Thread by @trondbjoroy

1/13 I’ve seen a couple of “burn tokens, premine bad” comments on the $HTR tokenomics. Are these valid concerns that the team should listen to or baseless criticism from impatient investors hoping for a quick pump? Let’s look at facts and arguments. @HathorNetwork

📖 a thread 📖

2/13 Circulating $HTR supply at the moment is 181m with total supply at 869m (∞ due to mining rewards, like ETH). For numbers updated in real-time, see api.economics.hathor.network/status

3/13 1b $HTR coins were premined at the genesis block in January 2020, with the following allocation:

4/13 The team recently burned 20% of the premine, and locked up an additional 18% (360m $HTR in total) for the next 5 years. These vaulted 18% will be re-evaluated and burnt in full or partially if they aren’t deemed necessary for the project's growth and support.

5/13 Emission is quite high now but will be reduced each year until reaching a yearly inflation rate at around 1%. Mined tokens are subject to yearly reward halvings, occurring each year until reaching 8 $HTR per block (32 now).

6/13 Another important counter-inflationary measure is the concept of token lockups when minting custom tokens. For each 100 units of custom tokens minted, 1 $HTR is locked up. So the more projects build on Hathor, the more HTR will be taken out of circulation.

7/13 Being a new L1 in need of adoption, a large amount of the premine has been allocated to ecosystem growth. Tokens are used to pay new hires and advisors, R&D, bounties, listing fees and liquidity, and for buying services from others. $HTR

8/13 My personal opinion is that the argument for token burn is stronger with “simpler”, straight forward ERC projects with a limited use case, where it’s actually possible to predict and map out the need for tokens for the next 1, 2, or 5 years’ time.

9/13 Just for comparison and to illustrate why total supply is mostly a meme when it comes to price:

✔️ $DOT 961m circ, 1042m total/ $27b MC
✔️ $ADA 32b circ, 45b total, $28b MC
✔️ $ETH ∞ total
✔️ $DOGE 128b circ, ∞ total, $6b MC
✔️ $HTR ~800m circ by 2031

10/13 $HTR has so much room to run… Simply saying that premine is bad, burn it, is far too easy without fully understanding a team’s strategy and future plans. Which none of us do. If mass adoption happens who’s to say how a potential token shortage could affect the ecosystem.

11/13 Rather than hoping for another burn at this stage, just to create a temporary sense of confidence and reliability among investors, I choose to look at what the big 🧠 team has delivered so far, and their roadmap.

12/13 Based on that I trust them to be in a much better position than myself to judge what is best for $HTR today, and 5-10 years from now. I’m all for pumps but not at the expense of healthy and long term growth for the Hathor ecosystem.

13/13 So to tokenomics critics (feel free to tag them) and those with experience from other projects—for an L1 POW project with Hathor’s ambitions, and $HTR being a utility token, what are the pro-burn arguments aside from wanting short term pumps?