📊Tokenomics

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

HDG token 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.

Target HDG emissions for the 1st year after launch

Target HDG emissions 6 years after launch

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

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.

$$f(n) = \int_{0}^{n} \frac{2000000}{\frac{365}{log(2))}}* \frac{1}{2}^{\frac{x}{365}} dx$$