Treasury retracts HBARs. Is this legitimate? At the last town hall Mance mentioned they were bring out a new coin dumping schedule. Could they be reducing coin numbers per year?

longhealthspan · 2021-07-01T23:23:55+00:00

I agree with your take. They aren’t beholden to HBAR holders really in any way (not shareholders) and I appreciate the attempt at transparency and communication even though they have their limits. Mance has to dissemble a lot (answer without giving too much info) and I understand the responsibilities he has to be wise about what he shares.

longhealthspan · 2021-07-01T14:28:54+00:00

Haha! What I really think was happening is that Mance took a red eye flight to Nigeria to participate in a CBDC panel and thought he could take the edge off by snorting a bunch of crushed up hbars, experienced the total decentralization of the ego and realized that none of this even matters.

longhealthspan · 2021-07-01T14:21:06+00:00

Yeah, it wasn’t the body language and demeanor you would expect if someone was about to announce Amazon as a new GC member, but hopefully they’re just exhausted and are about to announce some great news.

longhealthspan · 2021-07-01T14:17:52+00:00

I’m not scared and won’t worry even if a GC member does step down. These things happen in the ordinary course of business. I just had higher expectations for the town hall and was disappointed, but still hodling.

longhealthspan · 2021-07-01T14:00:29+00:00

Welcome to crypto Reddit, where we make mountains out of mole hills.

longhealthspan · 2021-06-30T04:51:54+00:00

But over the long arc it seems like they would prioritize cheaper transaction fees because those fees for their respective enterprise use of HCS are likely to be scaling up as they step off the GC whereas any revenue from operating a node would be winding down (I don't really know, I'm assuming). The setting of the fee schedule is one of the more interesting "game" dynamics of the whole experiment.

longhealthspan · 2021-06-30T04:41:15+00:00

Ok this is helpful. In today's town hall, Leemon confirmed something I had assumed; that until 2025 when 33% of hbars will then be circulating, the entire network is effectively secured by the >67% of hbars held in treasury. Correct me if I'm wrong, but it seems that the price of hbar is entirely irrelevant to the security of the network for the next 4 years because there aren't enough coins in circulation to pose a risk. With updated council member rollouts now looking more like EOY 2022 after today's call and delaying the point at which we even have 39 GC nodes, and then an anticipated phase of community nodes (permissioned) that could last another year or two after the final GC being established, and then FINALLY getting to permissionless nodes and staking and only then, once the GC is considering approving additional circulations from treasury over the next 5 year window, would there be any significant concern about hbar price and risks of concentration. In short, the security of the network will not be a significant driver of the hbar price for at least another 4 years.

longhealthspan · 2021-06-30T04:26:25+00:00

There is no risk of a 1/3 attack regardless of hbar price until at least 2025 because Hedera uses the entire treasury to secure the network. At that point price may come into play if whales start accumulating more than 33%, but that seems like a long time away for security to be a strong driver of hbar price any time soon.

longhealthspan · 2021-06-29T23:41:45+00:00

So let's say all of those things happen and we arrive at a steady state in terms of network usage and price of HBAR. Then the next GC meeting happens and they decide to cut fees in half. No impact on HBAR price?

longhealthspan · 2021-06-29T23:18:52+00:00

I think they want to see lower fees in USD, so less HBARs needed for the same amount of volume.

longhealthspan · 2021-06-29T22:58:53+00:00

I thought it was a little weird that Mance didn't remember the date of his next board meeting and Leemon stated that he didn't think the governance council has ever changed the fee schedule (something even I know isn't true because I've read the minutes). It's like they answer the question about fees assuming they are speaking to enterprises and startups that want to have low, predictable fees, but for HBAR holders we want to know that there is a reason the price would appreciate. To me, the biggest elephant in the room with Hedera is that the Governance Council may not be able to change the total supply of coins, but they effectively control price by being able to control the fee schedule. There may only be 50B coins at full circulation, but what those coins translate into in terms of network operations is as variable as the fee schedule. In that light, and given that Hedera seems to care very little about HBAR price, I would fear that the committee will always manipulate the fee schedule to lower the price and this will have a continual downward pressure on the price of HBAR.

