Hedron

I own a lot of HEX. I won’t call myself a HEX maximalist but I own a lot of HEX, to the tune of about 90+% of my investment portfolio where the rest is in real-estate. So when it comes to crypto, it’s all HEX. This will divest soon with PLS, PLSX and LOAN — but I have no expectation of profit from the work of others so I may in fact really only have HEX…

Today I want to talk about Hedron because it’s pretty cool. Here are some key technical points you need to understand about Hedron (HDRN)

It’s free for HEX stakers.

You get free tokens, it’s an airdrop, and you should claim it now. You will receive 1000 HDRN for each TShare you own, for each day served. There’s an early bird multiplier (currently 9X and decreasing by 1X every 10 days). The last free airdrops I received were UNI and HEX and both of those did rather well. There is no reason NOT to claim, do it NOW. If you want to claim and dump for HEX or USDC you can. One shark dumped like 150B HDRN and cashed out like 200K. Free money. do it. Even the OA has claimed and minted, and is currently a very very large HDRN holder and might dump it to obvlion, but hasn’t yet.

Here’s how much HDRN you can receive. If you have 1 tshare on a 5555 stake and you’ve served 1000 days of that 5555 stake, then the total amount you will ever get (with today’s multiplier of 9) would be: 1000 * 9 * 5555 = 50M HDRN. If you wait for 90 days, you’ll only get 1000 * 5555 = 5.5M. Today you would be able to mint 9M, and subsequently you could mint 9K every day up until day 5555. It’s a way to get paid every day for your tshares now (as opposed to at the end of your stake). Prior to HDRN you would get paid ~6 Hex/day (payable at end of stake), now you get paid ~6 HEX / day AND ~1000 (* multiplier) HDRN / day for each TShare that you own. That multiplier (9 today, was 10 prior) applies to your stake for the life of the stake…if you have a 5555 stake and HDRN does well you’ll kick yourself when you go to end your stake and you have 10% of the HDRN you could have had. So claim today. Do it, don’t think about it, just do it. It’s free money.

Outside of the airdrop, HDRN now introduces some new features that were not available to you before. If you don’t care for them then don’t use them. These introduce contract risk (what if there is a bug in the contract), just like being a liquidity provider does. If you are risk averse, you can ignore it and simply claim. The code is audited by Certik, it’s complete and has not admin keys, but there can always be bugs. Maybe you trust it today, maybe you wait until it’s been running for a year with no issues, regardless, you do now have some new cool things. This was released in the same spirit as HEX, a completed finished product with no admin keys. Pure DeFi.

HDRN now allows you to encapsulate stakes

If you choose to assign your HEX to the contract, you can now stake through the contract and this will be called a Hex Stake Instance (HSI). This is the contract risk, it legally now controls your stake. You can only assign HEX that you control, you can’t assign it your stake since those HEX are burned. Claiming/Minting has nothing to do with this, the claim/mint gets you free HDRN and doesn’t affect your stake. Creating an HSI now provides some new features on top of the Early End Stake (EES) feature that is native to HEX. The features available are now:

1. Early End Stake (EES). This is the native capability that you have in HEX. You will pay EES penalties based on how long you have remaining in your stake. If you perform an EES you’ll get some of your HEX and it comes back to your wallet.
2. Transfer. If you have an HSI you can mint an NFT which is like a bearer token to your stake. This can be referred to as an encapsulated stake or wrapped stake. Like a deed to a property, you can sell or transfer the deed. One simple use case here that applied to me was where I created a stake in native metamask and wanted to move it to my trezor but I couldn’t. Now I could! The next obvious use case is selling it, and you can now natively do this on OpenSea — some people are already doing this. (https://opensea.io/collection/hex-stake-instance). What’s cool about this feature is that you aren’t just selling the HEX stake, but also the HDRN (current and future) that is allocated to that stake. This allows a secondary market to form around a stake, where people can purchase and sell stakes instead of native HEX. A strategy could be to now stake out longer (e.g 5555days) knowing that if you are hard pressed and need to sell it there will be a market to do so where you are likely to get a better rate than EES/Dump. This will slightly impact Stakers (you don’t get the EES penalties), but is better for price performance (you no longer have the dump). It allows purchasers to perhaps get discounted HEX on the secondary market which equally may decrease buy pressure. The game theory has yet to play out but one this is for sure is that we can expect to see more 5555day stakes which means raw/native hex will become more rare. How the secondary market evolves is yet to be seen.
3. Borrow. You can borrow the future allotment of HDRN to this stake. You’ll need to pay it back with interest and keep up with monthly interest payments or face liquidation, but you can borrow it all. You create a 1TShare stake for 5555 and you can immediately borrow the 1000 * (multiplier) * 5555 HDRN and sell it on the market and buy a rolex or pay your bills or just buy USD expecting the value of HDRN to fall. Yes, this in fact introduces the ability to short HDRN. I do not ever recommend shorting crypto, but there are people who really really want to, and you can short HDRN natively with no counter-parties (outside of the contract) trustlessly. This will create some wild price swings when traders figure this out. The catch is that they need to create a big fat hex stake to borrow that HDRN. The longer they lock it, the more they can borrow. Borrowing at all serves as shorting HDRN so don’t do it unless you need it, no point paying interest on an asset that could go up dramatically. Imagine Paul wants to short HDRN. He purchases 1M in HEX, he stakes it for 5555 days, borrows the HDRN and dumps it on the market hoping to buy it back cheaper later and repay his loan. He could then plan to sell the stake on opensea making a handsome profit.

Hedron will make HEX more scarce.

As the value of HDRN appreciates it will turn into a proxy market for HEX. You buy HDRN to buy defaulted HSI stakes, you sell it for cash. Ideally you get to a world where you make enough on your HDRN that you can sell it and never ever need to sell your HEX. HDRN doing well, will decrease sell pressure on HEX. Ideally people buy HEX and never sell it — HDRN is the venue where that can happen…you sell your HDRN and never your HEX. This will make HEX more scarce and appreciate in value.

I understand the HEX maximalist who tries to push delayed gratification — but those same people recommend laddering your stakes so that you always have interest coming in. Now you do, you get HDRN, you always have incoming interest….but it’s a proxy, you never need to sell your HEX interest. So might as well just lock it the fuck up for 5555 and live off the HDRN. Let HEX be the gold, let it be the store of value that appreciates in value, and let HDRN be how you pay your bills without selling your most valuable asset.

Why buy HDRN? Because that’s how you buy defaulted HSIs. Who’s going to default on their HSIs? I surmise this will be mostly traders who want to short it and lose, but it could also be deadbeat borrowers. I’m also heavily buying HDRN today based on the assumption that many sharks will dump their bags day 1 because that’s what people do with free money. This will create an initial slump and I want to be the guy who buys the bottom. If we never reach these levels again I will happily say I bought very near the bottom (I missed the flash wick)

You’ll see some very interesting price movements on HDRN once you get your first defaulted HSI. Today the value of HDRN is purely market driven but once it is the sole asset you can use to pay for a hard asset (a HEX stake) we will see some interesting convergence to the value of that hex stake.

Hexicans should embrace HDRN — it’s good for HEX, it’s not a threat, it will make HEX more scarce and appreciate in value.