Hedera Treasury Management Report

This document describes the methodology used to report Hedera’s management of the allocated and unallocated supply of hbars as directed by the Council’s Treasury Management and Token Economics Committee and presents the current data as of July 12, 2024.

Classification of Hbars

The Hedera network was launched with a Total Supply of 50 billion hbars. The Total Supply of hbars may not be modified without the unanimous consent of the members of the Hedera Council (LLCA § 8.4).

All hbars are initially considered Unreleased Supply until they are transferred to a User Account, i.e., an account operationally controlled by anyone other than the Hedera Council. For the purposes of this report, there are two types of Unreleased Supply:

  • Unallocated Supply has yet to be given a particular purpose by the Hedera Council, and is generally stored in the following Unallocated Supply Accounts:
    • 0.0.2,
    • 0.0.49, and
    • 0.0.400 through 0.0.438. 

  • Allocated Supply has been the subject of a decision by the Hedera Council to assign a particular purpose to specified amounts of Unallocated Supply, and is generally stored in the following Allocated Supply Accounts:
    • 0.0.42 through 0.0.48,
    • 0.0.50 through 0.0.71,
    • 0.0.73 through 0.0.87,
    • 0.0.99 through 0.0.102,
    • 0.0.111,
    • 0.0.112, and
    • 0.0.439 through 0.0.499.

Unreleased Supply transferred to a User Account is reclassified as Released Supply as of the time of transfer. Hedera does not use or define the term Circulating Supply*. Released Supply may be considered one possible method of determining Circulating Supply; however, different external parties may apply different definitions to certain hbars.

* For more information on released supply, please see: What is Hedera's circulating supply of HBAR?

Allocations and Release Schedule

Hedera reports new and existing allocations of Unallocated Supply into Allocated Supply as soon as practicable after the allocation becomes effective, but no less than quarterly. Related allocations are pooled into allocation categories and reported in the following chart with descriptions for each pool. Allocation amounts are not reduced after the related Allocated Supply is released and always sum to the Total Supply.

The new charts below reflect the May 2023 allocations, as documented in the May 2023 Hedera Council Meeting Minutes, as well as the allocations noted below:

Allocation Category 2024 %
Initial Development Costs and Licensing 3,869,316,000 7.74%
Purchase Agreements 12,698,348,449 25.40%*
Network Governance and Operations 8,116,201,648 16.23%**
Ecosystem and Open Source Development 18,249,114,945 36.50%***
Sub-total Allocated 42,932,981,042 85.87%
Unallocated Supply 7,067,018,958 14.13%
Total 50,000,000,000 100%

Comments:

  • * Adjusted based on actual and forecasted price of hbar at time of distribution.
  • ** Now includes 780M hbars allocated (but not distributed) for board reserves.
  • *** Includes new ecosystem grants.
Treasury Allocation v1 4 Treasury Allocation Stacked v1 1

Initial Development Costs and Licensing

Initial Development Costs and Licensing includes all hbars allocated to license and deploy the hashgraph technology, which was originally engineered and patented by Swirlds, Inc. The Hashgraph License Agreement required ongoing monthly payments to Swirlds, Inc. for use of the technology on a public ledger. Payment to Swirlds’ investors was a one-time compensation for their commitment of Swirlds resources and personnel to the Hedera deployment. All intellectual property was purchased and open-sourced by the Hedera Council in 2022, which ended the need to continue allocating coins into this category.

Purchase Agreements

Purchase Agreements include all hbars sold to users under regulated sales contracts. Simple Agreements for Future Tokens (SAFTs), regulated investment contracts under applicable securities laws, were sold prior to network functionality. The SAFT Exchange Offer offered initial SAFT purchasers the opportunity to receive additional hbars in exchange for a longer release schedule. Token Purchase Agreements (TPAs), regulated swap contracts under applicable commodities laws, were sold after network functionality to support ongoing operations.

