Company: HBAR
Filing Date: 2025-09-09
Form Type: S-1
Source: 0000950170-25-113803
Chunk: 41

Company: Grayscale Hedera Trust ETF
Filing Date: 2025-09-09
Form: S-1
Chunk 41
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-based factors, including the point at which an unstaking transaction is submitted during an epoch, the overall responsiveness and reliability of the Hedera validator network (commonly referred to as “cluster performance”), the speed at which validators reach agreement on the network’s state (commonly referred to as “consensus pace”), network congestion, and validator-specific behaviors such as the batching of unstaking transactions, each of which may increase deactivation times. Once the de-activation period ends, the stake becomes fully inactive and can be withdrawn.

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In light of the foregoing, the Sponsor intends to implement certain liquidity procedures, which it believes will ensure that it will satisfy existing and reasonably foreseen redemption requests. The Sponsor intends to maintain a portion of unstaked HBAR in the Trust (the “Liquidity Sleeve”). Because the HBAR in the Liquidity Sleeve is freely transferrable, there is no timing mismatch between settlement of Shares in primary market redemptions and the HBAR transfer time. The percentage of the Trust’s HBAR comprising the Liquidity Sleeve will be dynamic and subject to adjustment based on anticipated primary and secondary market activity of the Shares and the HBAR de-activation process. As of the date of this filing, and subject to the satisfaction of the Staking Condition, the Sponsor generally seeks to stake as much of the Trust's HBAR as is practicable (i.e., up to 100%) at all times, with the remainder of the Trust's HBAR remaining unstaked in order to address the various exceptions and other considerations described herein. The approximate percentage of the Trust’s HBAR at all times that is staked each day will be reported the following day at 4:00 p.m. New York time, on www.etfs.grayscale.com/hbar. In addition, if the Staking Condition has been satisfied with respect to such activities, the Sponsor, on behalf of the Trust, may enter into short-term financing arrangements with the Custodian and/or any Liquidity Providers to provide HBAR in an amount sufficient to satisfy existing redemption requests, provided that any costs associated with such financing arrangements shall be borne by an Authorized Participant. These liquidity risk policies and procedures are intended to be consistent with NASDAQ’s proposed generic listing standards.

Proof-of-stake blockchains are a relatively recent innovation, and have not been subject to as widespread use or adoption over as long of a period of time as traditional proof-of-work blockchains.

Certain digital assets, such as bitcoin, use a “proof