There can be a lot of confusion in the cryptocurrency community today — especially among people new to blockchain — when it comes to understanding decentralised token economies and the role they can play in making the vision of innovative software entrepreneurs a reality.

The last two years saw many projects raise significant sums in the runaway trend of Initial Coin Offerings (ICOs) to kick-start their project. The general structure of an ICO saw early-stage startups selling tokens for initial capital that could be redeemed for a future product or service they would offer.

Today many of these startups have found themselves facing an unkind economic reality: most have no revenue structure to support their continued operation or their decentralised kick-starter token. Worse still, most have no proven market use case that would allow them to generate the future revenue needed for survival. With no working business model to support their token’s economy, market liquidity is left to the whims of traders, usually in cyclical pump and dumps not conducive to a healthy token economy.

In rarer cases, synergies can be created for the benefit of both a real-world business and the token economy that fronted its initial financing. This is the case with Horizon State, an Australasian-operated blockchain startup enjoying brisk growth in demand from public and private organisations for its secure and cost-effective voting and engagement product.

This article will explore how Horizon State leverages the synergies of its revenue model with the HST token economy central to its operation to maximise the growth potential for both.

A brief history of Horizon State

Horizon State raised just over $1 million dollars in Ether in late 2017 to build its multi-stakeholder, decision-making blockchain product that leverages modern digital technologies to boost the everyday person’s access to democratic processes.

Horizon State quickly became a trailblazer within the blockchain industry. After being selected as a World Economic Forum Technology Pioneer, alongside the likes of Google, Kickstarter, Airbnb and Spotify, Horizon state was voted in seventh place on The Australian’s list of the Top 100 World-Changing Companies in 2018.

The amount Horizon State raised was not a large amount by the standard of many ICOs at the time, and so the company ran a lean startup model — taking care to channel its limited resources to their most efficient purpose in the last two years developing its product suite.

The company’s core focus at this time is to become self-sustaining on customer revenue as quickly as possible. Today, with several political parties, local councils, and private firms signing contracts to use Horizon State’s software, the company’s leaders expect to achieve that organisational focus within six months at current growth trajectory.

Horizon State’s software has been used by its clients for purposes as varied as electing political candidates, AGM’s, and public engagement on sensitive issues. Today these clients include New Zealand’s TOP political party, the South Australia Government, and HLC — a Housing New Zealand’s subsidiary using Horizon State’s platform to improve accessibility for locals to give feedback on a $1.5 billion dollar housing development.

How does Horizon State’s HST token work to provide this mutual benefit?

When Horizon State held its ICO, it became intrinsically linked to the decentralised economy that paid for its creation. The company and token economy benefit from one another: the company helps grow the decentralised economy it created through development, marketing, and revenues, while the Decision Tokens (HST) created at launch represent forward-sold goods for initial capital consumed by the company and are necessary to power and use Horizon State products.

This means that Decision Tokens (HST) must be paid to successfully cast votes — or signal other feedback — in an event held on Horizon State’s platform. The client must either pay their bill in Decision Tokens, or otherwise Horizon State buy the Decision Tokens on the client’s behalf after receiving their local currency. This solves the issue of Horizon state missing out on clients that would find great utility in its software, but are based in jurisdictions or political environments where the legal case to acquire and use cryptocurrencies is currently not clear or sanctioned.

The token mechanics life cycle

Step one — Campaign Quote

Horizon State quotes a customer for the cost of facilitating a decision-making event in their local currency, with an additional goods and services levy if any sales taxes must be applied in that region. The quote for the engagement will depend on the development costs attributable to the level of customisation required, and the expected number of participants involved in the vote or decision-making event.

Step Two — Campaign Execution

The client’s decision-making event is developed by Horizon State, and access rights are awarded to its community.

The client settles their bill with Horizon State. The payment must be made in HST procured by the client from the open market, or — as is more likely — Horizon State will assist them in this process by quoting them in their local currency and later channelling the full amount received into the Decision Token economy on their behalf. This arrangement enables engagements with clients in jurisdictions that have technical or legal limitations preventing them from using Horizon State’s software.

Decision Token purchases made on behalf of clients by Horizon State are executed in multiple tranches over time to smooth market liquidity every time and prevent wild swings in the price of the Decision Token. Any applied local sales taxes are not channelled into the Decision Token market, but are siphoned and paid to the local government.

Step Three — Used Token Mechanics

There are economic laws that apply to the Decision Tokens that Horizon State receives from each client engagement:

Up to 8% of spent tokens are sent to a locked address — a purgatory where they cannot be recovered. This process creates a compounding deflationary pressure to the token economy over time from gradual reductions in the total supply of available coins.

A further 5% of spent tokens are committed to charitable purposes. Currently Horizon State has an agreement with the Binance Charity Foundation to distribute these funds, but in future there are plans to allow the public to decide how these tokens are donated. Horizon State has developed a charity application called Coinpocket for this purpose, which uses the company’s proprietary voting system. Coinpocket demonstrates an excellent use case for Horizon State’s software to potential clients, and allows them to test the platform at no personal cost for a great cause.

In instances where non-government public service providers (like city councils) employ Horizon State for an engagement, an additional 5% of spent tokens will be returned to the local community that organisation represents. The organisation or council hosting the decision-making or feedback event will be encouraged to include an additional question on the voting form asking participants to cast a vote for which public infrastructure project they would like the proceeds from sold tokens to be contributed towards.

Step Four — Recycled Tokens Pool

The remaining Decision Tokens may be liquidated on the free market by Horizon State to help cover development and other operating expenses. These liquidations are also spread out over time, with no more than 20% of total tokens held by Horizon State from a specific engagement eligible to be sold in any calendar month.

These amounts are subject to change according to organisational need.

How the Decision Token economy and Horizon state jointly benefit from this system:

The token economy is central to everything Horizon State does, with all company revenues being channelled through the decentralised economy.

By quoting clients in local currency and making the necessary HST purchases on their behalf, the number of potential clients (and HST buyers) greatly increases.

The more Horizon State products are used, the greater the deflationary pressures enacted on the token economy through reduced supply — the more successful Horizon State, the more demand for fewer available HST tokens.

A greater pool of potential clients means the company is able to sustainably fund ongoing operating expenditures to grow further and capture even greater revenues. This effect is expected to compound as future software modules are added to Horizon State’s product offering that customers can consume HST to utilise. These modules include deliberation, audiencing, analytics, fundraising, incentivisation, social impact and submission capabilities.

Where can you buy HST?

You can find out further information about HST including current price and market volume here: https://horizonstate.com/hst/

Directly buy Decision Tokens (HST) using Credit Card:

This is an easier-to-use brokerage service with no trading functionality.

Coinspot (Australia)

Easy Crypto (New Zealand)

Easy Crypto (Australia)

Using cryptocurrency (more advanced users):

The first step is to purchase Bitcoin or Ether from a reputable exchange using either a credit card or bank transfer:

Coinbase (Available in 103 countries)

Kraken (USA & Europe)

Independent Reserve (Australia)

Easy Crypto (New Zealand)

Step two is to visit one of the exchanges that supports cryptocurrency trading for Decision Tokens (HST):

KuCoin

Bittrex

Blockbid

Upbit

LocalCoinSwap

CoinExchange

HaloDEX

RadarRelay

Exrates

Keep up to date with Horizon State’s latest developments:

Website: https://horizonstate.com/

Blog: https://medium.com/@horizonstate

Telegram channel: https://t.me/HorizonState

Telegram announcements: https://t.me/HorizonStateAnnouncements