Whitepaper
Below you'll find our WhitePaper 2.0, version June 2022.

In Short

Hector is a decentralized protocol based on the HEC token. Hector Network is developing an ecosystem which will consist of various innovative developments and applications that will set it apart from its competitors. Hector is community guided with $HEC holders deciding the future of Hector Network via on-chain voting.

The Opportunity

Stablecoins like USDT and USDC have become an integral part of the Crypto space. We use them to store non-volatile value, allowing us to maintain the same amount of purchasing power from day to day. In theory, stablecoins are backed by US Dollar, however in practice this means that traditional stablecoins aren’t actually stable since this isn’t how the US Dollar works. The Federal Reserve controls the minting of US Dollars, and its fiscal policies have consistently led to the depreciation of its currency. This means that a Dollar today is worth more than a Dollar tomorrow.

The Solution

The World’s First Deflationary Rebase Ecosystem

A token has true value if it maintains a steady price, or increases in price over time. In 2009, Satoshi Nakamoto mined the genesis block of Bitcoin, starting a financial revolution which would meaningfully challenge the status quo. In recent months the voices describing Bitcoin as a store of value have been getting louder, and several major institutions and jurisdictions have either bought Bitcoin or are publicly planning to do so.
This speculative expectation of buying volume combined with the fact that Bitcoin has not been fully mined yet is increasing the price of Bitcoin over time. This essentially makes Bitcoin a short-term store of value, but there will come a time when the price ceiling of Bitcoin is reached, and price changes which would mitigate inflation will become harder to achieve without Bitcoin becoming deflationary, or being used en masse as a utility.
This is where Hector Network (“Hector”) comes in. Hector Network is creating a suite of use cases which is aiming to provide true utility to the $HEC token.
Profits from the ecosystem will be used to buyback and burn tokens from the open market, allowing $HEC to be deflationary over time.

The Fantom Opera Chain

Fantom is a superior Layer-1 Blockchain, especially for DeFi. We expect Fantom to gain more traction over the coming months and years and gradually expand its community and influence. Fantom is a fast, scalable blockchain network and is always being upgraded: transactions are generally confirmed in 1–2 seconds, far faster than other blockchain solutions. Additionally, transactions on Fantom blockchain are incredibly inexpensive.
The blockchain is extraordinarily developer-friendly: it is fully compatible with the Ethereum Virtual Machine. This means that Fantom supports all smart contract languages that are compatible with the Ethereum blockchain (Solidity and Vyper).

Fantom Opera Quote Page

Opera is a secure and fast environment to build decentralized applications. It is fully permissionless and open-source. Powered by Fantom’s aBFT consensus algorithm, it leverages its speed and fast finality, and is ready for real-world applications with no risks of congestion or long confirmation times.
The Fantom Opera mainnet is compatible with the Ethereum Virtual Machine (EVM) and provides full smart contracts support through Solidity.
We designed Opera to overcome the limitations of older generations of blockchains, keeping the compatibility with Ethereum for seamless dApp porting.
Lachesis is Fantom’s aBFT consensus algorithm. Simply put, a consensus mechanism is the engine that powers the blockchain.
Compared to Classical and Nakamoto consensus, Lachesis is a faster, more scalable, and more secure choice.
Developers can use Lachesis to build peer-to-peer applications without having to create their own networking layer.
Lachesis is:
  • Asynchronous: Participants have the freedom to process commands at different times.
  • Leaderless: No participant plays a “special” role.
  • Byzantine Fault-Tolerant: Supports one-third of faulty nodes, including malicious behavior.
  • Final: Lachesis’s output can be used immediately. There is no need to wait for block confirmations; transactions are confirmed in 1-2 seconds.
Source the Fantom Foundation

Growth on the Fantom Opera Chain

The Fantom Opera Chain is rapidly growing to become one of the most used blockchains by transaction count. Recently the Fantom Opera Chain has been handling more daily transactions than Ethereum.
The Fantom Opera Chain is also one of the fastest growing chains, gaining 10,000-15,000 new addresses per day.

