Cryptocurrency’s Finished Product — HEX.com — Continues to Deliver Outsized Yield, 100% Uptime and Unprecedented Onchain Commitment. As Grayscale Expands, HEX Can Open Doors to Unmatched Levels of Income Investor Participation
Grayscale is the tip of the spear on Wall Street when it comes to regulated cryptocurrency based investments. Indeed, Grayscale is paving the way for investors by providing access to shares in about a dozen different cryptocurrency trusts without investors having to hold the actual underlying coins. Today investors’ attention and curiosity aimed at this special asset class is ever-growing, with Grayscale’s assets under management a clear indicator of this.
Over the last year Grayscale’s funds have grown over 20x, from $2 billion to north of $44 billion. Being the tip of the spear in this sector — and Wall Street’s rising star — also means Grayscale shows prowess in effectively maneuvering to add alpha through inclusion of new product structures reflecting the many financial advancements observed in the digital asset space.
This article elucidates the untapped growth Grayscale Investments stands to reap by offering the income objective investor exposure to a popular, real-world income producing digital asset in DeFi’s first mover, the fully audited and finished product: HEX.com.
HEX has succeeded in bringing banking’s second most popular product — the time deposit — to the blockchain. With a market capitalization of $7.75 billion and Ranked #15 at the time of writing, HEX finds itself in the early days of a long and sustained growth trajectory. Additionally, outsized yield is paid daily to The Staker Class in HEX, where over $820 million is currently in active stakes out to 15 years; this type of verifiable onchain commitment seen in HEX is unprecedented in the cryptocurrency space.
Not shown: Additional 40% APR on top of HEX’s price performance, paid daily to stakes of average length.
A Grayscale First: HEX Perfectly Addresses The Income Objective Investor in a Digital Asset
Grayscale’s Bitcoin — and all Bitcoin — exist onchain, but they do not earn more Bitcoin. In order to realize yield on top of Bitcoin you have to take risk: you have to give your coins to someone else to lend them out to get that yield. You hope they come back; oftentimes, they do not. This inescapable risk means Grayscale’s Bitcoin must not be lent out, and therefore cannot realize yield.
In HEX you — and you alone — control your private keys to your stakes which receive yield paid out every single day. If you lock up your HEX by staking it then you’re going to make more HEX. The longer you lock up your HEX, the more HEX you earn.
Allowing everyday investors to participate in the outsized, trustless interest HEX yields can be an absolute game changer for Grayscale. For the first time ever Grayscale would be able to offer an income producing asset to address a much wider swath of investor objectives.
What if a Regulated Wrapper Representing HEX Shares Existed For Everyday Income Investors?
Why shares instead of just the HEX token: because in HEX it is a stake’s shares that get paid yield every day. HEX is the only secure cryptocurrency with 100% uptime that lets you keep your private keys while earning such high yields through staking. Longer stakes receive more shares and earn even higher yields. Average length stakes at the time of writing are receiving approximately 40% APR.
…just last week another HEX investor locked over $10 million in a stake for 10 years, and there have been multiple Ethereum Genesis Wallets with some 700,000+ ETH observed onchain making similar stakes in HEX.
In Grayscale there is no right of redemption (i.e. one cannot turn GBTC into BTC), and this is especially advantageous for Grayscale in the case of HEX where staking for longer time periods earns investors an even higher yield. At the time of writing 15 year stakes in HEX are averaging about 60% APR.
Grayscale Investments
Taking advantage of this, just last week another HEX investor locked over $10 million in a stake for 10 years, and there have been multiple Ethereum Genesis Wallets with some 700,000+ ETH observed onchain making similar stakes in HEX. This type of onchain commitment and high APR has never been seen in crypto before; it cannot be done with Bitcoin, but with HEX it can.
If storing value securely, addressing the time value of money, and reducing pollution by rewarding stakers instead of miners are good things, Grayscale’s digital asset suite stands to benefit massively with HEX.
Taking Security Seriously:
HEX is a Fully Audited, Complete Product
HEX was delayed almost a year to get security right, which is why it has 3 Audits; 2 Security Audits, 1 Economics Audit. HEX has no admin keys. No off switch. No pause switch. It’s fully autonomous.
If HEX.com goes offline, I die, the system continues to work fine. It is unstoppable: The code is on the blockchain. You run it. You mint your own rewards. That’s it.” –Richard Heart, HEX Founder
The Competitive Advantage: An Economic Moat
HEX set a new standard in security and transparency when it went live on December 2nd, 2019, launching fully complete with 3 separate audits by 2 of the top contract auditors in the world. Bitcoin is still not audited and has consequently suffered from 2 inflation bugs where anyone could print as many free Bitcoin as they wanted. HEX has isolated consensus code so that it cannot ever be compromised in a network upgrade, like what happened to Bitcoin twice. HEX is more secure than Bitcoin, and by bringing the second most popular banking product — the time deposit — to the blockchain, HEX accomplished something else rarely seen in the cryptocurrency space.