Network Governance and Operations

Network Governance and Operations includes all hbars used as compensation to founders, executives, employees, and contractors. The Coin Plan was the initial structure for compensation to contributors in fixed amounts of hbars. Council Operations reflects the current structure of compensation to contributors and is largely tailored to measurable governance or operational contributions.

Ecosystem and Open Source Development

Ecosystem and Open Source Development includes all hbars released to the community for furthering the decentralization and development of the Hedera ecosystem. The Community Incentive Program and Developer grants were early programs designed to incentivize testing of the Hedera network and jumpstart development of essential applications. The Ecosystem Development Program is a commitment by the Hedera Council to significantly empower independent organizations such as The HBAR Foundation and take other actions that further decentralize ecosystem growth efforts.

Unallocated Supply

Unallocated Supply includes the remaining hbars yet to be given a particular purpose by the Hedera Council.

* * *

The following tables report the actual release of hbars (shown in kilobars (thousands of hbars)) under each allocation category by calendar quarter showing forecasted releases through the following quarter based on existing commitments to counterparties. Estimated releases beyond one quarter may introduce inaccuracies and reduce the integrity of this report.

Allocation
Categories
(Tier 1 & 2)
Open
Access
(Actl)
2019
(Actl)
Q1 2020
(Actl)
Q2 2020
(Actl)
Q3 2020
(Actl)
Q4 2020
(Actl)
Q1 2021
(Actl)
Q2 2021
(Actl)
Q3 2021
(Actl)
Q4 2021
(Actl)
Q1 2022
(Actl)
Q2 2022
(Actl)
Q3 2022
(Actl)
Q4 2022
(Actl)
Q1 2023
(Actl)
Q2 2023
(Actl)
Q3 2023
(Actl)
Q4 2023
(Actl)
Q1 2024
(Actl)
Q2 2024
(Actl)
Q3 2024
(Fcst)
Initial Dev
Costs/Licensing
(Tier 1)
3,510,714 - - - - 293,465 32,719 7,395 9,150 5,037 4,577 - - - - - 10,723 - - - -
Hashgraph
License
Agreement
(Tier 2)
2,500,000 - - - - 293,465 32,719 7,395 9,150 5,037 4,577 - - - - - 10,723 - - - -
Swirlds
(Tier 2)
1,010,714 - - - - - - - - - - - - - - - - - - - -
Purchase
Agreements
(Tier 1)
378,606 916,050 714,393 614,545 1,292,931 643,504 547,496 519,896 982,621 609,837 526,931 523,885 723,723 531,441 561,178 531,799 424,981 50,588 37,969 28,132 67,649
SAFT
Fundraising
(Tier 2)
378,606 916,050 714,393 614,545 562,931 502,951 502,780 515,775 543,692 504,389 506,869 502,643 541,458 333,148 331,676 332,438 340,747 3,668 4,010 3,741 38,349**
SAFT
Exchange
Offer
(Tier 2)
- - - - - 140,553 44,715 4,121 1,279 54,532 20,063 720 39,537 20,995 30,658 22,355 29,773 29,023 33,959 24,391 29,300
TPA
Sales
(Tier 2)
- - - - 730,000 - - - 437,650 50,916 - 20,522 142,728 177,298 198,844 177,006 54,461 17,897 - - -
Network
Governance/Ops
(Tier 1)
- 640,865 892,140 178,332 272,715 410,996 396,121 515,224 576,252 555,716 368,090 321,211 329,055 297,432 344,900 392,868 329,226 93,943 46,263 17,330 62,366
2018 Coin Plan
(as amended)
(Tier 2)
- 640,865 761,930 145,539 238,633 375,966 368,237 493,386 554,413 535,014 359,720 313,855 320,389 289,168 311,029 363,940 308,949 72,983 31,420 14,059 20,432
Council
Operations*
(Tier 2)
- - 130,209 32,793 34,082 35,031 27,884 21,838 21,839 20,703 8,370 7,356 8,666 8,265 33,871 28,929 20,277 20,960 14,843 3,271 41,934***
Ecosystem/Open
Source Dev
(Tier 1)
- 8,106 10,863 22,877 50,595 51,950 37,077 11,042 113,280 2,548,021 495,917 707,310 1,915,035 18,426

