The Hermez Network token (HEZ) launch has sparked great interest and in the days after the launch we have received many questions regarding the liquidity, token allocation and vesting.
First of all, we have received many questions regarding where the liquidity for the pool originated, how it was initially seeded. The answer is: from us and our long-term investors! We provided 4.15M USD in ETH (10 000 ETH) to provide liquidity for HEZ, the lifeblood of the network, and not for raising funds. This brings us to pointing out a particular issue that is truly shameful that we have to mention, and shows how low the level of standards for crypto tokens is at the moment: we are well funded and we did not release the token in order to then sell our holdings to the open market for a quick profit (what came to be known as “rug pull”).
Secondly, the vesting you can see in the whitepaper is to ensure the Founders, the Team and the Strategic partners are on board long term. This vesting will kick in once the network is live and no Founders nor Developer team have received ANY of these tokens yet. They are free to buy them in the liquidity pool if they wish to do so.
The Smart Contracts loaded with the vested tokens can be found here, here, here and here.
The rest of the tokens are held by the project and are part of a reserve destined for various purposes: 1) Rewards for onboarding assets to Hermez, 2) Strategic Partnerships, 3) Token Economy and Hackathons 4) Promotion reserve and 5) Legal and emergency reserves.
Hermez will NOT sell these tokens to the open market. The only exception would be the emergency reserves, should there be such an emergency that cannot be covered with the project’s own funds - a situation we hope never has to arrive. After the initial bootstrap period (est. 1-2 years), this pool will be reallocated as the governance will not depend anymore on the Bootstrap Council and will either dissolve and let the protocol run automatically, or a Hermez DAO will be formed.
The whitepaper states that the initial circulating supply will be 8.25 Million. Currently, as of the 23rd of October 2020, the liquid circulating supply is 3.2 million. 3 Million tokens were released in Uniswap, and 200k in Balancer. By launch, Founders, Team and Strategic Partners will have their 1st unvested tokens, bringing the circulating supply to 8.25 Million.
We understand the importance of the liquidity of the token on the decisions that the community might take. Therefore, we are going to update information on the release of these tokens by the project.
Stay tuned with our progress towards Layer-2 scaling on Twitter under the handle @Hermez_network and sign up for Telegram updates here.