A week ago, Hedera opened access to the beta version of our mainnet, with 26 dapps going live. The mainnet has been performing as we expected, with millions of transactions conducted, and no unexpected downtime. Below are a few usage statistics from our first week:
- Over 2.2 million transactions conducted on the network during the past week (and 5.4 million conducted since dapps began conducting transactions on the network on August 17, 2019).
- We have been seeing steady network usage around 3 or 4 transactions per second (TPS), with periods of many hours that are consistently processing 7 or 8 TPS, and even multi-hour periods of processing 9 or 10 TPS (to be clear, the network is capable of processing more transactions; these numbers are the actual use we are seeing).
- The time to finality across transactions has consistently been around 2-3 seconds. This is the time from when the first node receives a transaction until another node on the other side of the world knows the consensus, with 100% certainty. We believe this is among the fastest in the industry today.
- As expected, these are mostly cryptocurrency transactions, with some smart contract and file transactions mixed in.
- The ongoing status and performance metrics for the network can be found at:
The Hedera network is delivering the performance that we believed and stated it would. We continue to work with dapps as they conduct a growing number of transactions on the platform.
While we are thrilled with the technical performance of the Hedera network, we understand that our community has a number of questions about the token economics. We are undertaking the following measures to clarify some of the questions posed, and improve stakeholder education:
Day 1 and week 1 distributions were successfully delivered to those who created their mainnet accounts on time. The first distribution of over 1,000 payments achieved consensus in less than 2 seconds. The next distributions will be as follows:
- SAFT 3A holders will receive their next distribution on October 16th. In total, SAFT 3A and 3B holders have received 180 million coins to date.
1 and2 holders will receive their next distribution on October 22nd. In total, SAFT 1 and 2 holders have received 373 million coins to date. (Updated 10/15/2019) More information regarding SAFT 1 & 2 amendments can be found here: https://help.hedera.com/hc/en-us/articles/360002789198
This differs slightly (by 19.6 million coins, or 3.4%) from what was provided in our hbar economics paper, because a few SAFT holders who are due coins have not set up their accounts.
Of the 450 million coins that Hedera has set aside for Treasury sales in 2019, Hedera has no current plans to sell in 2019. The council will make any decisions on Treasury sales, and those amounts will be communicated to the market ahead of any sales out of Treasury.
Removing Undistributed Community Earn Program Tokens from Circulating Supply
In addition, the hbar economics paper (page 13) notes that 1.2 billion tokens were set aside on Day 1 for Community Earn programs. These were divided into two categories – those allocated under Hedera’s own community testing program (208 million) and those set aside for a third party earn program (1 billion).
Of the 208 million allocated for Hedera’s programs, ~16 million has been distributed, completing Hedera’s obligations under our own community testing program. That program has now been paused, and there is no current plan to distribute the remainder of the 208M tokens from that program. We will let the community know in advance of any additional testing programs that are opened in the future.
In addition, the 1 billion tokens allocated to additional earn programs is not expected to be issued in 2019. These earn programs will also be communicated to the market before they begin.
Re-evaluating Hedera’s Token Economics Model
We are evaluating whether the token economics model has the right incentives for developers to develop on the network. We are taking the following actions:
- We are working with Prysm Group to re-evaluate every aspect of our token economic model. Founded by Harvard trained economists, Prysm Group is an economic consulting firm specialized in the distributed ledger space. The firm has assisted many organizations in understanding how to optimally structure distributed economic systems. Its Founding Economist, Dr. Cathy Barrera, also serves as the Lead Contributor to MIT’s Cryptoeconomics Lab. This team will be advising the Hedera Board of Managers on a plan that enables the long-term well-being of the network and associated cryptocurrency. Any and all aspects of the token economics model are on the table. If there is any misalignment, we are committed to taking remedial actions necessary to improve them. As always, we welcome ideas and proposals from the community, and will make sure these are brought to the Prysm Group. Please send ideas to [email protected]
- The Hedera Governing Council has created a growth committee that will oversee funds set aside for incentive programs to accelerate adoption and utilization of the network.
- We are scheduling 1-on-1 calls with key stakeholders, in order to educate them on our efforts.
- We are in the process of finalizing the date for our first Stakeholder Summit in New York. There executives will share the Hedera network roadmap and updates with invited community members, and feedback from this meeting will be brought to the Hedera Governing Council’s next meeting on December 11th.
While the value of the network will be driven by the applications that developers continue to bring to market on top of it, we were responsible for the creation of both the network and the economic model to catalyze that development. If we find mistakes in either, it is our responsibility to fix them. We are committed to doing what it takes to make sure the model is properly aligned to foster widespread developer and user adoption of the platform, and to demonstrating that we deserve the trust you placed in us to get that right.
We hope that this post highlights some of the immediate steps we are taking regarding additional tokens entering the market as we reevaluate the best model moving forward to deliver on Hedera’s long-term vision and mission.
We continue to believe that focusing on the long-term growth of the network is critical to our success. As such, the rest of our team is focused on:
- nurturing and supporting application development,
- making it easier for developers to build on the network through community education, engagement, and the creation of additional developer tools,
- supporting existing Hedera Council members and other companies in their exploration of enterprise use cases for Hedera,
- recruiting additional Hedera Council members to enhance the industry’s most decentralized governance model, spread geographically and by industry, and;
- delivering additional features beyond what was initially promised, such as the Hedera Consensus Service (HCS), which will be available with Version 1.0 of the platform.
Thank you for your support.