Staking HEX is Paying Big Interest

The DeFi Cryptocurrency HEX is giving the traditional Certificate of Deposit an upgrade and its reaping rewards for those who hold (or as we say in the crypto sphere - HODL).

Want to make money in crypto? Instead of waiting for the next trip to the moon, you may want to let your money do the work for you and think like a bank. One cryptocurrency that gives you the option of making serious interest on your stack is HEX. Not only has it reached the top 10 in market cap of all cryptos, it is the only one that rewards you for holding.

HEX operates much like a traditional Certificate of Deposit you can get from your bank today. 

If you are not familiar with how Certificates of Deposit (a.k.a. CD’s) work it’s actually quite simple. First hitting the scene in the 1960's, the traditional time deposit - or certificate of deposit (CD) - allowed banks to attract more people to want to deposit their money by paying highest interest if they promised not to withdraw the money for a period of time. 

At the time, this was a revolutionary idea that essentially saved banks when they were running out of money to lend.  Fast forward to today, the CD no longer provides the returns of 17% as it did in 1980. Today, if you get 1% APY on a CD consider yourself lucky. Why the big change? Partly because inflation simmered down over the last few decades - but the real reason is because banks are no longer desperate for deposits from me and you - since the U.S. Government started printing all the cash they needed.

This is where HEX comes in. Think of it as the CD 2.0. Leveraging the new decentralized architecture of cryptocurrency it can provide better interest rates by eliminating the need for a traditional bank and reimagining how you can monetize time. In fact, HEX pays upwards of 40% interest on HEX you stake. “Staking” is when you lock up your HEX for a period of time of your choosing. It has been my experience the interest ranges from 15% to 25% for shorter stakes.

How is it possible HEX produces better returns than my Bank?  

How is HEX.com consistently paying its depositors (or stakers) double-digit APR interest? In a word: code. Yes, that’s right - software code…. Sounds crazy right? How can that be? Well, much like how Amazon replaces thousands of brick-and-mortar storefronts with code - HEX replaced brick-and-mortar banks with openly viewable, fully audited code. 

Without going too far down the rabbit hole, the code has three basic rules (that are immutable and will never change). The first is it rewards those who stake their HEX by paying interest. The longer you stake, the more interest you earn. Second, it penalizes those who end their stake early which motivates owners to hold and not sell. Third, when someone stakes their HEX, the HEX is actually “burned” thus removed from the circulating supply. This is what enables the value of HEX to rise. 

It’s this dynamic that fuels the ability to pay high interest rates for those willing to stake and hold. It is the monetization of time and fortitude. Those who sell early, essentially reward those who don’t. In fact over 2.3 Billion HEX have been paid to stakers in the last 16 months (that equates to 138 Million dollars at current price for HEX).

Of course, there is more to a bank than money. After all, we trust banks, right? 

Well, I guess it depends on who you ask. Certainly banks have always had a good reputation of protecting our money - but the reality is most of our money is already digitized in computers. Banks don’t lock up our money in safes anymore - in fact they turn it from paper to digital. So in essence, they also use “code” to hold our money. The big difference between banks and HEX, is the HEX code can’t be changed and you can actually view it online (see: https://github.com/BitcoinHEX). The Banks can change their code (and minds) at any time and everything is done behind closed doors.  

Another form of trust is built through community. The more people that trust something, the more trustworthy it becomes. After all, isn’t that why we place value on a piece of paper called the dollar? Well, HEX has built up quite a community of trust over the past year since it launched. According to nomics.com, HEX has a $31 Billion dollar market capitalization with over 260,000 people who own HEX. 

The combination of Banks lowering interest payments to customers, losing public faith and rising inflation has created a perfect storm for an alternative that does not require a middleman and is not manipulated by a central bank. HEX is CD 2.0 that removes the bank and by doing so is able to provide a better way for your money to make money.

This trend explains why HEX has reached all-time-highs this week. Much like how Bitcoin is replacing Gold as the traditional store of value, HEX is replacing the CD and other interest-bearing financial instruments. Even though cryptocurrency is new, the ideas that it’s based on are tried and true.

Source: Coinmarketcap: https://coinmarketcap.com/currencies/hex/

Many people are speculating on why HEX price has gone from $0.015 to $0.06 in the last month. There are a few potential factors that are driving the value of HEX. The first is the fact it is paying higher interest than any other cryptocurrency option. Although most people may drive their income off buying low and selling high, there is an increasing demand for paying interest on accounts as another form of income.

The second factor is the rise of decentralized finance (DeFi) as an area where crypto investors are seeing most of the growth this year. HEX was early to the game in 2020, but is now catching the attention of more and more people looking at DeFi.

The third factor is that it is working. It was launched early 2020, and with a full year under its belt it has delivered on what was promised in the code. Very few cryptocurrencies can say the same thing. Most promise and never deliver. HEX has not only produced the interest for those who staked their HEX, but also has provided very high returns for those who have owned HEX.

Of course, it’s only logical since HEX holders are now the new Bank. And we all can agree - Banks may not be flashy rockets going to the moon, but they make money.