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:
- Allocation and Distribution of HFT
- HFT Release Schedule, Liquidity, and Issuance
- Community Incentives:
- NFT Rewards
- Trading Rewards
- NFT Staking Rewards
- Market Making Rewards
- LP Rewards
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:
- Core Team (19%): Founding team members and engineers that designed, developed and deployed the Hashflow protocol
- Investors (25%): Early backers and investors that provided the initial runway to help launch the protocol
- Ecosystem Development (56%): This is a catch-all bucket that includes the community treasury, rewards for early community members and users, and an allocation for market makers that helped provide the initial liquidity in Hashflow
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:
Within Ecosystem Development, HFT will be distributed to the following sub-categories:
- Community Treasury (31.25%): Funds that can be activated and deployed via governance as decided by HFT holders
- Early Community Rewards (6.75%): Retroactive rewards for early users and participants in Hashflow (see below for more distribution details)
- Future Hires (4%): Core team members that will join and contribute to the protocol after HFT launch
- Ecosystem Partners (14%): Early integrators as well as designated market makers (DMMs) who will help provide liquidity on centralized exchanges will receive an allocation as follows:
- Early integrators (8%)
- DMMs (6%)
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.
Tokens issued to the core team, investors, market makers, and the community will be subject to the following vesting schedules:
- 25% vested after a one-year cliff
- 25% linear vesting for each of the subsequent 3 years
Investors and Market Makers:
- 1 year cliff followed by 200-day linear vesting (weekly)
- HFT loans; no vesting or lock-up
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:
- 6% lent to DMMs to provide liquidity via HFT loan agreements
- 6.75% available to be claimed as part of early community rewards
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.
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:
- Traders: 0.25% of the total HFT supply each month, 0.0625% distributed weekly
- Market makers: 0.125% of the total HFT supply each month, distributed monthly
- Liquidity providers: 0.125% of the total HFT supply each month, distributed monthly
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
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
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
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