Hats Finance ($HAT)- Tokenomics
12th July Edit:
As of 12th July, Hats Finance would like to notify the community regarding a change in tokenomics and strategy. These changes reflect the team’s strategy and desire to align Hats Finance more closely with the mission of DeSec — Decentralized Security.
In order to fully uphold our commitment for decentralization and DeSec, Hats Finance has implemented two key changes to our tokenomics:
Firstly, we’re launching $HAT only on a DEX. Hats Finance believes that providing centralized liquidity for $HAT goes against the DeSec mission. Hats Finance has always envisioned to be as sufficiently decentralized as possible, and concentrating our liquidity on a DEX is more closely aligned to our vision. Overall, we believe that launching only on DEXes has an overall more positive effect on the community than on CEXes.
Secondly, Hats Finance will be launching our public sale tokens on Fjord Foundry’s LBP instead of a traditional launchpad. Hats Finance is committed to long-term community empowerment, and we wish to enable the community to decide the value of $HAT. Generally, it is also our hope that the LBP strategy should theoretically also shield the community from initial excessive sell pressure and create opportunity for long-term value creation (NFA). Hats Finance is a firm believer of incentive alignment, and we hope that the community and the team will be aligned in the future development of Hats.
Hats Finance will shortly also be launching our DAO Governance post-TGE, which will allow $HAT holders to become active contributors of the protocol, creating more opportunities for incentive alignment and community empowerment. More details on that coming soon!
The original article has been updated to reflect these key changes.
$HAT Tokenomics Explained
Hats Finance is revolutionizing Web3 with DeSec, a cutting-edge approach to project security. DeSec is set to become the gold standard for security in Web3, and Hats Finance is leading the charge.
Central to this mission is the $HAT governance token. It plays a pivotal role, giving the community the power to shape and bolster security protocols. This article delves into the workings and importance of $HAT tokens and details their upcoming tokenomics strategy.
Let’s learn how Hats Finance is making the decentralized world safer and how you can participate in it with $HAT tokens.
Why launch a token?
$HAT: The Heart of Hats Finance
The $HAT token is at the core of Hats Finance, driving the future of DeSec. It allows for the governance, acceleration, and flourishing of the Hats Finance and DeSec flywheel.
This dual role of the $HAT token ensures complete and all-around governance of Hats Finance, creating a safer Web3 environment while actively involving the community.
Incentivizing Security Researchers
Hats Finance is committed to properly incentivizing security researchers to help co-create a more secure Web3 world. Security researchers are central to the Hats Finance community and ecosystem, and the $HAT token is designed with their incentives in mind.
The Hats Finance $HAT airdrop will be the very first time that security researchers are considered at the core of an airdrop and token launch. This goes to show Hats Finance’s commitment to building an incentivized but also sustainable security landscape in which security researchers can thrive.
United Against Fraud
Hats Finance allows security researchers to disclose vulnerabilities and security issues without needing permission. This sustainable mechanism enables hackers to earn rewards for securing projects, thereby incentivizing and promoting ethical hacking and scalable security.
This proactive approach helps quickly identify and fix security issues, reducing the risk of fraud and scams in the Web3 ecosystem.
Community Empowerment
Hats Finance is transparent and decentralized. The $HAT token empowers white-hat hackers to secure projects and receive incentives in return. It also promotes active community participation, fostering a collaborative environment for continuous improvement.
Additionally, approximately half the $HAT supply is allocated to community members, ensuring broad participation. Users who join any Hats Finance Bounty Vaults are rewarded with $HAT tokens.
$HAT Utility
$HAT tokens offer numerous use cases, making them a valuable component in the Hats Finance ecosystem. The key utilities are listed below.
Governance
By holding $HAT tokens, you gain voting power in Hats Finance’s governance system, allowing you to participate in decision-making and shape the future of Web3 security.
Locking or delegating your $HAT tokens lets you benefit from the platform’s economic activities and helps optimize incentives. Token holders also govern platform fees, decide on revenue utilization, and influence decisions on all aspects of Hats Finance, from code changes to competition rules.
