The Board of Managers worked with the Prysm Group team on a review of Hedera’s coin economics model and proposals from the community. The following constitute findings and proposed actions by the Council:
- Continue to plan to release hbars to the market over a multi-year period, as network utilization grows.
- Differing from the original Hedera coin economics plan, and in line with recommendations from the community, coins from Treasury may no longer all be released on a pre-determined schedule, but instead, discretionary releases may occur as appropriate as the network matures and usage grows. Processes and controls are being developed with this new approach and will be published in subsequent blog posts.
- Adopt a community-generated proposal to improve transparency by providing regular updates on Hedera’s token distribution plans.
- Adopt a community-generated proposal to reduce the number of hbars to be given away through earn programs, and instead use those coins to reward applications that drive network use.
- Continue to prioritize driving network usage and utilization over efforts to highlight proxy staking and grow the number of nodes (including non-Governing Council nodes).
- Not to “burn” – or permanently lock up – any of its unissued coins to reduce overall supply.
- Not to “shake out the supply” by releasing a large quantity of coins in the short term. Doing so could cause a significant drop in the coin value which would be materially detrimental to the development and adoption of the Hedera platform if developers and potential adopters misperceive it as signaling a problem with the project overall.
Above all, Prysm Group’s work confirmed our fundamental thesis that network value will continue to be driven by growth in utilization of the Hedera network. We have always said that the value of the network, and therefore of the hbars, will depend on the third-party applications and use cases that are built on top of it. As we look at the success of early applications on the network and incorporate the findings of the Prysm Group into our learnings, we recognize the continued importance of engaging with developers to help them understand why Hedera is the best public distributed ledger on which to build their applications, and provide them with the necessary resources to be successful. To do so, Hedera will be rolling out a number of new programs in 2020.