Who the HEX is Richard Heart?
Crypto Update on $HEX - first CD of Blockchain. This is not financial advise.
Disclosure: I own HEX. This is not financial advise. I have consumed probably 40 hours of video watching Richard Heart (founder of HEX) and everyone who loves/hates him,
Of all the cryptos I have dug into, HEX has to be the one with the most passionate following. And with passion you always have two sides - those who love HEX, and those who hate HEX. I am not going to resurface old debates or arguments, but instead look at the token itself, and give you a fair and balanced view point on why I think it has been successful to date.
What is HEX?
It is the crypto equivalent of a Certificate of Deposit (CD). But instead of locking away your money with your Bank and getting 4% - you can lock away your money at get up to 40% annual return (and of course benefit from the value of the token going up). In order to earn interest you first buy HEX and then you stake it. Simply put, you are locking up your HEX for a period of time. The longer you stake, the more interest you make on your money. (If you are like me: check out white paper and code)
Why Lock up your Money?
If you need access to your money and focused on trading crypto for short-term gains, HEX is not for you. If you want to hold and let your money produce more money, than HEX’s model is a good choice. HEX is really for people who 1) Want to have interest on their money and 2) Benefit from any increase in price of the token. In HEX’s case, it has gone up in value in the past year over 100x.
Is HEX Deflationary?
Yes. HEX burns a portion of the tokens when stakes are ended prematurely. (And some go to an origin address presumably to the founder(s) and future development). This puts more value into the hands of people who own HEX. The goal is to motivate people to stake their HEX with high interest and penalize them if they end their stack early. The concept of motivating people to hold HEX is the backbone of the contract. This is why a high interest rate can be paid without feeling inflationary (where more and more tokens are being created to pay the interest).
Who is Richard Heart?
Richard Heart (Check out his Youtube Channel) is the lightning rod of HEX. He founded HEX and has a little bit of a reputation. Some people would call him a crypto-genius and others a scam artist. I think of him as a modern data P.T. Barnum.
PT had a famous saying - “There is a sucker born every minute.” And you can imagine how many suckers have bought into cryptos that were complete scams. Both PT and Richard acknowledge the fact that suckers do exists and certainly can be preyed upon. But I don’t think either of them intend to take advantage of them directly. In fact, Richard would argue he is here to help them avoid scams, and embrace a more conservative approach to crypto investing with HEX.
After watching hours and hours of Richard Heart on YouTube, he comes across a someone who clearly understands crypto at the most technical level, has acknowledged multiple times how crypto scams work, and also has surrendered to the necessary evil of “crypto hype marketing”. But all the while, there is something very genuine and transparent about his presentation and marketing.
Richard Heart is the PT Barnum of Crypto. Part Showman, Part Marketing Genius, Part Humanitarian.
My conclusion over whether HEX is a “scam” or just “engineered cash flow” - I tend to side with the latter. People who call certain projects “Scams” just because they don’t like the founder or dismiss the business model because they are purists - don’t really hold weight in my book. The reality is - whether you like Richard Heart or not because of his showmanship - HEX is code. The Code is what it is and it runs. There is nothing Richard Heart can do to stop it or change it. As the face to HEX he certainly has influence over the emotional state of the community - but if HEX was a pure SCAM we would have found out by now.
Using HEX as a hedge on Bitcoin
After understanding the economics of HEX and digging into the contract and code, it really struck me as an interesting hedge on Bitcoin. Although both of them have risen in value (HEX more than BTC in the past year) - the idea of locking up your crypto and earning 30%+ interest is a more conservative long-term mentality to building wealth. I also notice that in many cases when BTC goes down a significant %, HEX tends upward. Of course, there are many factors that can impact this pairing - but it’s another reason I added HEX to my list of favorite cryptos.
One of the key recommendations I have for anyone looking at investing in crypto is understanding future events that could impact (good or bad) the value of the coin. For example, we all understand that inflation is a big driver for Bitcoin as a valid replacement for Gold. So anytime there is a FED meeting where inflation or interest rates are discussed, we can expect a move in BTC.
With HEX, there are a few events that could impact the value:
Richard Heart and HEX is looking to fork ethereum and create a new coin called Pulse. Why? Mostly to provide cheaper gas fees for buyers and sellers of HEX. There also could be an opportunity to add more functionality or flexibility in the new coin as well (to be determined). However, when PULSE does launch, it will impact the price of HEX (because it will be competitive). Heart has eased fears by stating every owner of HEX will receive a mirrored amount on the PULSE chain. This ensures if one tokens price goes up and other goes down - existing owners don’t get screwed. There is not much info (not everything has been decided yet) - but expect more to come out in May about the plans for PULSE. I think the announcement of Pulse has slowed down the investment into HEX due to uncertainty.
ALT Season could be big. I am not sure exactly how this impacts HEX, but as ALT Season (people buying crypto that is not Bitcoin) heats up - HEX could be seen as an underperforming option. The primary value proposition is 30% a year - which doesn’t compete when most ALT coins are going up 30% a month. Obviously, HEX could also go up in value (as it has been doing for the past year) - but it has leveled out and become an outlier in the recent months.
There are a good amount of Stakes (mostly short-term stakes) expiring in the coming months (where Pulse could add some volatility). See the graph below on how many stakes are expiring in the next few months.
Graph/Data available at https://hex.vision/
The above graph shows the number of stakes that are expiring. You can see a majority in the next 30-45 days (which is pretty normal because many people stake their HEX for 30 days or 2 months). However, the question is - will these people “re-stake” their HEX and keep it going - or will the launch of Pulse give them hesitation. The good news is people will most likely keep their HEX staked in order to benefit from the issuance of tokens on the Pulse Chain for every HEX you own.
What if Pulse and HEX Maintain value?
The best case scenario for anyone holding HEX would be both networks maintain their value. If that happens, then essentially anyone how owns HEX today will double their value when they issue Pulse tokens. There is a real possibility of doubling your money if HEX and Pulse maintain their value. The only way to do this would be to ensure good communication with existing holders, so there is no “race to sell” HEX once Pulse is live. My best guess with what I know today is that HEX will quickly lose value and Pulse will essentially replace the value of HEX you lost. Since Pulse will have lower gas fees, users will migrate to Pulse and eventually there will be little use for HEX since Pulse will do all the functionality and more.
The only way HEX maintains it’s value is for Richard Heart and the HEX development team to find an innovative way to motivate people from re-staking and keep staking on HEX with their existing holdings. A mass migration from one chain to another would have a major impact on price.
My prediction on HEX is 10 cents in the next year (however, if Pulse goes live - then the value will mostly move to Pulse and HEX will deteriorate over time). HEX currently has a market cap of $3 Billion (if you base on minted HEX) - if you look at all outstanding HEX it is $10 Billion. My guess is that the combined market cap of HEX + PULSE will exceed the combination of both (1+1=3) if the launch is successful. So getting in now - would give you 2-for-1 potential for a nice multiple.
I guarantee half of you won’t like Richard Heart and the other half will love him. But before you base any decision on whether you like someone, it’s important to understand Heart’s role. His role is to be a marketer. The more he is in the public eye and doing webcasts each week - will provide the needed exposure to HEX to keep acquiring new buyers. Will he make a lot of money off HEX - yes. And because of that - he is the last person who would want to tarnish or destroy HEX. I dismissed a lot of the negative press or posts he has received because they were based on hypothetical claims and I believe Heart is very protective of his reputation and is doing everything he can to win the crypto game. He wants to be famous. Not infamous.
And good press, bad press - PT Barnum understood.