While Bitcoin (BTC) has crypto-enthusiasts in doubt, Hedera Hashgraph is pulling out all the stops. Indeed, the project’s governance board has just announced the launch of a massive grant initiative to benefit crypto projects involved in key areas of the ecosystem.
An old-world governance board
Launched in 2018, Hedera Hashgraph is a crypto project with some pretty unique features. First of all, it is not a blockchain, but a distributed ledger. As a reminder, blockchains are a subset of distributed ledgers, which can be declined in many ways. Hedera is based on a Directed Acyclic Graph (DAG) architecture rather than on a blockchain.
The main difference between these two architectures is the way transactions are added to the ledger. On a blockchain, blocks containing transactions are added to create a transaction history, and the longest chain of blocks is considered valid. The DAG architecture, on the other hand, adds blocks to the registry without taking into account their order. This difference in architecture results in a gain in speed and scalability at the expense of decentralization.
Moreover, Hedera Hashgraph is “owned and governed by the world’s largest organizations”. Behind this somewhat nebulous statement is the Hedera Governance Board, a group of entities responsible for overseeing the project.
At first glance, we might see this as a sign of decentralization. However, the entities that head the board are champions of the current system, who want to keep control of their assets. Indeed, among the members of the council, Google, IBM, EDF and a whole series of financial institutions are well represented. The only entity truly connected to the cryptosphere participating in the governance of Hedera Hashgraph is Chainlink.
The board is intended to represent the interests of the Hedera network, rather than those of its members. Nevertheless, given its composition, there is room for doubt.
Make way for the HBAR Foundation!
In a September 16 press release, the Hedera Governance Board announced the launch of extensive grant program. The grant plan is for the allocation of 10.7 billion HBAR tokens, or 20% of the total offering. Currently, this war chest is valued at around $5 billion. However, at the time of the board’s approval of the budget on July 14, HBARs were worth “only” $2 billion. Fortunately, the price of HBARs rose sharply over the summer, which boosted the value of the subsidy plan.
Of the total, HBAR 5.3 billion ($2.5 billion) will be allocated to the grant program and the other half will be used for “partnerships and other initiatives to strengthen the development of the Hedera ecosystem.”
In conjunction with the allocation approval, the board created a new entity to distribute the funds: the HBAR Foundation. The HBAR Foundation will have full control over the administration and deployment of the grants. It will be led by Shayne Higdon, a tech veteran who has led dozens of successful investment and acquisition deals.
“Our goal with the transfer of these assets is to ensure that decisions about the growth of the network will be increasingly decentralized through the independence of the HBAR Foundation.”
In order to get into the good graces of the HBAR Foundation, developers and the startup will have to submit projects related to the Hedera ecosystem operating on specific segments of the cryptosphere. Indeed, Hedera wants to promote DeFi, NFT, gaming, but also central bank digital currencies (CBDCs) projects.