Hedera Hashgraph, the company behind the blockchain-like Hedera network, is urging investors to wait longer for tokens they paid for as the price of the HBAR tokens plunged significantly.
Addressing the investors, Mance Harmon, the cofounder and CEO of the platform, revealed a program under which HBAR token investors will receive more tokens than originally stipulated in a simple agreement for future tokens (SAFT) for delayed distribution. Over time, this additional allocation would help them recoup their initial investments.
The offer would incentivize investors to support network usage and growth as well as shore up the price of HBAR, he wrote. The number of additional coins would be equal in value to 10 percent of the company’s annual revenue from treasury sales and transaction fees, capped at investors’ original investment amount.
The offer is optional; investors who choose not to sign up for the new program will remain on their existing SAFTs without change.
Hedera Hashgraph, founded in 2018, is a venture capital-backed company supported by the likes of IBM Corp. that is building a public distributed ledger for building decentralized applications. The company has raised $128 million including $110 million through two ICOs to accredited investors.
The company began distributing its tokens in September 2018 and allocated more than 1.4 million HBAR to investors. HBAR tokens traded as high as $0.102127 cents on debut but in its subsequent releases, the token’s price has fallen nearly 90%. The tokens were trading at $0.015316 as of 7:55 p.m. EST, with the decline continuing even following the announcement that the release of future token releases had been delayed.
Lack of Adoption
The reason HBAR’s price has declined is a rather simple: They’re not being used. “The rate of adoption and demand for HBARs to use on the network has not been what we originally expected; however, we are confident that the initiatives that the Council is undertaking will bring the Hedera network closer to achieving the goal”
– Hedera Hashgraph co-founder and CEO Mance Harmon.