When the HBOT token was launched in December 2022, Hummingbot Foundation enacted a delegation system to allow locked-up token holders to be able to vote their tokens, since 60% of the token holders had one-year lockups. The locked tokens, which belong to individual team members at CoinAlpha and Hummingbot Foundation, as well as CoinAlpha investors and advisors, are stored in different vesting smart contracts unique to each locked HBOT holder. Holders can delegate their voting powers to another address, which has that additional voting power added to their own in Snapshot. The delegation system is all-or-none, meaning that locked up holders have to delegate all their voting power to a single address.
While the delegation system enabled past stakeholders with experience with Hummingbot to exercise their influence over governance, it also meant that the entire 600 million team/investors portion of the token supply could vote their full token amounts, while only 40 million of the remaining 400 million community tokens were distributed initially, and circulating supply currently stands at 60 million. The team and investors holding HBOT have effectively had a 10:1 voting power advantage vs the community during the first year of the Hummingbot Foundation’s life.
After the lockup period expires on December 17, 2022, team and investor tokens begin to release linearly, so those holders can release the unlocked portions to their beneficiary wallets and begin voting without delegation. This means that the HBOT delegation system is no longer needed and can be terminated after that date.
Therefore, the Foundation proposes that the HBOT delegation system be terminated on or before March 1, 2023. On this date, there would be a healthy balance of community, team, and investors tokens circulating.
Assuming a 20 million increase in circulating supply due to expected community allocations between now and then, the total circulating supply on that date would be 158,927,228, with the following breakdown:
- Community: 80,754,062 (50.8%)
- CoinAlpha team and advisors: 14,255,642 (9.0%)
- CoinAlpha investors: 63,496,354 (40.0%)
- Foundation team: 421,170 (0.3%)
The CoinAlpha team, advisors, and investor tokens are held by 121 individual wallets, and the largest holder will have 21,952,169 tokens (13.7% of circulating supply) on March 1, 2023.
Since the goal of Hummingbot Foundation is to enable a decentralized community-maintained open source codebase, we believe this change will give the community more governance power.
Vote on this proposal: Snapshot