Tokenomics

Hats Tokens are utility tokens that hold no association or connection with securities.

They are specifically designed for utilization within the Hats Governance framework and hold no ownership, equity, or financial rights in the form of securities.

Please note that the information provided herein is for informational purposes only and does not constitute an offer, solicitation, or recommendation to purchase Hats Tokens or engage in any investment activities. The acquisition, possession, and utilization of Hats Tokens carry inherent risks, and potential token holders are advised to conduct their own research, seek professional advice, and understand the associated risks before engaging in any transactions or activities involving Hats Tokens.

Hats Tokens may be subject to legal and regulatory requirements in different jurisdictions, and it is the responsibility of individuals or entities to comply with applicable laws and regulations governing their acquisition, possession, transfer, and use.

The project team, developers, and affiliates associated with Hats Tokens disclaim any warranties or representations, express or implied, regarding the functionality, security, or performance of Hats Tokens or the Hats Governance framework. The team shall not be held liable for any losses, damages, or liabilities arising from the use, possession, or reliance on Hats Tokens or any related activities.

By acquiring, possessing, or utilizing Hats Tokens, you acknowledge and agree to release the project team, developers, and affiliates from any claims, liabilities, or disputes arising from the acquisition, possession, or use of Hats Tokens, to the fullest extent permitted by applicable laws.

This disclaimer is subject to change and may be updated without prior notice. Individuals or entities engaging with Hats Tokens are advised to regularly review this disclaimer for any amendments or updates.

TL;DR $HAT token contract address $HAT is a governance token 50% of the $HAT genesis supply is allocated to Hats community members. $HAT tokens will be rewarded to users who join any Hats protocol bounty vaults.

Token allocation

The total supply is 100 million HATs Tokens. 50% of the token supply will be allocated to the community and the liquidity mining. The total token allocation breakdown will be as follows:

Investment round tokens - 18% of the total token supply. Vesting period starting from the actual Token Generation Event (TGE) and continuing through to 21 months after the TGE. { 18,000,000 HAT’s tokens} Partnership tokens - comprise 7% of the total token supply. Vesting period starting from the actual TGE and continuing through to 21 months after the TGE. {7,000,000 HATs Tokens} Core team tokens - comprise 25% of the total token supply. Vesting period starting from the actual TGE and continuing through to 21 months after the TGE. {25,000,000 HATs Tokens} Community treasury tokens - comprise 15% of the total token supply. {15,000,000 HATs Tokens} Liquidity mining tokens - comprise 35% of the total token supply. {35,000,000 HATs tokens}

Liquidity mining

The total HATs Tokens for the 1st liquidity mining program will be 25,000,000, comprising 25% of the total token supply. The initial PPM(Protocol Protection Mining) program is not subject to vesting.

At its discretion, Hats governance can decide to replace the current liquidity mining program with another one to best align with the implementation of new protocol features.

$HAT token uses

Governance: HATs token is the voting weight in the governance(Hats governance might choose to require users tokens to be locked or staked in order to participate in governance decisions).

Farming: The goal of the farming program is to Incentivize token deposits to the bounty vault, increasing the size of the vault while receiving $HAT’s rewards as a PPM (protocol protection mining) program. Provide liquidity of HAT token on Uniswap v3 ETH<> HAT pool and get liquidity mining HAT’s rewards for locking your liquidity NFT. We are also considering an additional incentive to the first 10-20 projects who will onboard the Hats protocol.

Hats security vault: The Hats token vault, which incentivizes disclosure for the Hats protocol, will also further incentivize Hats token locking . Similarly to Sushi and xSushi, successful disclosures made in any one of Hats vaults will distribute a certain % of the tokens to Hat token lockers. (Pending governance decision)

HATs token uses in the protocol: Each exploit that will be fixed and rewarded through the protocol will trigger a split function that will incentivize hackers, committees, and protocol participants to further use the protocol. The split function parameters can be set by the governance and their default is: 60%: 30 days vested Vault tokens for (Hacker reward) 20% Vault tokens (Hacker reward). Fungible tokens for immediate hacker use 5% Committee. To incentivize committee resolution and triage of vulnerabilities reports. 5% Converted through Uni v3 to Hats and vested for 90 days (Hacker reward). To make the hacker invested in the protocol they have just added value to and to incentivise them to further disclose vulnerabilities through Hats protocol 10% Converted through Uni v3 to Hats and sent to Governance. To incentivize the long-term sustainability of the protocol and its community needs.

Goals of the Tokenomics

The $HATS token is designed with clear objectives to serve crucial roles within our ecosystem: Access to Expertise and Services: The token facilitates access to our global network of security experts and additional features like triage competitions, bot races, and decentralized arbitration services. Competitive Advantage in Talent Acquisition: Holding $HATS provides a competitive edge in attracting top security talent by offering additional visibility and exclusive opportunities within the Hats Finance ecosystem. Monetary Benefits and Ecosystem Growth: Stakeholders benefit financially by aligning with the protocol's growth trajectory. This alignment is instrumental in building a sustainable and fortified ecosystem, creating a competitive moat around Hats Finance.

The $HATS token is more than just a means of transaction; it's a cornerstone in our strategy to build a secure, efficient, and community-driven security service ecosystem.

Value Accrual in Two Phases

Phase 1: Network Effects Objective: Focus on accelerating growth and achieving network effects. Incentives: Core actions are incentivized through liquidity mining and airdrops, encouraging the creation of vaults and delivery of security services. Staking Benefits: Staking $HATS tokens offers increased access, visibility, and monetary benefits, signaling long-term commitment. Staking is optional but provides competitive advantages. Community Ownership and Governance: Stakeholders begin to shape the protocol’s rules and processes, contributing to a strong community-driven ecosystem. Arbitration Service: Activation requires a token stake, with a slashing mechanism for the losing party in arbitration, doubling as spam protection. Token Buyback: Fees generated by the protocol are used for token buybacks, enhancing treasury value.

Phase 2: Value-Accrual Transition: Initiated once the community agrees that network effects are sufficiently established. Mandatory Stakes: Participation in the marketplace requires a minimum stake from both security experts and customers. Stake Utilization: Ensures efficient marketplace operation, with potential slashing for malicious actions. Stake Influence: Determines participant visibility, module access, and fee structures. Token Buyback and Revenue Sharing: Continuation of the buyback policy; additional incentives for building on the protocol and revenue sharing.

In both phases, the $HATS token plays a crucial role in fostering a thriving ecosystem, aligning stakeholder interests with the protocol’s growth, and ensuring a fair, efficient, and rewarding marketplace.