Here’s what HashKey’s 30% token allocation for staff could mean for investors

HashKey recently announced that it is allocating 300 million tokens to team incentives with a 36-month unlock period following the launch of its native token, HSK. How does this situation affect investors?

On December 5, HashKey released an official statement announcing the allocation of HSK tokens to team members. The notification stated that HashKey allocated 30% of its 1 billion token supply to the internal team, which follows the unlock period consisting of a minimum locking period of 3 months and a linear release of 35 months.

“We would like to clarify key aspects of HSK’s tokenomics and team incentive structure: HSK has a total token supply of 1 billion, of which 300 million is reserved for team incentives,” HashKey wrote in the firm’s official statement.

HashKey said that the 30% token allocation to team members was made to support the growth of the HashKey ecosystem. The company claimed that the tokens will be used for licensed exchanges, investment services, tokenization and infrastructure solutions.

Tokens can also be used to pay exchange fees, trade discounts and access community incentives. Therefore, current team members and former employees who hold HSK must comply with the firm’s token management policies, which govern the issuance, holding and sale of tokens in accordance with the lockup plan.

Moreover, the Hong Kong-based crypto exchange clarified that employee resignation does not allow former team members to unlock early or full tokens. This is done to prevent former employees from cheating the system and selling tokens before the unlock period.

As previously reported by crypto.news, HashKey first opened deposits for HSK at 07:00 UTC on November 7. Spot trading for the HSK/USDT pair started at 10:00 UTC on November 26. The opening of HSK withdrawals took place the next day, November 27, at 10:00 UTC.

In the first announcement, the exchange announced that it was preparing a 1 billion token offering, with 65% of the tokens allocated to marketing and business development, while 30% of the supply went to the HashKey team.

What does 30% HSK allocation to team members mean for investors?

On the one hand, allocating tokens before a new launch is a common practice in the crypto space. It means encouraging team members and aligning their interests with the success of the project. This way they will be more motivated to work harder to improve the project.

In HashKey’s case, the 36-month linear release time shows that the team is committed to the long-term development of the project. The unlock time also reduces the risk of pump and dump occurring because team members cannot quickly sell tokens to make a profit during this time.

On the other hand, allocating some of the token supply to team members means fewer tokens in circulation. Generally, when the portion reserved for insiders is very high, there will be higher pressure for insiders to sell tokens.

Once the lockup period ends and tokens begin to unlock, the team may potentially sell their tokens to make a profit; this will increase supply and potentially lower prices. Therefore, investors will need to pay attention to the unlock timeline and development stages of the project.

According to data from CoinGecko, HashKey’s platform token dropped by 9.4% in the past day. HSK is currently trading at $1.31 at the time of writing. Over the past week, the token is up nearly 20% and has a fully diluted valuation of $1.3 billion. However, there is currently no information on how many tokens are in circulation in the market.