Hector Network was a Recipient of the Fantom Foundation Incentives Grant

Starting in the Fall of 2021, the Fantom Foundation supported the growth of the Fantom Chain through their Incentive Grants Program. The grant disbursal depended on the time weighted average TVL (total value locked) of the protocol. The higher the TVL of the project, the larger the reward it received.
Hector Network qualified for the grant in early January of 2022, and while participating we were Tier 3. This means Hector Network received 208,333 FTM tokens per month (or a total approx. 624,999 FTM over three months). Our team used these funds to support development costs and supplement TOR rewards. At the end of March 2022, the Fantom Foundation restructured how it offers grants and the Incentive Grants Program ended. Hector Network was thrilled to participate in the program while it operated and are looking forward to our continued mutually beneficial relationship with the Fantom Foundation.

Hector Network Metrics

Hector Network operates the world’s first deflationary rebase token. This means that those who stake our native $HEC token receive rewards from rebases, as well as the inherent rewards of a deflationary token. Our token supply peaked at 3,530,424. Within two months of setting the goal of becoming deflationary, we achieved a 14% reduction in the total supply of HEC tokens.
In the final quarter of 2021, Hector Network built a treasury of more than $100,000,000 in stablecoins by offering bonds of the HEC token at a discount to market prices. We now have one of the largest development funds of any project in the space. We are using those funds to develop a suite of products and services to aid the expansion of the Hector Ecosystem. Whilst not in use, the majority of the treasury is invested. Assuming moderate performance of these investments, we can accumulate more than $10,000,000 per year from interest alone into the treasury to support further development costs.
However not all treasury value is stored as stablecoins (“Risk Free Value/ RFV”). Hector Network also invests large amounts of our treasury into volatile tokens in order to secure continued growth. We currently hold the following tokens in our treasury:

HEC Tokenomics

On March 29th 2022, the Hector Network Community voted to begin an emission plan which will create a fixed supply cap for the HEC token.
The progression of the emission plan means we can likely guarantee how many tokens will be minted as well as likely guarantee a supply cap for HEC whilst still making predictable changes to the APY over time. Additionally, the plan allows us to invite users to lock their tokens for a boosted reward, reducing selling pressure.

The Emission Plan

Note: The emission plan will be finalised and implemented in Q2 2022. The figures below are for illustrative purposes and may change slightly.
The emission plan will last for 104 weeks, split into 13 periods of 8 weeks. At each period, rewards will be reduced to 75% of the previous period.
To observe the effect of the emission plan on the HEC token supply, we will assume a starting supply of 3,000,000 tokens and no buybacks / burns.
The growth of the HEC supply will gradually slow down over a period of two years and then supply growth will stop. Remember that this model also assumes no buybacks or burns of any kind are taking place. Using this model it will take us two years to reach the stage where, regardless of the token price, HEC will aim to be deflationary through buyback and burns, from subproject revenues, TOR burns, and treasury burns.

The Distribution Plan

Every emission plan needs a distribution plan. The distribution plan controls how the emitted tokens are spread out to stakers. Our emission plan will use 3 time-locked farms (plus normal staking for those who don’t want to take part), each of which will allow you to stake 3 products. Longer time locks will give a larger boost to rewards:
Each week, HEC are emitted according to the emission plan. The tokens are then split into the farms, with the distribution being controlled (in part) by votes. Whilst each time-locked farm has their associated base reward rate, farms that receive a higher portion of votes will have increased rewards. This system allows for community direction as well as allowing HEC to leverage base rates to ensure that longer locks remain an attractive option.

Voting

Those who lock their tokens will be able to vote on the weighting of rewards to each farm.
When a user locks HEC, they will receive veHEC — the farm voting token. Subsequent voting snapshots will be held to determine which farms will receive which emission rewards boosts. The veHEC token is used to participate in those votes, thus empowering users to control the allocation of additional rewards. This allows each user to make the most of their personal locking choice and to incentivise others to lock for longer periods, reducing sell pressure.
Hector Network proposes to set the emission cycle to two years because it will allow users to make long term decisions about the HEC project. It gives certainty and it illustrates that we will be here for years to come. It allows us to make small adjustments over a specific period of time as a community.
Additionally, a two year cycle provides the team ample opportunity to continue developing the Hector Ecosystem. Over the two years the Ecosystem will be instrumental in generating revenue to feed back to the HEC token, whilst the emission plan simultaneously negates the problem of inflation. Through this timeline we can create some of the most profitable and successful sub-projects in the Fantom space and beyond.
Buybacks and burns from TOR, sub-projects, and the treasury will continue during the emission period. As the inflation of the HEC token reduces, the impact of these burns will increase.

