DEFINITIONS AND ACCOUNTS
The following definitions are used to classify all hbars in existence with respect to their control and management by the Hedera Council and Hedera staff and their liquidity among the public. The Total Supply of hbars is 50 billion and is subdivided into Unreleased Supply and Released Supply.
- Unreleased Supply
Unreleased Supply consists of the portion of pre-minted hbars yet to be distributed to the public and controlled by the Hedera Council or Hedera staff, subdivided into the Hedera Pre-minted Treasury and Allocated Supply. A network account is controlled by the entity with the operational ability to affect the state of the network account, i.e., the entity in possession of the requisite private keys.
- Hedera Pre-minted Treasury
Hedera Pre-minted Treasury consists of pre-minted hbars unallocated for a particular purpose and controlled by the Hedera Council as a whole. The Hedera Pre-minted Treasury Accounts are:
- Allocated Supply
Allocated Supply consists of pre-minted hbars allocated for a particular purpose by the Hedera Council and controlled by the Hedera Staff. Allocations are typically evidenced by written actions or meeting minutes of the Council or Board and may be of a fixed amount (e.g., RCU Plan) or variable amount (e.g., SAFT Bonus Allocations). In rare cases, allocations may be withdrawn by the Hedera Council if they are undistributed and returned to Hedera Pre-minted Treasury. The Allocated Supply Accounts are:
- Hedera Pre-minted Treasury
- Released Supply
Released Supply consists of the portion of pre-minted hbars that have been distributed. Unreleased Supply is distributed upon the earlier of its transfer to a network account controlled by a member of the public (regardless of whether such hbars remain encumbered by Hedera or otherwise) or to an Operational Supply Account controlled by Hedera Staff. Public means any individual or entity other than Hedera. Distributions are typically evidenced by legal agreements with the hbar recipient (e.g., SAFT Purchaser). Distributions are never withdrawn, and Released Supply is never returned to Unreleased Supply.
Released Supply can be considered one possible method of determining Circulating Supply; however, different market research and data reporting companies may apply different definitions to certain hbars. Additional information is supplied below to inform other methods of determining Circulating Supply.
- Operational Supply
Operational Supply consists of the portion of Released Supply that is controlled by the Hedera Council or the Hedera Staff at any time after its initial distribution. Operational Supply may consist of hbars controlled for the purpose of ordinary network function, e.g., network fee pooling accounts. Operational Supply may also consist of pre-minted hbars unencumbered by Hedera but yet to be transferred to the recipient due to compliance, technical, or operational issues that delay such transfer, such as incomplete payment instructions. The Operational Supply Accounts are:
- Illiquid Supply
Illiquid Supply consists of the portion of Released Supply that is controlled by a member of the public but is known by Hedera to have contractual or self-imposed limitations on ownership transfer. Illiquid Supply may include hbars held by Council Members or Hedera Founders that have publicly committed to sales restrictions. Illiquid Supply includes the following:
- Hedera retains the right to repurchase distributions to Swirlds pursuant to the Master License Agreement at fair market value prior to their sale to the public. Swirlds has publicly disclosed information about their subsequent distributions to their employees, contractors, advisors, and investors, available here: https://www.swirlds.com/category/blog/.
- Hedera co-founders have publicly disclosed a sales schedule, available here: https://help.hedera.com/hc/en-us/sections/360005580257-Founder-hbars.
- A distribution of 730,000,000 hbars sold pursuant to a Coin Purchase Agreement and transferred to an escrow account in Q3 2020 remains restricted from ownership transfer. Beginning August 2022, one-twelfth of these hbars will become unrestricted each month until all such hbars are unrestricted.
- A distribution of 437,650,000 hbars sold pursuant to a Coin Purchase Agreement and expected to be transferred to an escrow account in Q3 2021 includes an extended holding period for the purchased hbars; in addition, these coins are expected to be held in a long-term trust with a requirement that fees earned from managing such vehicle be reinvested in other product and service lines intended to benefit the Hedera ecosystem and the adoption of Hedera Hashgraph technology generally.
- Some distributions under Hedera Programs, depending on the nature of the program and specific grant, are subject to various use limitations, such as restrictions on ownership transfer.
- The HBAR Foundation will have autonomy over the administration, development, and deployment of its subsequent hbar distributions in providing grants to developers, startups, and others to accelerate the development and adoption of the Hedera network. It is expected that the HBAR Foundation will disclose additional information regarding their subsequent distribution schedules in the future.
- Liquid Supply
Liquid Supply consists of the portion of Released Supply that is controlled by a member of the public and is not known by Hedera to have limitations on ownership transfer.
- Operational Supply