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.