This balanced system appeals to both auditors and audit buyers. Community members can also get involved by locking or delegating their tokens and have a say in the future of Hats Finance and security!
Bug Bounty Farming
You can deposit the $HAT tokens into the Hats Finance Bug Bounty Vault and earn APY on your $HAT token deposits.
A full guide on Bug Bounty liquidity farming will soon be available in our Medium article, so stay tuned for that.
Please note: APY is subject to fluctuation without prior notice.
Enhancing Security and Community
Community users who hold the $HAT token may stand to enjoy personal security services by security researchers, access previously granted to protocols only. Hats Finance is currently developing these tools and services, which we will share with the community soon.
For Security Researchers
$HAT tokens incentivize security researchers to engage in audit competitions and bug bounties, fostering more secure projects. Security Researchers will be rewarded with Hat Points and $HAT tokens for submitting valid bugs. This collaborative effort bolsters security and secures the future success of Hats Finance and the security of the web3 space.
Security researchers pay a small fee in the network’s native token (e.g., ETH on Arbitrum) to submit a vulnerability, minimizing spam and ensuring constructive engagement, which is converted into $HAT. Initially set at $0.30, the fee can be adjusted by stakers based on activity levels and subsequent DAO governance proposals.
Alternatively, researchers can stake some $HAT to submit reports without paying a transaction fee. Abusing this privilege may result in penalties. Researchers can become Lead Auditors by staking more $HAT and achieving a top 50 leaderboard position. Lead Auditors can be booked for competitions and are responsible for triaging submissions and creating audit reports.
For Protocols and Customers
A minimum amount of $HAT will need to be staked to deploy a vault on the Hats Finance’s Platform. Staking more $HAT increases the vault’s visibility and competitiveness, especially during high-demand periods. Hats Finance is also planning some additional incentives and discounts for loyal customers should they stake additional $HAT tokens, which we will announce in the future.
Please note that the exact amount figures outlined in these utilities are still to be finalized even after this article is published and may continue to evolve with DAO governance in the future.
Token allocation
The total supply of $HAT tokens is capped at 100 million. Here are some of the key allocations:
- Core Team Tokens: 20% (20,000,000 HAT), vesting over 27 months from the TGE.
- Seed Round: 11.50% (11,500,000 HAT), vesting over 24 months from the TGE.
- Private Round: 6.61% (6,611,111 HAT), vesting over 21 months from the TGE.
- Public Round: 0.3% (255,000 HAT), vesting over 6 months from the TGE.
- Airdrop: 5.23% (5,228,611 HAT), vesting over 3 months from the TGE.
- Marketing: 0.40% (400,000 HAT), vesting over 12 months from the TGE.
- Incentives: 28% (28,000,000 HAT), vesting over 48 months from the TGE.
- LBP: 4% (4,000,000 HAT) immediately unlocked from TGE
This distribution ensures a balanced and strategic allocation to support the protocol’s growth and stability.
Goals of $HAT
Enhancing Access to Expertise and Services
$HAT tokens open doors to a global network of security specialists. Holders can participate in unique events like triage competitions, bot races, and decentralized arbitration services, ensuring top-notch security and innovation.
Financial Benefits and Ecosystem Growth
Stakeholders benefit financially by aligning with the protocol’s growth, which helps build a sustainable and fortified ecosystem. This alignment creates a competitive advantage for Hats Finance.
The $HAT token is not just for transactions; it’s critical to building a secure, efficient, and community-driven security service ecosystem.
$HAT token is an integral part of the Hats Finance ecosystem, offering governance, farming, and security vault utilities. It drives community involvement, enhances security, and supports the platform’s long-term success.
Engaging with $HAT means contributing to a secure and collaborative environment for smart bug bounties.
What is Ahead for Hats Finance?
Hats Finance is preparing to list on Fjord Foundry’s LBP, with the Token Generation Event (TGE) on the horizon. Exciting developments, including our upcoming LBP and DAO governance, are underway.
Stay connected with our community for the latest updates.
