HEX: The tale of the crypto project that rewards you for locking away your money

• HEX operates a “time product” construction that enables its customers to lock up their HEX tokens for rewards. 
• The worth of the HEX token has dropped by over 90% in lower than six months.

Typically described as the primary blockchain Certificates of Deposit (CD), HEX staking kicked off in December 2019 as an Ethereum-based cryptocurrency undertaking that gives a method for traders to earn curiosity on their “locked-up” HEX tokens.

HEX is a blockchain-based undertaking that replicates a standard product within the banking world – a time deposit. In conventional finance, CDs discuss with a particular kind of financial savings account supplied primarily by banks. When clients put money into a CD at a financial institution, they comply with “lock” a few of their cash with the financial institution for a acknowledged time period interval.

As a reward for holding the cash locked for the required tenure, the shopper is obtainable a set rate of interest typically greater than common financial savings accounts supply. Upon maturity, the shopper can withdraw its preliminary funding and the earned curiosity.

HEX for dummies

Designed to work equally to how CDs work in conventional finance, HEX presents curiosity to customers who “lock” their cash (HEX tokens) by staking them on its platform. 

Individuals are allowed to stake their tokens for various lengths of time, starting from as little as 24 hours to so long as 5,555 days (about 15 years). Throughout this era, members are usually not allowed to entry or switch staked belongings. 

Like CDs in real-world banking, the longer the staking tenure, the upper the returns that accrue to the consumer. This incentivizes customers to stake for extra prolonged intervals and reduces promoting stress on the HEX token, which could negatively affect its worth if allowed to proceed unabated. 

When customers stake their HEX tokens, they obtain T-shares, and their staked HEX is burnt. These T-Shares act as a measure of customers’ stake within the system and decide their share of rewards on the finish of the maturity interval. 

In keeping with the undertaking’s whitepaper, the variety of T-Shares that accrue to a staker on the platform is calculated by multiplying the quantity of HEX tokens staked with the present T-Share worth and the size of the staking interval. 

For instance, in line with knowledge from HexStats, the pay per T-Share as of twenty-two July was $557. Subsequently, if a consumer staked 500 HEX tokens on that day for a 365-day time period, they’d obtain 278,500 T-Shares by 22 July 2024, paid out in HEX tokens. Nevertheless, it’s key to notice that the variety of T-shares you obtain is versatile. It will probably change over time. 

You can’t eat your cake and have it on HEX

As talked about above, customers are usually not anticipated to unstake their claims through the staking interval. Nevertheless, the Ethereum sensible contract that powers HEX has a characteristic that permits customers to terminate their stakes earlier than the dedicated time. This isn’t with out penalty. 

In keeping with the whitepaper, the penalty is set based mostly on ½ of the times they initially dedicated to staking, rounded up. For instance, in the event that they devoted themselves to staking for one year (1 yr), the penalty could be calculated based mostly on 182 days (½ of one year), no matter what number of days they’ve really staked.

There’s a minimal penalty interval of 90 days that’s utilized to any consumer who decides to withdraw their tokens early, no matter their preliminary dedicated time. So, even when somebody initially dedicated to staking for a shorter interval, for instance, 179 days, the penalty would nonetheless be set to 90 days.

State of HEX staking

In keeping with knowledge from Elastic, because the undertaking’s launch, a complete of 60,910,561,281 HEX tokens have been staked. Since December 2019, 369,825 stake positions have been closed, with 428,710 open stake positions remaining by press time. 

Supply: Elastic

In keeping with the Open Stakes by Anticipated Finish Time dashboard on Elastic, the variety of HEX tokens whose staking intervals will expire will decline progressively through the years. By 1 October 2038, 59.03 million HEX tokens (on a 5-day shifting common) will attain their maturity dates. 

Supply: Elastic

Additional, the each day rely of staking positions opened on HEX has climbed considerably within the final three months. Throughout the identical interval, the circulating provide of HEX tokens declined steadily.

Supply: Elastic

Relating to penalties on the undertaking, knowledge from Elastic revealed that 4,423,713,660 HEX tokens have been billed in penalties for each early and late unstaking. Late unstaking happens when a consumer leaves their stake “unattended after it has sat for its dedicated interval.”

An evaluation of month-to-month penalties incurred by HEX customers revealed a decline since October 2021. In June, 30 million HEX tokens have been paid in penalties. This represented a 93% fall in month-to-month penalties charged inside a two-year interval. 

Supply: Elastic

HEX returns stay hexed within the final 4 months

After rallying to a worth excessive of $0.118 on 23 March, HEX’s worth has since declined. Exchanging fingers at $0.009807 at press time, the alt’s worth has dropped by 92% in beneath six months, knowledge from CoinMarketCap revealed.

Supply: CoinMarketCap

On a each day chart, key momentum indicators have since trended downwards, signaling a free fall in HEX accumulation since March. 

Supply: HEX/USDT on TradingView