Project Revenues and the Flow of Capital

Our development budget for 2022 is $7,200,000 and is moved from the treasury to the DAO Wallet in quarterly installments. This budget supports the Marketing, Development, Salary, and other costs associated with the running of the project.
Much of our treasury has been invested in Farming positions, and other tokens such as FTM, BOO, BTC and ETH. The Curve gauges we use provide predictable growth for the treasury which will help sustain the development of the project into the future.

Validators

Validators are the computers which help support the chain: when you submit a transaction, you send it to a validator which performs the necessary hashing algorithms and then appends the result to the blockchain. The “gas” fee you pay is the reward that the validator gets for its work. The Fantom Opera Chain uses a leaderless Proof-Of-Stake aBFT (asynchronous Byzantine Fault Tolerance) consensus mechanism.
We run two Validator Nodes on the Fantom Opera Chain. These Validators help facilitate transactions, secure the network, and also bring revenue into the project in the form of transaction fees.
FTM token holders can stake their tokens with our validators for rewards upwards of 13% APR. This has two benefits:
  • Users get APR rewards
  • The validators hold a larger stake of tokens, increasing the gas rewards they receive and bringing more revenue into Hector Network

Our Crosschain Expansion with Hector Dex

We firmly believe that chain-agnosticism will become a key feature of successful cryptocurrency projects in the coming years. As such, Hector Network developed a DEX in partnership with Rubic Exchange which will allow users to swap any token, on any chain, to any other token, on any other chain in a single click.
Our broader aim for Hector DEX is to create the backbone for our cross chain expansion. All our offerings will be available on all chains, as if they were being used natively on the Fantom Opera Chain. This will allow us access to much more liquidity and lift the ceiling to our expansion potential.

Hector Institute

Hector Institute is our decentralised lending and borrowing platform built on the Fantom Opera Chain, in partnership with Ola Network. Users are able to lend and borrow a variety of crypto assets. Lenders can achieve an attractive APY without any risk of HEC price volatility by lending out stablecoins like DAI and USDC. APR for stables might be more modest than some alternatives, however it carries a comparatively low risk.
Borrowers can also use wsHEC (wrapped, staked HEC), and all other tokens offered at Hector Institute as collateral. Those borrowed tokens can then be used for different projects without having to unstake or unwrap their tokens.
Hector Institute supports the ongoing growth of the Hector Ecosystem. The development of Hector Institute will continue over time, ultimately expanding to offer a wider variety of tokens, loan types, and other offerings.

Bonding

One of the ways that Hector can increase the size of its treasury is by selling Bonds. Bond prices will generally trail below market prices in order to incentivise Bond sales.
There are three market trends, each of which requires a different response from the protocol:
In positive markets (prices are increasing), Bond prices will trail market prices and allow users to buy HEC at a discount.
Flat Market conditions warrant a similar response: Bond price will fluctuate, along with the market price, but remain slightly below to incentivize Bond sales. Bond price fluctuations are caused by users buying and redeeming bonds.
When prices are falling Bond prices will fall with them, however they will lag behind making market purchases more attractive. This helps to stabilize the price.

Staking

Earlier we touched on supply and staking being key components of deriving value for users. Users can stake their HEC, locking it into the ecosystem and receive compounding sHEC (which will always be exchangeable for HEC at a 1:1 ratio).

4,4 Bonds and Staking- Hyperstaking

Traditionally, users would need to choose between Staking and Bonding. Usually their decision would depend upon which product offers the best ROI at the time of purchase. We call this 3,3 since in game theory, Staking would be the optimal outcome for all participants. We decided to take this further with our 4,4 model. Where 3,3 Bonds would be rewarded in HEC, 4,4 rewards in sHEC. This means that your Bond rewards compound as if they were staked, even before they are claimed.

