# HDG protocol token

HDG tokens are primarily used for revenue sharing. Anyone who stakes the HDG token is able to claim a proportion of all protocol fees. As the Hedge protocol evolves (with new functionality such as accepting different types of collateral), HDG tokens will be used to vote on governance and use of treasury funds.

The protocol, and in turn HDG token holders, earns fees when:&#x20;

* A vault is opened&#x20;
* A vault is liquidated

The HDG token mint is [5PmpMzWjraf3kSsGEKtqdUsCoLhptg4yriZ17LKKdBBy](https://solscan.io/token/5PmpMzWjraf3kSsGEKtqdUsCoLhptg4yriZ17LKKdBBy).

## How to earn HDG

There are two primary ways to earn HDG tokens:

* Depositing USH in the stability pool. The formula for the total amount of HDG rewards released is the following:

`f(x) = 2,000,000 * 0.5^(x/365) / (365/log(2))`, where `x` is the time in days.  This can be visualized [here](https://www.wolframalpha.com/input?i=2000000+*+0.5%5E%28x%2F365%29+%2F+%28365%2Flog%282%29%29+with+x+from+0+to+1000). &#x20;

Effectively, HDG token incentives are large at the initiation of the protocol but will gradually decrease over time. The more USH you deposit in the stability pool and the longer the USH is deposited, the more HDG you are rewarded with.&#x20;

For more detail, please see section A.3.1 [in the whitepaper](https://drive.google.com/file/d/1-W_LlAhpgXgl8rlMJMt8e-ztkHe53c3g/view).

* Staking the HDG tokens on our platform to collect a percentage of the platform fees.


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