4,468,186

799,962 449,019 33,731 15,588 1,996,090 1,312,651
Community
Incentive
Program/Dev
Grants
(Tier 2)
- 8,106 10,863 22,877 50,595 51,950 37,077 11,042 113,280 6,691 22,222 13,365 - 5,616 - - - - - - -
Ecosystem
Dev
Program*
(Tier 2)
- - - - - - - - - 2,541,330 473,695 401,263 995,094 12,735 654,073 799,962 449,019 33,731 15,588 1,996,090 1,027,914^
Open
Source
Dev
(Tier 2)
- - - - - - - - - - - 292,683 919,941 75 3,814,113 - - - - - 284,737^^
Sub-total
Allocated
(Tier 2)
3,889,320 1,565,021 1,617,396 815,754 1,616,240 1,399,915 1,013,413 1,053,557 1,681,304 3,718,612 1,395,516 1,552,406 2,967,814 847,299 5,374,264 1,724,629 1,213,950 178,262 99,820 2,041,551 1,442,667
Unallocated
Supply
(Tier 1)
Released
Supply
(Tier 2)
3,889,320 5,454,341 7,071,737 7,887,491 9,503,731 10,903,647 11,917,059 12,970,616 14,651,920 18,370,532 19,766,047 21,318,454 24,286,268 25,133,567 30,507,831 32,232,460 33,446,410 33,624,672 33,724,492 35,766,043 37,208,710
Aggregate
Percentage
(Tier 2)
7.78% 10.91% 14.14% 15.77% 19.01% 21.81% 23.83% 25.94% 29.30% 36.74% 39.53% 42.64% 48.57% 50.27% 61.02% 64.46% 66.89% 67.25% 67.45% 71.53% 74.42%
Illiquid
Supply
(Tier 2)
- - - - - - - - - - - - - - 2,672,939 2,477,710 2,331,206 2,213,307 145,883 36,471 -
Adjusted
Released
Supply
(Tier 2)
- - - - - - - - - - - - - - 27,834,892 29,754,751 31,115,204 31,411,365 33,578,608 35,729,572 37,208,710
Adjusted
Aggregate
Percentage
(Tier 2)
- - - - - - - - - - - - - - 55.67% 59.51% 62.23% 62.82% 67.16% 71.46% 74.42%

Comments:

Notes

For the purposes of the above reports, the following principles are applied:

  • Projections
    If an allocation or future commitment is priced in a currency other than hbar, actual release amounts may vary from the amounts in this report. Such allocation categories and/or future commitments are projected through the end of the current calendar year using best available fair market value at the time the report is created.

  • Precision
    Any annual and quarterly numbers are rounded to the nearest 1,000 hbar. Rounding, fees, and minor release errors may skew the numbers below this amount.

  • Disclaimer and Amendments
    Statements in this report relating to Hedera's future plans, expectations, beliefs, intentions and prospects, including statements regarding its current and future operating expenses and any financial projections, are "forward-looking statements" and are subject to material risks and uncertainties. While they are all made in good faith, no assurance can be made that any or all of the events in such forward-looking statements will occur, and you should not place undue reliance upon them. Hedera makes no representation or warranty, express or implied, with respect to any financial projection or forecast relating to Hedera, the Hedera network, hbars, or with respect to the accuracy of any underlying assumption. Any external party is fully responsible for making its own evaluation of the adequacy, reliability, and accuracy of any projections or forecasts furnished to it. All data contained herein is presented on a good faith basis and is subject to further audits, updates, and corrections if required.

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