Future Revenues

Hector Network is also developing several additional revenue-generating “sub projects” within what we call the “Hector Ecosystem”. Part of the revenue from these sub-projects will be used to buy back and burn HEC tokens from the open markets.
For explanations of future revenue sources and the Hector Ecosystem, see our Roadmap Section starting on page 23 (in the actual PDF).

The Tor Stablecoin

The TOR stablecoin is the stable counterpart to the HEC utility token. Cryptocurrency-backed stablecoins are issued with cryptocurrencies as collateral, which is conceptually similar to fiat backed stablecoins. However, the significant difference between the two designs is that while fiat collateralization typically happens off the blockchain, the cryptocurrency or crypto asset used to back this type of stablecoin is done on the blockchain, using smart contracts in a more decentralized fashion.
TOR is a new ERC20 token which can only be minted when a user burns HEC. TOR can be exchanged for newly minted HEC (redeemed) using the HEC price oracle, implemented with Time Weighted Average Price (TWAP). Oracles are a fundamental component to any stablecoin’s base functionality. An oracle, in relation to blockchain technology, is a system built to feed data to smart contracts.
Generally, a stablecoin is only valued and trusted if it maintains its price peg. TOR is pegged to $1. There are two layers of TOR’s backing:

Layer I: Smart Contract Algorithms and HEC/Stable LP

The underlying protocol uses the basic market forces of supply and demand to maintain the price of TOR. Everybody understands that when the demand for TOR is high and the supply is limited, the price of TOR will increase. When the demand for TOR is low and the supply is too large, the price of TOR will, in principle, decrease.
The protocol ensures that the supply and demand of TOR is always balanced, leading to a stable price.
How does this work? Expansion and contraction! To maintain the price of TOR, the HEC supply Curve pool adds to or subtracts from TOR’s supply. Users burn HEC to mint TOR and burn TOR to mint HEC, all incentivized by the protocol’s algorithmic market module. Here’s a video which explains the ecosystem.
HEC is the counterpart to the TOR stablecoin. By modulating supply, Hector’s price increases as the demand for TOR increases. Let’s zoom in on the elements Expansion and Contraction:
  • Expansion: The percentage of TOR in the Curve pool decreases, so it means that the demand for TOR is high. The price of TOR against USDC/DAI also increases slightly, so minting TOR can be slightly profitable. Users will take advantage of this profit margin by minting TOR and re-balancing the percentage of TOR in the Curve pool.
  • Contraction: The percentage of TOR in the Curve pool increases meaning that the demand for TOR is low. The price of TOR against USDC/DAI also decreases slightly, so redeeming TOR can be slightly profitable. Users will take this profit by redeeming TOR and rebalancing the percentage of TOR in the Curve pool.
Expansion and contraction can be considered the prime mechanism for maintaining peg (layer 1). TOR maintains stability through a simple swap mechanism: 1 TOR can be exchanged for 1 dollar’s worth of HEC at any time. If TOR becomes less valuable than $1.00, buyers can capitalize the opportunity to purchase at a reduced rate and use the mechanism to redeem it for $1.00, enabling a profit. As buyers do this, demand for TOR causes the price to go up again until it reaches $1 USD. These economic incentives act rapidly to maintain TOR’s stability.

HEC/TOR LP

As HEC/DAI, HEC/USDC and HEC/FRAX are mostly owned by the protocol, sufficient liquidity is guaranteed when a TOR redeem action takes place. All protocol controlled HEC/stable LP is there to make sure the redeeming process will be successful.

Layer II: Hector Network Treasury

Although there is the Curve pool as “Layer 0” for swapping TOR back and forth, we still need to mint/ redeem from time to time in a much lower frequency. The mint/redeem at Layer 1 will cause the price of HEC to (slightly) increase or decrease. Although the price of HEC has little impact on mint/redeem for TOR in Layer 1, if the HEC price decreases more than is optimal, the Hector Network treasury will be used to stabilize the value of HEC by implementing buybacks and burns.

