Yesterday, Mance Harmon, Co-Founder and CEO of Hedera, provided a quick update on some key milestones, and addressed some of the many questions we have received via Telegram, Twitter, email, and other channels. The video and full transcript of the interview are below:

Hello everybody. Just a few days ago we launched our accredited investor sale, and I’d like to give you a quick update on some key milestones, and address some of the many questions we have received via Telegram, Twitter, email, and other channels.

It is very important to us here at Hedera that we provide you with as much relevant information as we can, so we continue to update our FAQ as we get new questions. Please be careful to protect yourselves from potential scams and security threats, so please visit that link by typing hashgraph[dot]com in your browser, and clicking the FAQ button on the homepage.

First I’d like to say how humbled we are by the enthusiasm we have seen from the community. Currently almost 5,000 people have registered for the sale on our SAFT website which you can navigate to from our homepage. Completing AML/KYC and US accreditation can take 3-4 days, and we appreciate everyone’s patience with the process.

I’d also like to share our key milestones that we expect to hit over approximately the next six months:

Phase 1:

• First, we will complete the current round of crowdfunding. As previously mentioned, we expect this to be the final SAFT for the organization
• Launch the network for limited developer use. At the start of that process, we will mint all 50 billion of the Hedera tokens, which will be held in the Hedera account

Phase 2:

• Announcing the first group of governing members. This will include companies across different sectors and geographies
• Publishing APIs and related educational materials. Developers will receive Hedera APIs for 3 services: cryptocurrency, file service, smart contracts. And we will make available on-boarding education materials via the Hedera developer portal
• Launching the developer and community building and testing program. Dapp developers will earn tokens for building dapps and the community will be able to earn tokens for helping us with testing the network
• Hedera18. Our inaugural developer conference and decentralized hackathon to learn how to build dapps on the Hedera network
• We expect to host an additional event in Asia, which will further highlight the progress we have made and announce additional council members

Phase 3:

• Open account creation. Anyone will be able to create new accounts for themselves or others
• General availability of the Hedera network. Enabling all developers to build and run their dapps on Hedera. In other words, any user can use it
• Finally, Hedera tokens will be released. The tokens will be released on the schedule we’ve previously described, and can be bought and sold, [proxy staked] and used by developers and users of the network

As you can tell, we have a large number of milestones we expect to achieve over the next six months, and we will make public announcements for each of these over that period.  

One of the most consistent questions that we have received is why do we require investors to be accredited according to the US standards for accreditation, and why is the SAFT sale not available in every country in the world?

Hedera is a US-based company, and the crowdsale is being conducted in accordance with SEC regulations as a private placement pursuant to Rule 506(c), which limits participation to accredited investors. We would like to offer the SAFT as widely as possible, yet we are also committed to complying with applicable laws and regulations. Therefore, the SAFT is not being offered in jurisdictions where, based upon the advice of legal counsel, doing so could place either Hedera or investors at risk of violating local laws and regulations, particularly as they relate to securities offerings, offshore investments, or the sale of tokens or cryptocurrencies. Countries where we are regrettably not offering the SAFT include Russia, China, Japan, Vietnam and Malaysia.

Another question we have been asked frequently is about prior rounds of investment in Hedera. At what price was the previous round? Did previous investors get a discount? Is this the same price as the March round?

Previous rounds were at a significantly lower valuation, due to the uncertainty of the project at the time. These rounds included employees & strategic partners, who contributed more than just fundraising as part of the agreement. All agreements have the initial release six months after network launch. Early investors have the rest of their tokens release on a four year schedule, so only their initial 20% will be released in the next year, compared to the accelerated schedule available to current investors.

Also, only a fraction of total supply is being released, with up to 6% of total supply released on day one, and approximately 10% within the coming year. At today’s value, This implies a valuation of approximately 360 million based on circulating supply on the first day tokens are released, and 600 million based on expected circulating supply at year one. We think those valuations are conservative, compared to some other platforms in the market, particularly considering our stage of development.

It is difficult for us to provide an exact price when asked about tokens that were offered to early supporters, because we also must take into account that vendors, strategic partners, advisors and employees will have received tokens at a zero cost, as payment for services or as part of their ongoing compensation plans, as is standard industry practice. Again, including all of these tokens, only up to 6% of the total supply will be released on day one. We are also reserving at least $25 million of tokens at the current price as a reward for developers and for the community who help build dapps and test the network, driving value and utility of the platform.

I’d also like to add that management & employees have invested over $10 million at the current terms and price, showing their belief in the project & what they think of its long-term value.

We’ve also been asked about the governing council, why they hold so much in treasury, and why we are selling only a small percentage of tokens.

The Hedera network reaches consensus on transactions through a token-weighted process, in which a particular transaction becomes final when nodes holding an aggregate of over two-thirds of tokens have validated that transaction. This means that an attacker could disrupt the network by owning or controlling one-third of the tokens. This is the reason we initially have a very slow token release schedule. By having almost 67% of tokens held by Hedera treasury and proxy-staked to trusted nodes (i.e. nodes hosted by Hedera Council members), that attack is prevented. To protect the Hedera network from certain classes of attack, we anticipate that the circulating supply of tokens will remain below 10% of the total token supply for the first year and below 33% of the total token supply for at least five years. Council members cannot engage in self-dealing and use the proceeds of token sales to pay themselves. Funds held by the Hedera treasury--whether Hedera tokens or fiat currency--are not owned by Hedera management or Council members, and cannot be paid out as dividends or profits distributions.

There are many other questions that we have received, and I won’t go through them all here, but please make sure to familiarize yourself with the complete FAQ and to read and watch as much as you can on the Hedera Hashgraph website prior to investing. We are dedicated to a secure and fair digital future for all, and we are committed to building a long-term organization. This is a marathon, not a sprint, and we are excited to take this journey with you to see what future we can build together.

For more information, watch the full announcement and business update video:

https://youtu.be/PEaOGd0XSAo