Hbar Coin Release
Discussion: After much anticipation, the Hedera Hashgraph distributed ledger platform is finally ready for primetime use on September 16th, 2019. The first day of availability of the platform and its hbar coin is called Open Access, or OA. At this time developers and users will be able to transact on the Hedera network using hbars as the utility token.
Additionally, all investors in the Hedera network will receive a portion of their total allocation in the simple agreement for future tokens (SAFT) at OA. The exact number of hbar coins and their relative distribution in time is the subject of this article. Per report, there are dozens of decentralized applications that are ready to deploy at OA and hundreds of projects building on Hedera as well.
Hbar SAFT Fundraising: Hedera Hashgraph raised nearly $124 million USD in funds beginning in 2017 to 2018, in three separate hbar SAFT agreements, each with unique pricing, schedules of release and terms. In each round a regulatory-compliant method was used to collect fiat in US dollars or bitcoin, called a simple agreement for future tokens (SAFT). This was chosen in lieu of an hbar initial coin offering (ICO) that would have drawn much more uncertainty and risk in regard to the Securities Exchange Commission (SEC) per Hashgraph administration.
Hbar SAFT 1: The earliest seed investors participated in the first round of SAFT fund raising paying less than $0.005 USD per hbar coin and raised a total of approximately $3M USD. This round included a total 4 year lockup from main net launch and allowed for 20% release starting at Open Access, or Day 1 of hbar availability.
The release schedule was subsequently changed by a majority vote of the investors in August 2019 to 1% release on Day 1, 1% release on Day 8 (1 week later) and then a steady daily/weekly/monthly release for the rest of the year of the remaining 90%.
Total SAFT 1 paid: ~$3M USD for ?890M-1B hbars @ ?$0.0035 USD/hbar.
Total SAFT 1 released on Open Access: ?9-10M hbars
9-10M hbars @ $0.12 = $1.2M USD on Day 1
Hbar SAFT 2: The second round of seed investors paid $0.005-0.006 USD per hbar and raised $17.5M USD in early 2018. The release schedule was similar to SAFT 1 but was also revised by vote. The new release will disperse
Total SAFT 2 paid: ~$17.5M USD for ~3.4B hbars @ $0.005-0.006 USD
Total SAFT 2 released on Open Access: ?170-184M hbars
~184M hbars @ $0.12 = $22M USD on Day 1
Hbar SAFT 3: The third round of investors included both accredited and institutional investors. This round raised $104M USD through two hbar purchasing options.
In Option 3a, investors could purchase hbars at $0.12 USD with a release schedule of 20% on Day 1 and 10% per month for the following 8 months.
In Option 3b, investors could purchase hbars at $0.096 USD with a release schedule of 20% on Day 1 and 20% every following year for 4 years.
Total SAFT 3a/b paid: ~$104M USD for ~922M hbars @ $0.096 – $0.12 USD
Total SAFT 3 released on Open Access = 185M hbars
~185M hbars @ $0.12 = $22M USD on Day 1
Total SAFT 1, 2, & 3a/b paid: $124.5M USD for 5.1B hbars
Total SAFT1-3 release on Open Access: 380M hbars @ $0.12 = $45.6 USD
Advisors/Vendors: As with all startup fundraising, shares or tokens are distributed to those that contributed early in the development of the Hedera Hashgraph network as a method of financing. According to Hedera’s statements, a total of near 2M hbars were utilized for vendor services, advisors and other contracted services.
Community Earn Programs: With the network in beta throughout the past 6 months or so, many individuals in the community were able to create wallets after KYC and earned hbars for various tasks. The earliest program was a micropayment beta test using websites and the Hedera Chrome Extension wallet. Users were able to read articles and were debited 5 hbars per article read. The first round of testing allowed earnings up to 1000 hbars.
The second round of testing also included micropayment testing with web-based articles and the Hedera browser wallet. In total, approximately 8-10M hbars were earned and transferred to users’ wallets in early to mid 2019. A total of 208M are slated for release with earning programs for 2019. Additionally, 1B more hbars are allocated for community testing and earnings programs to be announced at a later date.
Total Community Earned hbars and released in circulation: ~8-10M hbars
Total Community Earnings Program allocated: 1.2B hbars
It is important to note that although the Community allocated hbars are included in the official announcement of Hedera Hashgraph token release, the vast majority are not going to be in circulation on Day 1 at Open Access. This will certainly alter initial market cap analyses until the entire amount is fully released into active circulation.
Grand Total Circulating hbars DAY 1: Based on the latest updated hbar coin release schedule, and recently published numbers according to Hedera Hashgraph administration, the final hbars on Day 1 should be as follows:
Day 1 – Circulating Supply hbars: ~589M
SAFT 1 & 2 = ~ 194M hbars
SAFT 3a & 3b = ~ 185M hbars
Community Earn = ~ 208M hbars
Vendors/Advisors = ~ 2M hbars
Total = 589M hbars
This does not include the 1B additional in allocated Community Earn Programs.
Day 8: At the end of week 1 after Open Access, Day 8 will see an additional 1% from SAFT 1 investors and 5% from SAFT 2 investors according to the new release schedule. A total of 205M hbars will enter the market due to the new release schedule and additional hbars spent with service vendors and advisors.
Day 8 – Circulating Supply hbars: ~795M hbars
Day 1 Circulating Supply: 589M hbars
Day 8 Released: 205M hbars
Total hbars Week 1: 795M hbars
End of Year 2019: Based on the revised hbar coin release schedule, the total released over the remainder of 2019 after week 1 of Open Access will be nearly 1.9B hbars on a continual basis. This will include seed/SAFT investors, vendors, Hedera team tokens, development funds and Treasury releases.
EOY 2019 – Circulating Supply Additional Release: 1.9B hbars
Total Circulating Supply EOY 2019: ~2.7B hbars
Day 1: 589M hbars
Day 8: 205M hbars
EOY ‘19: 1.9B hbars
TOTAL SUPPLY 2019: 2.7 B hbars
This supply could expand to 3.7B hbars by EOY 2019 from Community Earnings programs, but is felt much more likely to take a few years to release the additional 1B hbars thru earnings programs. This has much to do with the KYC process involved, slower adoption relative to anonymous accounts without KYC, etc.
Open Access is less than a week away at the time of this writing. Subsequent changes to release schedule are a possibility going forward according to Hedera Hashgraph. Until then, the market will have to willingly absorb the ongoing supply of hbars in order to maintain a consistent and ascending hbar price.
It is possible that if Hedera Hashgraph gains the adoption it hopes for in the next 1-2 years, then the network could outgrow the supply in total value with the multitude of reported dapps available after OA. Any changes in the ongoing supply going forward will be update here. Considering the revision in the token release, hbars should have a more limited supply at OA, which could certainly affect the hbar price at Day 1 and by end-of-year 2019.