Hector and Community Governance

Hector Network is governed similiarly to a Decentralized Autonomous Organization (“DAO”). We set it up this way because we want to be a community-run organization. Our community members are actively involved and have the opportunity to vote on proposals that guide the future of the Hector project. Inclusion is the key word; we are creating an environment that values and makes use of initiatives brought forward by the community. Proposals have the ability to direct developments, rewards, listing proposals, choices for the introduction of (new) bonds, marketing strategies, and much more.
Decisions will be made via snapshot, using HEC, sHEC, wsHEC, and owsHEC as voting tokens. At our Snapshot page users can vote on proposals brought forward by the team. Hector’s ambitions can only be reached with the help of each member of the community.

The Security of Hector Network

In the light of crypto related scams, our team set out to provide a trustworthy experience for our users. We have implemented security measures which fundamentally mitigates the risk of security threats from both internal and external forces. Hector Network’s five main security measures are:
  1. 1.
    Multi-signature Authentication
  2. 2.
    Website Security
  3. 3.
    Audits
  4. 4.
    Locked LP V.
  5. 5.
    Locked marketing/development funds
  6. 6.
    KYC
  1. 1.
    A Multi-signature Authentication System, or multi-sig for short, is a signature process where any development execution needs the consent of multiple people. This prevents individuals from altering contract parameters without the consensus of a trusted board. This can also prevent back-door loophole attacks, and provides a vote-based system to ensure collective consent. We implemented Multi-signature Authentication (multi-sig) on the contracts with Gnosis Safe. Multi-sig customizes how Hector’s assets and contracts are protected. Now a predefined number of signatures is required to confirm the most important transactions. This helps prevent unauthorized access. - The Treasury contract and the DAO Funds Wallet are protected with a 5/9 multi-sig procedure. This means that for every transaction or contract change, at least 5 team members and advisors need to sign the transaction. Community members will eventually be included in the signatory list. - Additionally, all bonds and staking contracts are protected with a 3/9 multi-sig procedure.
  2. 2.
    Our website developer has implemented extra Cloudflare protection against DDOS, and other external threats to both our webpage and DAPP.
  3. 3.
    We audit every part of our protocol through CertiK. Audits can be found here:
  4. 4.
    Hector Network’s initial liquidity was locked via DxSale until May 1st, 2022. Since then the whole liquidity pool is owned by the protocol.
  5. 5.
    80% of our marketing and development funds were locked for a 10 week vesting period, at the beginning of the project.
  6. 6.
    Hector was vetted through a thorough KYC process in November 2021.

Roadmap

The roadmap for Hector Network is an ambitious future for our community, one we look forward to delivering. Here are some brief insights on what is coming soon from Hector Network:

NFT Marketplace

We are thrilled to announce that our NFT Marketplace, Atlantica, is in full development.
Hector Network has been collecting feedback and input from our diverse and enthusiastic traders, developers, artists, and community at large. Our intention is to launch a Marketplace that will soar beyond the current standards and offers much anticipated innovation in this exciting space. As such, we’re working tirelessly to bring this vision, inspired by the Greek legends of Atlantis, to life.
Our ambitions in this field are also in line with our aim to be a Multichain platform. Integration of cross chain transactions is a stepping stone to the future of Defi and NFT alike and Atlantica will be a pioneer in this arena.
Atlantica will be designed for everyone, from all networks, and will move beyond digital art to promote the creation and trade of a wide variety of NFTs. As always, our goal is to offer the best utility available and we’re striving to create a user-friendly space that inspires creativity and community engagement for everyone. As our team continues to expand this project, our personal enthusiasm drives us to create a secure and revolutionary marketplace that is a leader on Fantom and beyond.

DeFi Gaming

DeFi Gaming is a growing space. There are now five DeFi Gaming-Primary projects whose market capitalisations have surpassed $1,000,000,000. The space is still in its infancy: paradigms are forming and evolving, innovation is a constant, and there is a lot of room to grow. Between June and July 2021 alone, the number of blockchain gamers rose 121%. The Play- To-Earn model presents a significant opportunity to generate loyal user bases which can form the foundation of a healthy environment for all.
Part of our expansion will be into the DeFi Gaming sector. We are developing a card game which will make use of our “Mythos Collection” mentioned below. Users will be able to earn rewards by playing. Revenues generated by the game will support the expansion of not only the game, but the Hector Ecosystem in general.

