Hedera Hashgraph (HBAR), one of the projects presented as a promising network to rival the best blockchains, has met the most common fate of crypto startups - a tanking token price.
The HBAR token started trading at $0.15 in September, and quickly wiped out most of its value. HBAR now hovers around $0.014, wiping out 90% of the value, with dwindling volumes.
HBAR only allowed a very brief period in which to sell tokens and make a very small potential profit. The ICO price of HBAR was relatively high, hurting investors even more. Now, the token has a large community with skin in the game, expecting a miraculous recovery, or at least a bounce from the rock-bottom prices.
But HBAR may be pressured by fears that altcoin projects may continue dumping in the coming year. The project’s proposal to become a smart contract and dApp development platform is not enough to keep up the optimism.
HBAR sank despite having the advantage of immediately trading on Binance, but has seen its liquidity dwindle. The HBAR token has a 60% share of the HBAR/BTC pairing, and a 33% market against the Tether stablecoin.
The rapid slide, however, was seen as going beyond the generally depressed state of the altcoin market, and to be a sign of dumping. To compare, other projects on Binance, such as ChainLink (LINK) and Cosmos (ATOM) went against the market and even rallied significantly in the past quarter.
Hedera Hashgraph also aggressively pushed its token to retail investors, potentially syphoning away their investment for an asset without a solid value. Additionally, many of the ICO buyers are actually not outright HBAR owners, but holders of preliminary tokens, or SAFT assets.
Now, the Hedera Hashgraph wants to incentivize owners of SAFT to hold onto the coins, and not sell, as well as getting their HBAR on a delayed time schedule.
“Any current SAFT holder that chooses to participate will receive the full number of coins expected in their original SAFT agreement, but will agree to extend the distribution schedule for what remains of their original SAFT allocation by 25%. In exchange, Hedera will repay the full value of their original investment over time, in coins, at a rate commensurate with network growth and adoption,” explained Mance Harmon, CEO and co-founder of the project.
Such an approach essentially wants to prevent retail holders from dumping. However, traders suspect HBAR has seen dumping either from the team or from other “whales”. HBAR enjoyed almost immediate listings to big exchanges, and was one of the best-accepted projects, but unfortunately, it turned into one of the big failures of the year.