-Founder of Hedera, in April 2020.

Under the agreed-upon terms of these sales, purchasers will pay $0.015 per hbar, will not receive any of those hbars for the first two years, and then will receive delivery of the hbars in 12 equal monthly installments beginning two years from the close of the sale (i.e., from month 25 to month 36 following closing).

The hbars that will ultimately be distributed to the counterparties under these agreements are hbars that otherwise could have been released or sold by Hedera from the Treasury account during the next 2-3 years. Hedera expects to raise up to an estimated $20 million in these sales, which would account for 1,333,333,333 hbars. The distribution schedule in the “Hbar distribution schedule & circulating supply (2019 - 2025)” section of this blog posting outlines this distribution.


Hedera believes proactive communication is part of being a responsible stakeholder in the hbar ecosystem. Hedera will continue to update and remain transparent with the community around the economics of hbars through this Hbar Economics Whitepaper, as well as our monthly hbar distribution reports.