Metaverse

Hector Network is aiming to push the boundaries of user integration on the Fantom Network by launching our Metaverse.
This expansive virtual city scape, also accessible through VR, will integrate many elements of our ecosystem. Our Market, University and other aspects of our brand will be available there. Offering something for everyone, the Metaverse will feature P.v.P and P.v.NPC interaction in addition to zones of safety which are focused on educational and commercial content such as real estate, virtual shops and advertising opportunities.

The Mythos Collection and Hector NFT

This collection consists of 16 artworks based on Greek mythology. The collection will have a total of 10,000 animated NFTs and each artwork comes in 5 different rarities. Besides the amazing artwork, we aim to attract new community members, to grow Hector Network and its ecosystem, to support the Fantom network and to benefit our community. Of course, this collection comes with additional value in the form of reflected earnings, generated in the minting process as well as in the secondary market.

What Is The Fantom Lottery?

The Fantom lottery is a contest with a huge prize pool for our NFT holders. These prizes will be distributed randomly every four weeks. The size and the number of total prizes will vary depending on the amount of earnings from minting and aftermarket sales. Every draw consists of six different projects based on the Fantom network. There will be prize packages with varying values, but always including all six projects.
Five of the six projects will be the same at every raffle, and the sixth one will change. Projects and the community will have the chance to submit proposals to be included. We will carefully review the entries and put them up to a vote!
Over time our NFT offerings will expand to consist of multiple collections with unique advantages and functions. Our first NFT minting took place on Feb 24th 2022 and was to commemorate the “Hector Around The World” campaign, celebrating the geographical diversity of our community. The NFT was free to mint in honor of our incredible community.

Hector Launch

The growth of the Fantom space is a focus for us, and we aim to support that growth in multiple ways. One of those ways is to directly aid the launches of projects on the network. Therefore, we are building a launchpad which will facilitate a safe, fair, and easy launch process. There will be two types of launch:

1. Non-Curated Launches

Non-curated launches will be akin to the ICO launches that users are familiar with. Project developers will be able to run custom ICOs to raise launch funds and interest, as well as lock LPs. This will allow developers access to a Fantom-native platform to launch their projects.

2. Curated Launches

Curated launches will be more specialised than non-curated launches. Project teams who are building something innovative or otherwise valuable to the Fantom ecosystem may apply for a curated launch. If successful, the Hector Network Launchpad Team will give guidance and direct assistance in marketing, development, networking, and other resources. This will allow those projects to get a head start in the markets and cut through the difficulties associated with launching.

Hector Library

Hector University will be a hub of education, intellectual discourse, and community engagement.
Our ambition is to provide a safe, trusted environment for new users to educate themselves and get involved in DeFi and crypto- currency. It will offer up-to-date education on ourown Ecosystem as well as learning modules, articles, educational videos, and quizzes covering a wide array of topics. Adding new content regularly will ensure that University thrives and is able to keep current with the needs of our community and the quickly evolving nature of the industry. In the words of Socrates “Education is the kindling of a flame, not the filling of a vessel.” The ultimate goal of Hector University is to kindle the passion for DeFi that is so much a part of the Hector Network team.

Hector Pay

Hector Pay is one ofthe most ambitious goals we have. We aim to create a payment system which will allow users to pay for real-world items using their (DeFi) crypto balance. The ultimate goal of cryptocurrencies, in our view, is to replace fiat currencies while maintaining the focus on decentralization.
Users will also be able to send and receive coins on multiple networks to and from friends and family using a mobile app. The Hector stablecoin will be used for payments with the lowest transaction fees, and all of this will leverage the power and speed of the Fantom Opera chain.
Since this is among our loftiest ambitions, it will take time to develop, and therefore more information will come in due course.

Structure of the Hector Network Team

Hector Network’s team has been expanding rapidly as we continue to launch branches of our ecosystem. By the end of Q1 2022 Hector Network had nearly 50 employees, with skills ranging from technical or branding specialists to artists. The team is based mainly in the EU and North America, with a smaller number of members in Australia and Asia. Our team is committed to engagement with the community and we achieve this in a number of ways. Particularly, community interaction happens daily on our Discord and Telegram channels and other social media platforms, where regular announcements are shared by the core team. As needed our team runs community updates and AMA sessions to highlight large projects and their progress as well as answer questions from our community.

