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 December 6, 2022.

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.

Allocation Pie Chart v4 6x

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 table reports the release of hbars under each allocation category by calendar quarter, extending through the end of the current calendar year, showing estimated releases based on existing commitments to counterparties. Estimated releases beyond one year may introduce inaccuracies and reduce the integrity of this report.

Allocation Categories Allocation Subcategories Total Allocations
(HBAR)
Percentage
(%)
Open Access
Distributions
2019
Distributions
(HBAR)
Q1 2020
Distributions
(HBAR)
Q2 2020
Distributions
(HBAR)
Q3 2020
Distributions
(HBAR)
Q4 2020
Distributions
(HBAR)
Q1 2021
Distributions
(HBAR)
Q2 2021
Distributions
(HBAR)
Q3 2021
Distributions
(HBAR)
Q4 2021
Distributions
(HBAR)
Q1 2022
Distributions
(HBAR)
Q2 2022
Distributions
(HBAR)
Q3 2022
Distributions
(HBAR)
Q4 2022
Distributions
(HBAR)
Q1 2023
Distributions
(HBAR)
Q2 2023
Distributions
(HBAR)
Q3 2023
Distributions
(HBAR)
Q4 2023
Distributions
(HBAR)
Total
Distributions
(HBAR)
Inital Development Costs and Licensing 3,869,316,000 7.74% 3,510,714,000 44,185,000 105,068,000 50,741,000 42,771,000 56,959,000 32,719,000 7,395,000 9,150,000 5,037,000 4,577,000 - - - - - - -
Hashgraph License Agreement 2,858,602,000 5.72% 2,500,000,000 44,185,000 105,068,000 50,741,000 42,771,000 56,959,000 32,719,000 7,395,000 9,150,000 5,037,000 4,577,000 - - - - - - - 2,858,602,000
Swirlds Investors 1,010,714,000 2.02% 1,010,714,000 - - - - - - - - - - - - - - - - - 1,010,714,000
Purchase Agreements 11,130,437,738 22.26% 378,606,000 916,050,000 721,566,000 620,566,000 1,297,294,000 647,884,000 537,278,000 509,903,000 984,363,000 610,286,000 526,115,000 527,063,000 723,524,000 534,881,950 554,476,116 533,953,938 416,686,404 44,256,331 11,084,752,738
SAFT Fundraising 8,720,985,000 17.44% 378,606,000 916,050,000 721,566,000 620,566,000 567,294,000 505,994,000 505,994,000 505,994,000 545,830,000 505,994,000 505,994,000 505,994,000 545,830,000 333,747,000 333,747,000 333,747,000 338,685,000 3,668,000 8,675,300,000
SAFT Exchange Offer 391,946,824 0.78% - - - - - 141,890,000 31,284,000 3,909,000 883,000 53,376,000 20,121,000 547,000 34,966,000 20,994,165 20,994,165 20,994,165 20,994,165 20,994,165 391,946,824
TPA Sales 2,017,505,914 4.04% - - - - 730,000,000 - - - 437,650,000 50,916,000 - 20,522,000 142,728,000 180,140,785 199,734,951 179,212,773 57,007,239 19,594,166 2,017,505,914
Network Governance and Operations 7,386,100,689 14.77% - 640,865,000 1,210,748,000 233,532,000 199,892,000 477,739,000 463,557,000 450,678,000 454,243,000 448,106,000 338,592,000 313,105,000 315,547,723 342,890,432 337,040,226 335,869,893 332,239,893 79,145,893 6,973,791,060
2018 Coin Plan (as amended) 7,000,000,000 14.00% - 640,865,000 1,210,748,000 233,532,000 199,892,000 477,739,000 463,557,000 450,678,000 454,243,000 448,106,000 338,592,000 313,105,000 297,608,000 274,256,000 265,561,000 258,974,000 255,344,000 2,250,000 6,585,050,000
Council Operations* 386,100,689 0.77% - - - - - - - - - - - - 17,939,723 68,634,432 71,479,226 76,895,893 76,895,893 76,895,893 388,741,060
Ecosystem and Open Source Development 11,950,337,000 23.90% - - 13,490,000 19,174,000 53,309,000 43,538,000 29,386,000 13,145,000 - 2,541,330,000 473,695,000 1,613,887,000 593,832,000 613,924,626 2,248,594,652 403,529,660 403,529,660 2,266,660 9,066,631,258
Community Incentive Program and Developer Grants 1,250,000,000 2.50% - - 13,490,000 19,174,000 53,309,000 43,538,000 29,386,000 13,145,000 - - - - - - - - - - 172,042,000
Ecosystem Development Program* 10,700,337,000 21.40% - - - - - - - - - 2,541,330,000 473,695,000 1,613,887,000 593,832,000 613,924,626 2,248,594,652 403,529,660 403,529,660 2,266,660 8,894,589,258
Sub-total Allocated 34,336,191,428 68.67% 3,889,320,000 1,601,100,000 2,050,872,000 924,013,000 1,593,266,000 1,226,120,000 1,062,940,000 981,121,000 1,447,756,000 3,604,759,000 1,342,979,000 2,454,055,000 1,632,903,723 1,491,697,008 3,140,110,994 1,273,353,491 1,152,455,957 125,668,884 30,994,491,056
Unallocated Supply 15,663,808,572 31.33%
Released Supply 3,889,320,000 5,490,420,000 7,541,292,000 8,465,305,000 10,058,571,000 11,284,691,000 12,347,631,000 13,328,752,000 14,776,508,000 18,381,267,000 19,724,246,000 22,178,301,000 23,811,204,723 25,302,901,731 28,443,012,725 29,716,366,215 30,868,822,172 30,994,491,056
Aggregate Percentage 7.78% 10.98% 15.08% 16.93% 20.12% 22.57% 24.70% 26.66% 29.55% 36.76% 39.45% 44.36% 47.62% 50.61% 56.89% 59.43% 61.74% 61.99%

Comments:

  • Includes variable commitments based on USD.
  • Q4'22 to Q4'23 shows estimated distributions based on commitments
  • Historical reporting from 2018 - 2022 has been updated based on estimated accruals.

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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