HEX is up 15,000%, a look at the best performing cryptocurrency of 2020

Blockchain Daily
4 min readJan 1, 2021

Many people say that HEX is a scam, but why is it up 15,000% in 2020? We take a closer look at HEX to see what it really is.

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HEX was created by a Bitcoiner by the name of Richard Heart. He gave away free HEX to all Bitcoin holders that were holding Bitcoin on the snapshot day of December 2nd 2019. Up until November 2020 people that had held Bitcoin on that day were able to claim free HEX, with one condition, that HEX was to be locked up for 1 year after you claimed, earning a very high interest rate.

There was another way to get HEX that stopped in November, buy it from HEX.com. When you do this using ETH, the ETH goes directly to the developers. What they do with this ETH is a mystery, intentionally kept secret because if they made promises about future work they could be dealing with a Ripple-like situation right now where they are sued by the SEC for selling unregistered securities. Some claim that the developers ran off with all this ETH, while others say it’s used for anything from market making to marketing and development.

Heart foresaw the situation with Ripple and decided that he wasn’t going to market HEX by making any promises. The reason why Ripple got sued by the SEC was because they marketed their cryptocurrency too closely to a security by making a lot of promises about future work. Instead Heart decided to release a fully finished and audited product, and make no promises about future development or support. Having a fully finished product is rare for the cryptocurrency world, as most cryptocurrencies are released partially finished and developed along the way, even Bitcoin was and still is an unfinished product.

The HEX smart contract is built on Ethereum. It’s had both economic audits and security audits. It’s been running bug free for over a year, and the price is up over 15,000% in 2020. That means if you had put $100 in HEX at the beginning of 2020 you’d have over $15,000 now. Not only that but if you had staked your HEX you could have earned a large interest rate paid in HEX on top of that. So why does everyone call it a scam?

The claims of it being a ponzi scheme are obviously false. A ponzi scheme will generally promise an impossibly high interest rate or return which must be paid out in a hard asset like dollars which cannot be created out of thin air (except by the Federal Reserve). HEX has high interest rates but since it’s paid in HEX and because the network can always mint more HEX it will always be able to pay that interest rate. Even with a relatively high interest rate for stakers the inflation rate of the supply remains low at 3.69% a year. HEX also doesn’t promise any sort of specific return on the price.

The other big claim for why HEX is a scam is that the “Origin Address” holds a large amount of the HEX, and is constantly receiving more HEX from stakers who end their stakes early. This is a legitimate concern because the Origin Address could easily destroy the price if they dumped all of their HEX.

So far, this hasn’t been the case, and in general it doesn’t make sense for the Origin Address to destroy the price because they have so much invested in it. If they were going to sell it would make more sense to do it slowly so as to not hurt the price too much and to be able to sell it at a higher price. It’s also not uncommon for executives to own a large amount of their own stock, which isn’t generally viewed as a problem in traditional markets.

The fully diluted market cap of HEX currently sits at over $7 billion, technically making it the 7th largest cryptocurrency. However, this number is disputed by some because since the Origin Address holds a large amount of this HEX some say it inflates the market cap. At $17 million the volume of HEX is about 100 times lower than other top 10 cryptocurrencies, and it’s virtually only traded on Uniswap and other decentralized exchanges built on Ethereum.

So is HEX a scam like many people say? We don’t see any obvious scam signs, but it is a high risk investment if this mysterious Origin Address decided to sell all their HEX and destroy the price. Up to this point it doesn’t seem like that is happening and HEX keeps on climbing, making a new all time high of 2 cents on New Year’s Eve.

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