Long-Term Outlook And Goals

Hector offers a significant opportunity which must be managed diligently, responsibly, and with a view towards long-term success over short-term gains. This is an integral belief of the development team and one which we will always respect. There are three main factors which will determine the success of Hector:

1. Community Engagement

One of the most powerful parts of Hector is the community that supports it. One of the first things a potential user will notice in a project is how the development team interacts with the community, and how the community responds to the development team. It is a priority of the Hector Team to ensure that we are always open, responsive, honest, and knowledgeable.
The Hector Team is very much aware of this and will be creating bespoke campaigns to encourage, reward, and celebrate community members and groups who go above and beyond to be helpful, positive, and insightful. The first step in this program is the “OG” campaign in the discord server - the most diligent members are awarded a tag which lets new members know they can be trusted. Additionally, we plan to run competitions where users can win unique prizes to commemorate the journey we are all sharing.

2. Partnerships

Projects thrive when they utilise partnerships to grow symbiotically. It is no secret that the partnerships with other organisations can bring demand, liquidity, volume and influence. This is why Hector Network plans to produce many strong relationships with other organisations in the industry.
Our first partnership was secured with SpookySwap, an incentivised AMM on the Fantom Opera chain, offering some of the best farms in the DeFi space. We have a good relationship with SpookySwap and have opened a DAI-HEC Liquidity Pool on their platform.

3. Marketing

Effective marketing is an essential part of any business endeavor, and this is no different. We believe that we have a winning product and that wide-reaching, accessible marketing will be the key to unlocking our growth potential. As such, our marketing team spends considerable time researching market trends, examining the successes of other projects in the space, and designing campaigns which will serve our goals of creating awareness and educating potential users.

Appendix A The Equations of the Project

Staking

$sHEC will always be redeemable for $HEC as a 1:1 swap since the DAO will always convert bond sale profits to HEC rewards.
The treasury deposits HEC into the distributor. The distributor then deposits HEC into the staking contract, creating an imbalance between HEC and sHEC. sHEC is therefore rebased to correct this imbalance between HEC deposited and sHEC outstanding. The rebase brings sHEC outstanding back up to parity with HEC so that 1 sHEC always equals 1 staked HEC. This rebasing mechanism facilitates the sHEC = HEC equation above.

Bonding

The price of a bond is governed by the interaction between DAI and the market sentiment of HEC. The sentiment of the market determines the premium applied to bond prices.
The Market Premium is derived from the debt ratio of the system and a scaling variable called BCV, which is in turn governed by market sentiment.
The debt ratio is a variable which allows us to measure the debt of the Protocol to Bonders, allowing for a dynamic Market Premium.
Bond payout determines the number of HEC sold to a bonder. For reserve bonds, the market value of the assets supplied by the bonder is used to determine the bond payout. For example, if a user supplies 100 DAI and the bond price is 25 DAI, the user will be entitled 4 HEC since 100/25 = 4.
For liquidity bonds, the market value of the LP tokens supplied by the bonder is used to determine the bond payout. For example, if a user supplies 0.001 HEC-DAI LP token which is valued at 1000 DAI at the time of bonding, and the bond price is 250 DAI, the user will be entitled to 4 HEC.
HEC has a dynamic supply, meaning that it adjusts with market activity. Supply increases when HEC is minted for staking or bonding purposes.
As each epoch ends, the treasury will determine and mint tokens based upon the defined rate.
When a bond is purchased, a HEC reward is minted. The bond reward will be vested and released at linear intervals. Different types of bonds require different payout calculations. See above for more information.
Every circulating HEC token is represented in the treasury in either stablecoins or non-stablecoins.
When bonds are sold, the stablecoin reserve of the treasury grows. RFV (risk-free value) is calculated differently based upon the bond type.
Reserve bonds in stablecoins like DAI, the RFV is equal to the value of the asset supplied by the bonder.
For LP bonds such as HEC-DAI bond, the RFV is calculated differently because the protocol needs to mark down its value.
The LP token pair consists of HEC, and each HEC in circulation will be backed by these LP tokens - there is a cyclical dependency. To safely guarantee all circulating HEC are backed, the protocol marks down the value of these LP tokens, hence the name risk-free value (RFV).