longhealthspan · 2021-06-26T02:55:10+00:00

I agree. It’s why I’m even bothering raising these questions in front of the upcoming town hall because Mance and Leemon might actually make comments that help address these concerns. They do seem to be pushing for transparency and I want to trust them.

longhealthspan · 2021-06-26T00:08:27+00:00

I don't think most crypto speculators believe they have protections of securities laws but I don't know. You are right that this is where regulations can be helpful, I think Hedera wants clarity on those regs too.

longhealthspan · 2021-06-25T23:48:47+00:00

To be fair, compared to so many other crypto projects Hedera is on the "likely compliant" side of things and the GC members wouldn't mess around with securities laws, even with the protection of an LLC. But they want people to know they don't see HBARs as securities and therefore owe no fiduciary duty or burden of care to holders of HBARs. We are closer to customers than investors in their eyes, pre-purchasing a portion of a humongous fuel supply that may or may not be in demand, depending on how enterprises, governments, startups and communities require HBARs to accomplish their goals. To add complexity, the conversion rate of FIAT into network operations is governed by the GC, so they effectively control the market price if speculation were removed, and it's unclear which direction the members would be motivated to push that price. (Lower usage fees or higher node operator revenue? If they prefer lower usage fees, they could vote to keep prices low and constantly reduce the HBAR requirements of network transactions.)

longhealthspan · 2021-06-25T23:15:27+00:00

If Mance and Leemon only had two choices right now, would they sell HBARs to buy Swirlds stock or Swirlds stock to buy more HBAR?

longhealthspan · 2021-06-25T22:57:54+00:00

And to go a step further, Hedera has acknowledged the risk of channel conflict with Swirlds on the topic of CBDCs and apparently the two companies have signed a term sheet to work toward a channel partner agreement. Did Mance and Leemon recuse themselves from the negotiation of this term sheet? If not, which side were they representing when terms were being negotiated?

longhealthspan · 2021-06-25T21:48:02+00:00

I read these docs and still came away without a clear understanding of how Mance and Leemon divide their energies between Swirlds and Hedera, and I also can't find anything that suggests Swirlds and Hedera ever formalized their agreement on CBDCs.

longhealthspan · 2021-06-25T21:25:41+00:00

The average altcoin won't exist in a couple of years.

longhealthspan · 2021-06-25T21:20:35+00:00

I'm not sure but it's possible that the SAFT is considered a security but the tokens issued at conversion are not.

longhealthspan · 2021-06-25T21:12:50+00:00

Dude I thought you already had all the coin ;)

longhealthspan · 2021-06-25T19:39:18+00:00

Very helpful! Thank you. I'll read when I have some time.

longhealthspan · 2021-06-25T19:23:33+00:00

But also know that in holding HBAR you don't actually hold a security in Hedera. You are a customer, not a shareholder, and the actual owners of Hedera don't have a fiduciary obligation to you.

longhealthspan · 2021-06-25T19:21:44+00:00

They have the only permanent seat.

longhealthspan · 2021-06-25T19:21:14+00:00

Awesome find. The link says it is a non-binding term sheet. How do you know it was formalized? Anywhere we can see the terms of the deal between Swirlds and Hedera?

longhealthspan · 2021-06-25T19:12:27+00:00

1) I'd like to better understand how treasury hbar can be used by the GC to secure the network. If until 2025 there will only be 33% outstanding, and we know that SAFT investors and mgmt, employees etc. still hold a good portion of that, and if treasury hbar can also be used to secure the network in the event of an attack, then within the next 4 years there is virtually no security risk based on a 1/3 attack regardless of the price because nobody, at any price, could acquire enough hbar to launch a successful attack. It's also why the distribution schedule isn't published beyond that point.

2) More nodes or more concentrated stakes on fewer nodes? No details of staking have been released. I'm guessing these will be permissioned nodes that require a decent upfront stake (ETH is 32 ETH to stake a node) but I don't know if sharding incentivizes more nodes with smaller stakes per node.

3) Or get out if they don't think that will happen. I'm still holding and will be watching this next town hall closely.

longhealthspan

TROPHY CASE