šŸ“ŠTokenomics

Hedge tokenomics

Token utility

The Hedge protocol issues 2 protocol tokens - USH and HDG. USH is an overcollateralised stablecoin issued by locking up collateral and as such has a varying supply over time. HDG is the protocol token. At launch, users may stake HDG to earn portion of protocol fees, which are taken during loan initiation - this model may change as the protocol matures and HDG is used for governance.

HDG distribution

There are a total of 10M HDG tokens.

60% of all tokens are allocated to the community, with 45% of the total tokens given out as liquidity & stability mining incentives. 5% of the total is given out as community rewards which include incentives for integration and potential airdrops. 10% of the total is kept aside for the Hedge Treasury. A portion of the Hedge Treasury will be staked to generate revenues for the team and community, though Hedge will ensure that the staked tokens do not represent more than 50% of the staking pool at any point in time.

15% of all tokens are set aside for investors - with 10% of the total going to seed investors and 5% set aside for future fundraise if needed. The seed investors have a 18 month vesting schedule after token launch with a 1 year cliff.

25% of all tokens are allocated to the core team and are subject to a 3 year vest with a 1 year cliff.

HDG Emissions

Hedge will start liquidity mining at the same time as mainnet launch. This is the expected emission schedule for HDG token emission over the next 6 years. The stability pool incentives are fixed and halve every year.

| Emissions schedule     | Liquidity Incentives     | Stability Pool Emissions     | Cumulative Total     |
|------------------------|--------------------------|------------------------------|----------------------|
| Month 1                |                   70ā€™000 |                      112ā€™250 |              182ā€™250 |
| Month 2                |                   60ā€™000 |                      105ā€™951 |              348ā€™201 |
| Month 3                |                   60ā€™000 |                      100ā€™005 |              508ā€™206 |
| Month 4                |                   50ā€™000 |                       94ā€™393 |              652ā€™599 |
| Month 5                |                   50ā€™000 |                       89ā€™094 |              791ā€™693 |
| Month 6                |                   45ā€™000 |                       84ā€™094 |              920ā€™787 |
| Month 7                |                   45ā€™000 |                       79ā€™373 |            1ā€™045ā€™160 |
| Month 8                |                   45ā€™000 |                       74ā€™918 |            1ā€™165ā€™078 |
| Month 9                |                   45ā€™000 |                       70ā€™714 |            1ā€™280ā€™792 |
| Month 10               |                   45ā€™000 |                       66ā€™745 |            1ā€™392ā€™537 |
| Month 11               |                   45ā€™000 |                       62ā€™999 |            1ā€™500ā€™536 |
| Month 12               |                   40ā€™000 |                       59ā€™464 |            1ā€™600ā€™000 |
| Year 2                 |                  500ā€™000 |                      500ā€™000 |            2ā€™600ā€™000 |
| Year 3                 |                  400ā€™000 |                      250ā€™000 |            3ā€™250ā€™000 |
| Year 4                 |                  300ā€™000 |                      125ā€™000 |            3ā€™675ā€™000 |
| Year 5                 |                  200ā€™000 |                       31ā€™250 |            3ā€™906ā€™250 |
| Year 6                 |                  200ā€™000 |                       15ā€™625 |            4ā€™121ā€™875 |

Stability Pool Emissions

A total of 2M HDG tokens will be emitted over the total lifetime of the Hedge contract. Emissions are dictated according to the following half-life formula, where f(n) represents the total amount of tokens emitted on day n after launch.

f(n)=āˆ«0n2000000365log(2))āˆ—12x365dxf(n) = \int_{0}^{n} \frac{2000000}{\frac{365}{log(2))}}* \frac{1}{2}^{\frac{x}{365}} dx

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