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HSK Tokens' Rewards Policy

1. What is HSK
 
HSK platform token is the ERC-20 platform utility tokens of the HashKey Group, and aims to empower the entire HashKey ecosystem with its utility expanding in the future via various usage benefits across HashKey's current and future business lines including HashKey regulated exchanges, custody, brokerage, venture capital, asset management, node-validation services and as well as additional Web3 infrastructure.
The maximum fixed supply of HSK tokens is 1 billion. 65% of HSK tokens will be supplied to Ecosystem Growth Pool; 30% of HSK tokens will be supplied to Team Pool, and 5% will be supplied to Reserve Fund. To mitigate the dilutionary impact of reward distribution, HSK tokens will be repurchased and burned on a regular basis from the circulating supply.

HSK is designed to incentivize contributors to the HashKey ecosystem, including its users and ecosystem partners; and HashKey staff: (a) using it to attract new users; and encouraging existing users to continue/increase their usage of HashKey Group's services. (b) will be distributed as rewards to HashKey staff that contribute to business growth.

2. Usage benefits
 
Potential benefits for HSK holders and the use of HSK token includes: platform service fee payment, trading fee discount, obtaining community incentives for ecosystem growth, priority in early notifications and access to new products, research report release, etc.

2.1 Platform service fee payment and trading fee discount
HSK token can be used to pay for the service fees of HashKey Group platforms after listing, including but not limited to transaction fees, withdrawal fees, etc. Encouraging users to pay with HSK token through preferential rates or specific promotional policies increases the utility and liquidity of HSK token. When users utilize HSK tokens to offset transaction fees on HashKey Exchange, HashKey Exchange will record the payment in HSK tokens as financial income. The HSK tokens received by HashKey Exchange may then be distributed to its parent companies in the HashKey Group by way of 'dividend or distribution'.
 
2.2 Obtaining community incentives from ecosystem growth
To promote user growth and community participation, HSK token serves as a reward mechanism, rewarding users for participating in community building, content creation, user referrals, and other activities. This not only increases user retention but also promotes positive interaction within the community and enriches its content.
 
2.3 Industry research and early notifications release
Tokenholders have the priority for Web3 and blockchain industry research report, early access to future new token subscriptions, early notifications and access to new product and product upgrades, etc.

3. Rewards distributions to users and contributors of ecosystem
 
HSK token issuer, HashKey Token Limited ("HTL") will distribute HSK token to Ecosystem Growth Pool at the end of each month, and then the Ecosystem Growth Pool will reward HSK to users and contributers based on their trading and liquidity provision activities in the HashKey ecosystem.
Given this advance planning, the business entities of HashKey ecosystem do not anticipate any shortage of HSK tokens for reward distribution. HTL will distribute the HSK tokens from the Ecosystem Growth Pool wallet as trading rewards and liquidity rewards to users and contributors within two days of the last calendar day of each month.
There are two categories of monthly Platform User Rewards: trading rewards and liquidity rewards.

3.1 New users' rewards
New users can get HSK tokens from:

  • Welcome bundle

  • Referral program

  • Professional investor verification, etc.
     

3.2 Trading rewards
Trading rewards are distributed monthly to users according to a publicly-disclosed formula. This formula will rank each User based on its trading volume and trading fees generated, and then output the quantity of HSK tokens to be awarded to each User out of the Monthly Distribution Pool on a pro rata basis tied to each User's rank. Trading rewards items including:

  • Trading ranking competition

  • Transaction rewards
     

3.3 Ecosystem Partner Rewards
HashKey ecosystem will grant HSK tokens to strategic partners of HashKey's platform. The ecosystem partners include institutional investors like market maker(s) and other ecosystem partners.

  • Institutional investor: these will initially consist of a designated market maker that commits to provide minimum standards of order liquidity on HashKey exchange's platform. "Minimum standards for order liquidity" refers to specific continuous order quotation metrics that we set in a contractual agreement with the market maker. For example, a designated market maker will need to commit to quote continuous two-way orders at minimum order sizes, minimum bid-ask spreads, and minimum uptime requirements.

  • Other ecosystem partners: HSK tokens will be used to incentivize ecosystem partners in return for services that would help enhance the user experience and the business of the HashKey ecosystem, and to incentivize such partners to utilise HashKey platform.

4. Rewards Distributions to employees
 

  • Employee Rewards

HTL will grant HSK tokens as a free reward to HashKey Group staff that contribute to the business growth of the HashKey Group. These employee reward tokens will be granted on an annual basis at the end of each Hong Kong fiscal year (31 March), will be locked-up upon grant, and will be unlocked on a vesting basis according to the following vesting schedule: after a 3-month lock-up period post-Token Generation Event (TGE), the tokens begin to vest and are evenly distributed over 36 months.

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