# $HEGIC
## $HEGIC Fair Valuation $Hegic is the core and blood of the Hegic ecosystem. Users can use $Hegic to participate in the [Stake & Cover](https://catpull-1.gitbook.io/hegic/writing-options/broken-reference) activities. Tokenomics of $HEGIC are specific to the protocol, and provide real value to their owners. $HEGIC owners are option writers and they are collecting premiums and fees, **fully participating in the protocols PnL, therefore are in complete financial ownership and responsibility of trading.** As profits are cash-settled (in USDC), **investors can make a fair valuation of $HEGIC price**, going from Epoch to Epoch. Every Epoch results either in profit or in loss for $HEGIC stakers, based on the performance of traders. As more Epochs pass, we will have more precise APR for staking $HEGIC. Let's take a Epoch 2 as an example. * Epoch 2 PnL per Hegic was 0.000444$, which was 3.5% of the fixed Hegic Price for the start of the epoch (0.0124$) * That is annualised **return of 42% on your investment**, and the return is in cash (USDC) * Investing into $HEGIC carries a risk, so it can not be evaluated directly vs putting USDC in lending protocol like AAVE, but the rates can be compared * If AAVE is giving out 1.22% APY on lending your USDC we can take it as a *Risk Free Rate* (other than smart contract risk which is implied for every DeFi protocol), **than it is *****fair to***** value $hegic in higher R/R ratio of desired annualised return** (is it 10%, 20% or 30% it's up for every investor/free market to decide) Based on our example numbers, $HEGIC price could be 0.03$ and return based on Epoch 2 would be 15% APR. With each Epoch passing, we will have more precise cumulative APR for last 6 months, 12 months etc. Another argument is that if you ***hodl*** $HEGIC the return will be bigger than expected. It is fair to assume that **the market price of $HEGIC will move according to what market feels is the desired R/R ratio**. If Epochs predominantly end in profit, that would mean very high APR returns, which by *rules* of the free market will lead to higher $HEGIC price. As everyone has a very subjective opinion in terms of how big of a reward should be for carrying the risk of possible loss in staking $HEGIC, the desired return range might be from 10%-30%, which will lead to **$HEGIC fair evaluation**. TradFi has been using **Price/Earnings ratio for years** to determine the fair price of a stock, and same can be applied here. As more and more Epochs pass, the market will price $HEGIC based on the P/E - will it be P/E ratio of 5, 10 or 20 it's up to be seen. Unlike a lot of DeFi protocols that proudly show their P/E ratios, but don't actually allow token owners to access those earnings in anyway (Lido, Uniswap being a perfect example), **$HEGIC owners can claim protocol earnings in cash every month**. **The goal behind implementing a new model that is focused on the fair valuation price of $HEGIC is to directly link the fundamental growth of the protocol to the token price.** The growing volumes, raising popularity of options trading on Hegic, new products and strategies, thousands of new users, and tens of thousands of new options traded **would be directly impacting the price of $HEGIC and the size of Stake & Cover Pool.** ## $HEGIC token addresses * [0x431402e8b9dE9aa016C743880e04E517074D8cEC ](https://arbiscan.io/token/0x431402e8b9de9aa016c743880e04e517074d8cec)(Arbitrum) * [0x584bc13c7d411c00c01a62e8019472de68768430](https://etherscan.io/token/0x584bc13c7d411c00c01a62e8019472de68768430) (Ethereum) ## $HEGIC Token Supply | Initial supply | 3,012,009,888 | | | ------------------------ | ------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------ | | Burn | 1,934,325,163 | 2/3 of the supply burned on 2022-02-22. [Link](https://etherscan.io/token/0x584bC13c7D411c00c01A62e8019472dE68768430?a=0xdead000000000000000042069420694206942069) | | Circulating supply | approx 750,000,000 | $rHegic2 redemption ends 2023-03-03 | | **Current total supply** | **1,077,684,725** | | ## Initial distribution (circa Sept. 2020)
* [3,012,009,888](https://etherscan.io/tx/0xe5972cb9382fa5c9170e53025ca7eb704d3f231687254cddde34f0dec92d2444) total initial token supply * Initial Bonding Curve Offering (IBCO) sold [90,360,300](https://etherscan.io/token/0x584bC13c7D411c00c01A62e8019472dE68768430?a=0x1b8782d4a7da5b63a934e78a6563fdd122e9915d) token at [$0.13 each](https://twitter.com/HegicOptions/status/1305571255295381505?s=20\&t=Qwzel_Hn_DYVzpUSWWbsfA) * Hegic Development Fund (HDF) has not sold a single [token](https://twitter.com/HegicOptions/status/1426861688540774401?s=20\&t=Qwzel_Hn_DYVzpUSWWbsfA) * The February 2022 token burn reduced all but HDF's token holdings * $rHegic2 was used in one of the previous versions of the protocol as an incentive to LPs and options traders. Its only purpose is to be redeemed for $Hegic 1:1 at a later date. * Redemption of $rHegic2 is already running since \~ Jun 3 2022 (see [announcement](https://twitter.com/HegicOptions/status/1532799365651349506)), and it ends March 3 2023