Introducing

The Hashflow Token

The Hashflow Token (HFT) is the protocol’s governance token.

We are planning to deploy the HFT token contract in January 2022, at which point it will be distributed widely to early users and contributors to Hashflow. In this post, we will detail the following:

Background

When we launched Hashflow earlier this year, we set out with a vision of solving the capital efficiency problems inherent to AMMs, thereby creating a better DeFi trading experience. We believe that in order for DeFi to reach its full potential, it needs to leverage the pricing efficiencies of the global market. To achieve this goal, we brought institutional-grade liquidity and pricing strategies from professional market makers on-chain via Hashflow.

By coupling the best of CeFi and DeFi, Hashflow offers traders tight spreads, zero slippage, and an MEV-resistant trading experience. Now, only 6 months later, users have already traded over $1.3 billion on Hashflow. 

To build upon this early success, today we’re taking the first step to further decentralize Hashflow. Moving forward, HFT holders will be responsible for collectively governing Hashflow and stewarding the treasury.

Allocation and Distribution of HFT

HFT will be an ERC-20 token deployed on Ethereum mainnet. At genesis, the total HFT supply will be 1,000,000,000 (one billion tokens).

In deciding how to best decentralize ownership of HFT, we recognized that parties external to the Hashflow founding team and investors should own the majority of the protocol. As such, the community and ecosystem partners will receive 56% of the HFT genesis supply, and the core team and investors will receive a total of 44%:
At genesis, HFT will be distributed as follows:
Over time, the Ecosystem Development allocation will increase to 68% via inflationary token emissions (more details below). 10 years after token launch, the token supply will look as follows:

Ecosystem Development

Within Ecosystem Development, HFT will be distributed to the following sub-categories:
The goal of the above distribution is to ensure that early community contributors and market makers who helped bootstrap the protocol get an allocation commensurate with the founding team’s allocation. 

The lion’s share will then be allocated to the community treasury to encourage HFT holders to participate in governance and work with early contributors and backers to steward Hashflow.

Release Schedule

Tokens issued to the core team, investors, market makers, and the community will be subject to the following vesting schedules:
Core Team:
Investors and Market Makers:
DMMs:
Community Rewards (NFT, Trading, Market Making, LP Rewards):
HFT distributed to the community treasury will not be subject to vesting and may be used by the community to fund projects in the Hashflow ecosystem via the governance process. For more information on the community treasury and governance process, please reference the documentation.

Liquidity at TGE

At TGE, 12.75% of the initial token supply will be liquid and potentially available on the open market. This includes:

Additional Issuance of HFT

After 4 years, HFT will have an annual issuance of 5% at steady-state. These tokens will be deposited directly to the community treasury, and then allocated towards various incentive programs. In the future, if HFT holders wish to change the issuance schedule, they can do so via governance.

The chart below shows how the additional token issuance will impact the token allocation over time. Note that after 3 years, the core team and investors’ allocations will continue to be diluted in perpetuity. The goal is to ensure that early contributors are rewarded appropriately, and that the community collectively gets to decide how funds are allocated moving forward.

Projected Allocation (% of Total Supply)

Projected Allocation (# of HFT)

Community Treasury Reserves (% of Total Supply)

The following chart shows how HFT within the Community Treasury will be disbursed over time via community incentive programs which will be covered in more detail in the next section.

Community Incentives

As mentioned earlier, the largest slice of the initial HFT supply (56%) has been allocated towards the ecosystem to incentivize usage and to fund development and growth of the protocol.

Out of this tranche, initial community incentives will be distributed as follows:

Retroactive NFT Rewards

On-going Community Incentive Programs

The remaining 31.25% of HFT allocated for the community treasury will be distributed via the following incentive programs:
Note that while the core team has initially seeded the mechanics to distribute HFT to traders, LPs, and market makers, the Hashflow community can submit a governance proposal at any point to change the amounts distributed towards community incentive programs.

Rewards Timeline

Currently, Hashflow is in Open Beta. This means that traders and community members can continue to receive rewards according to the Open Beta Rewards Program. The Open Beta phase will continue to run until 1 week before HFT token launch (currently slated for January 2022).

In addition to the Open Beta rewards, starting December 20, 2021, traders, market makers, and liquidity providers are also eligible to receive rewards as part of the community treasury distribution programs. However, these rewards will be distributed retroactively once the HFT token is live.

Traders, market makers, and LPs will receive rewards starting this week as follows:

Trading Rewards

0.0625% of the total HFT supply (625,000 HFT before inflation) will be distributed to traders on Hashflow every week without restrictions or lock-up. The distribution per trader will be calculated based on relative volume traded across all Hashflow assets, which will be assigned a HashScore.
The distribution per trader will be calculated based on relative volume traded across all Hashflow assets, which will be assigned a HashScore.
For more detailed information and formulas used to calculate traders’ distributions, please reference the documentation.
$$w = weight \space of \space the \space token$$ $$v = volume \space traded \space by \space a \space user \space for \space a \space token$$ $$V = total \space volume \space traded \space by \space all \space user \space for \space a \space token$$ $$t = token \space index$$ $$weekly \space hashscore \space (hs_w) = \sum_{t=0}^n {w_t \times v_t \over V_t }.$$

NFT Staking Rewards

Hashflow NFT holders can stake their NFTs. Each NFT belongs to an NFT Category (Category 1 or Category 2) and when staked, adds a multiplier to their Weekly HashScore. When staked, each Category 1 NFT will provide a 15% increase to the Weekly HashScore and each Category 2 NFT will provide a 5% increase. Multiple NFTs may be staked simultaneously to increase the multiplier effect up to a maximum of 1,000%.
Here are some examples of how staking NFTs could increase your trading rewards.
Also, if you haven’t received any Hashflow NFTs yet, there will be more that are yet to be distributed. Since Hashflow is still in Open Beta, all contributors still have a chance to earn NFTs via trading, community participation on Discord and Twitter, and other contributions to the community.

For more details around the formula by which NFT rewards will be calculated, please take a look at the NFT rewards section in the documentation.

Market Making Rewards

A total of 0.125% of the total HFT supply (1,250,000 HFTs before inflation) will be reserved for market making rewards each month.
For more details around the formula by which market maker rewards will be calculated, please take a look at the market maker rewards section in the documentation.

LP Rewards

A total of 0.125% of the total HFT supply (1,250,000 HFT) will be reserved for passive liquidity providers. This amount is distributed pro-rata every month based on a LP HashScore.
For more details around the formula by which LP rewards will be calculated, please take a look at the LP rewards section in the documentation.

Looking Forward

The launch of HFT will be followed by the establishment of a governing body which will represent the collective group of HFT holders that will make decisions around the Hashflow protocol.

For example, one major decision point could be around turning on network fees. Currently, Hashflow collects zero fees from traders, but governance could potentially decide to introduce revenues for the protocol, which it could add to the treasury and spend at its collective discretion.

Looking further ahead, we will fully transition to a community-led effort for Hashflow’s growth and development through voting with HFT. This will ensure that all stakeholders play a part in ushering in the next era of DeFi.

We’re incredibly excited for what’s to come in 2022, and we look forward to continuing this journey with our amazing #hashgang. If you haven’t yet, join our community on Discord!

Usher in the next era of DeFi.

The HashDAO will enable a community-led effort for Hashflow’s growth and development through voting with HFT.
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