Horizon Protocol Supply and Inflation Policy


  • The Horizon Protocol inflation policy incentivizes collateral providers, liquidity providers, and synthetic asset onramps.


The Horizon Protocol inflation policy incentivizes collateral providers, liquidity providers, and synthetic assets onramps. The Horizon Protocol functions around collateral to back synthetic assets (zAssets) linked to real world assets using price oracles. There is a 0.3% transaction fee when trading zAssets that translates directly into rewards for those staking HZN and providing liquidity in LPs. We project that the incentive at early stages will be insufficient for users to perform this critical action required by the protocol. Therefore, we will have an inflation policy designed to stimulate growth at early stages by increasing the incentive to provide collateral and liquidity for the protocol as well as synthetic asset onramps.

Horizon Protocol supply and inflation policy

An initial launch supply of 100,000,000 HZN will be minted upon launch of Horizon Protocol on mainnet.

  • 10% (10,000,000 HZN) will be reserved for the IFO on PancakeSwap.

Initially, only the 10% IFO allocation will be circulating in the market, followed by the Liquidity Mining allocation, expected to be released over the course of a year. The Ecosystem & Community Fund will NOT be initially circulating and will be used to support the protocol and community via stabilization of synthetic asset collateralization, market making for synthetic assets, protocol grants, bounties, partnerships, marketing and other community incentives. There is no team or investor allocation.

The inflation policy will take place over an approximate four and a half year period (the time needed for the starting inflation rate to reach terminal inflation) increasing the initial supply of HZN from 100m to approximately ~260m. Inflation will be calculated and distributed weekly. The first 40 weeks are front loaded at a rate of 75m per year distributed weekly (~1.44m/week). The inflation rate will begin smoothly reducing at a weekly rate of 1.25% until week 235 where the policy ends when the terminal inflation rate of 2.5% per year is reached.

The following timeline outlines key events from the initial launch to the end of the inflation policy when terminal inflation is reached.

  • Initial launch phase begins with 100m HZN tokens minted. HZN will be distributed through community mined staking, liquidity pools, partnerships, grants, bounties and other rewards.

The following tables and graphs show a summary of the total and increase in supply of HZN starting from the initial launch.

Table 1. Period/Year and Total Supply — All HZN will be distributed to collateral providers, liquidity providers, and synthetic asset onramps.
Graph 1. Total HZN supply after the inflation policy starts.
Graph 2. Weekly inflation displayed over 7 years after the inflation policy begins.


Horizon Protocol’s inflation policy will stimulate early growth, and the overall system health by rewarding users that provide collateral and liquidity to the system as well as to encourage synthetic asset onramps. It will also promote a positive feedback loop by utilizing HZN as it was designed for. The additional HZN rewards for users staking HZN as collateral will also automatically increase their collateralization ratio making Horizon Protocol more secure. The policy adds value at an early stage by strengthening the protocol’s core functions where the compounding nature of growth is critical to success.

As always, the team at Horizon Protocol want to thank the community, whose continued support and feedback make all of this possible.

The Horizon Protocol inflation policy is subject to change in the leadup to the release of Horizon Genesis should any circumstances arise in internal and community test scenarios that demand it for the benefit of the protocol. Any changes thereafter would require a community consensus for changes to be made.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Horizon Protocol

A DeFi platform facilitating the creation of on-chain synthetic assets representing the real economy. https://horizonprotocol.com/