HNS coin economics

About the Handshake coin

The Handshake coin (HNS) is used by participants to transfer, register, and update domain names. The coin is necessary to prevent spam on the peer-to-peer network. The vast majority of the initial coin supply will be granted freely to the Free and Open Source Software community — the majority will go to individual FOSS contributors via the developer airdrop. For all non-developers, the coin is available to buy through Namebase. Users on our platform will be able to use HNS to bid on names or buy it for trading with other assets like BTC. HNS is also used as payment for names on the secondary marketplace and for SLD sales. The main utility of HNS on Namebase will always be to facilitate an easy and secure onramp to the decentralized Internet.

Distribution

At the genesis block, there is 1.36 billion HNS with an additional 680 million available to be mined, for a fully diluted supply of 2.04 billion. The first halving of the mining reward will occur after 3.25 years — after 5 years about 430k (60%) of the mineable coins will have been mined, and after around 100 years, the very last mineable HNS coin will be mined.

Developer airdrop

Of the initial 1.36 billion coins, a full 952 million HNS (70% of the initial supply, 47% of the fully diluted) airdrop is theoretically available to be claimed (instructions) by:

Anyone who had more than 15 followers on Github, and also had valid SSH+PGP keys on their GitHub account, during the week of February 4th, 2019 (roughly 170,000 accounts)
People whose PGP keys are included in the strong set (roughly 30,000 keys)
Hacker News accounts older than 1.5 years old with linked Keybase accounts (about 19,000 accounts)

To date, around 25 million HNS (1.83% of the initial supply, 1.23% of the fully diluted) has been claimed through the developer airdrop. The majority of the claims were made within the first month after Handshake's mainnet launch.

The discrepancy between the total possible number of airdrop claims and the actual number of airdrop claims can be explained by the fact that eligible developers need to have their SSH keys from 2019 in order to complete the claim. Many developers replace their SSH keys regularly for security, and other developers lose their keys when they switch machines. Without their old SSH keys, it's impossible for eligible developers to claim the airdrop.

Contributors and investors

Besides the programmatic airdrop, 7.5% of the initial supply was granted to the founding contributors and 7.5% was sold to investors in exchange for 10.2 million USD at a price of $0.10 per 1 HNS. The 10.2 million USD was subsequently donated to FOSS organizations (see below). The 15% allocation to contributors and investors went out to 1356 distinct addresses, and no single entity controls more than 1.5% of the initial supply.

FOSS

Aside from the investor and contributor allocations, significant allocations of HNS were given to pillars of the open source software community such as the Apache foundation, LibreSSL, the EFF, the Mozilla Foundation, Arch Linux, etc. In addition to HNS grants, the $10.2 million raised from investors was also donated (in full!) almost immediately after it was raised, to the same set of foundations as cash grants.

Distribution table with all airdrops claimed

Here is the HNS distribution assuming all developer airdrops are claimed. This is theoretical given that most developer airdrops are likely impossible to claim at this point as explained above.

Group

Amount

% / Total Supply

Distribution table with projected airdrops claimed

Around 25 million HNS have been claimed through the developer airdrop, with the majority of claims occurring within the first month of the Handshake mainnet launch. Here is the HNS distribution assuming another 25 million HNS gets claimed through developer airdrops in the future (this is an overestimate but it provides a safe margin for error).

Group

Amount

% / Total Supply