Candidly, what HEX accomplished is an extreme rarity in crypto: HEX launched fully complete. This separates HEX from 99.99% of other cryptocurrencies which appear to remain in a perpetual project status; promises of future developments (which sometimes never come) mean those cryptocurrencies rely on the future work of others, often indefinitely. There are no expectations of future work from others in HEX; it is openly viewable code, existing onchain, working as designed for its users with 100% uptime.
A clear difference exists between Grayscale’s existing products and HEX; adding HEX opens enormous opportunity.
If you take a look at Bitcoin’s inflation model for coin distribution, it went from 0 coins to over 18 million in about 10 years. It’s important to note the price of Bitcoin also appreciated over 2,000,000x during this high inflationary period because multiplying user count has a far greater impact.
Few recognize that Bitcoin’s price went up faster when it was a younger network with higher a inflation %, because multiplying user count matters more. HEX.com/techspecs
HEX efficiently expedited this, completing its entire high inflation distribution period inside its first year. This allowed HEX to then immediately go into its low inflation phase with a maximum 3.69%. Because HEX pays inflation to The Staker Class, and at the time of writing the average stake length is over 5.3 years, the 3.69% inflation figure is truly a maximum because only a minority of stakes mature in the current year.
Due to the expensive costs involved in mining — such as hardware, upgrades, electricity, leases, and so on — miners are net sellers, whereas HEX pays its inflation to The Staker Class who support and protect the price.
At the time of writing there is approximately $820 million in HEX staked out to 15 years, with an average stake length of over 5.3 years. This type of verifiable onchain commitment is unprecedented in cryptocurrency.
Because HEX enriches The Staker Class who are de facto supporters of price, many believe HEX will outperform both Bitcoin and Ethereum’s price performance because their inflation is paid to miners who are net sellers. HEX’s design not only mitigates drawdown volatility risk during corrective market phases, but it stands to potentially thrive even in a bear market.
HEX has already proven to be a powerfully decorrelated asset inside the crypto space. With its innovative staking design and high yielding returns it is not surprising to find HEX dancing to its own tune. This also begs the question of performance metrics that will be observed in even larger corrective market cycles at some point in the future. It is possible, intelligent minds speculate, that due to its structure and design HEX may be the first cryptocurrency to experience sustainable growth even during a widespread crypto bear market.
The uniquely clever product design of HEX utilizes a shares issuance model when HEX is staked. Users may stake HEX for any time period of their choosing, up to a maximum of 5,555 days, and their stake is allocated shares as a function of how much HEX is staked and for how long.
The shares received when staking guarantee an active stake’s principal is protected and receives interest paid daily — every day — at 00:00:00 UTC. Average length stakes at the time of writing have, and continue to, receive approximately 40% APR.
Staker.App for iOS and Android Makes Staking HEX Easy
Staker App (pictured) for iOS and Android makes staking HEX easier than ever, and even allows the user to pay gas with their choice of HEX, USDC, or ETH.
Having more shares in HEX is a lot like stacking up more Bitcoin miners for more hashrate without having to own the miners or pay the electricity bill. The more shares you have, the more HEX minting power you have.
Video: Zero to Expert HEX Staking in 3 Minutes
Inception
HEX was founded by well-known serial entrepreneur and early Bitcoin adopter, Richard Heart. With his businesses producing him over $60 million a year by 2003, Heart took early retirement at that time and traveled the world. Years later Bitcoin caught his attention when it was trading at around $1, and he soon began mining full Bitcoin blocks by himself. Placing a high value on accuracy and attention to detail, Heart became a subject matter expert on Bitcoin and identified ways it could be improved.
Richard Heart, Founder of HEX, speaking at CryptoFin
Today Richard Heart is a well-versed proponent of Ethereum and stimulating thought leader champion across a panoply of subject matter.
A polarizing figure, to be sure, Heart places a high value on accuracy and is considered a gifted visionary by many of his peers. HEX’s design and transparency across all observable metrics suggests they may very well be right.
⬣ HEX Viewable Source Code
⬣ HEX Contract in Layman's Terms
In Conclusion
While HEX appears to be a perfect fit for Grayscale’s investment products, especially to capture income investor participation, it is anyone’s guess if behind closed doors the firm is considering this rising star. One thing is certain, however: HEX’s design and performance continue to benefit investors in HEX with outsized returns and a mighty inspiration for their future.
Related Articles:
Related Articles
'You've Done The Impossible!' Declares Bitcoin.com Host to Richard Heart, Founder of HEX
Ethereum Genesis Wallets of 700,000+ ETH Move Big Blocks Into DeFi Staking Product HEX, Chainalysis Reveals
Find Out More About HEX:
⬣ More Info: HEX.COM
⬣ News and Updates: Follow on Twitter @HEXcrypto
⬣ Community: Engage, Q&A, Have Fun: https://t.me/HEXcrypto
📺 Watch HEX Daily News LIVE Every Day, 3:40pm MST on Twitch: The Hexologist
📺 Watch LIVE Discourse Syndicate Every Monday, Wednesday, and Friday (The Friday Night Hangout) at 7:00pm PST on Twitch: Discourse Syndicate (Discourse Syndicate is intended for mature audiences only)