HEX, The OA, and BPD

For any new HEXican — you might be wondering what BPD is/was, you might wonder what the OA is / was. For those who’ve been around for the first year are all too familiar with it. Net net, I still field questions from people on what happened on BPD and so I wanted to write about it….so that I can just point people here instead of rewriting the same thing over and over…

First off let’s define some terms for those who are new to HEX.

OA: Origin Address

This is/was an ETH address that received (s) a duplicate of all rewards during year 1. It also receives half of early endstake penalties(ongoing). It controls a HUGE amount of HEX and haters still point to OA as why they think the token is scammy. What is the OA? It’s the biggest HEX whale, and you can assume it will not do anything that benefits you in any way shape or form….because HEX is not a security and we don’t do expectations from the work of others here. You are the network, you mint your own rewards. Hexicans understand this.

BPD: Big Pay Day

During the first year (launch phase), you could get HEX for free by free claiming if you held Bitcoin on snapshot day. Each day that free claimers didn’t claim their coins, a portion of their claim would be lost and fed to the AA (Adoption Amplifier). A copy of the deducted coins went to AA, a copy went to OA, and a copy went to a shared pool that was paid out to stakers at the 11month mark called the big pay day (BPD).

The BPD was a bit of a black swan event for HEX- 11 month leadup to a big airdrop. Haters were convinced that HEX would die after the BPD but it didn’t. It recovered…and it did so very fast.

AA: Adoption Amplifier

I mentioned above that a copy of the coins deducted from bitcoin freeclaimers was paid to the AA. This provided a mechanism to onboard new users without having to go beg binance to list HEX. It may not have been as necessary had Uniswap already been a big deal — but at the time we needed a decentralized way to onboard new users and it provided a lot of HEX liquidity for the first year so that anyone could onboard.

Early on (first month) I myself was sceptical of the AA. Given the project already had the OA which was a massive whale, now there was another address that was also paid huge in ETH….so I didn’t like it — plus it was huge inflation. I hadn’t thought of the lack of onboarding tools, naturally I just assumed a CEX listing would arrive. So I was wrong in my assessment of its necessity. There’s also a huge pumpamental to the AA: If the same entity controlled both the OA and the ETH coming into AA — then there are literally over a billion reasons not to sell OA controlled HEX.

Founders rewards in other projects typically lead to forever sell pressure (look at XRP) — whereas there is ZERO incentive for the OA to sell a single HEX. Beautiful. I didn’t see that angle early on, I was wrong, and it worked to benefit HEXicans.

If you weren’t a HEXican yet on the Big Pay Day it was a site to behold. Our market cap literally dropped from like 4Billion to 30Million in a day. My numbers might be off but you get the point — we watched as all liquid HEX staked for big pay day and the %staked went from 10% up to 99%…it was crazy and if you weren’t a true HEXican it likely scared you. I received phone call after phone call from worried new HEXicans wondering WTF was going on. It was so fast it doesn’t properly show up on charts…With 50M TShares newly minted I plummeted in my staker league status. (btw recent debate with scammer Alex Saunders showed his fundamental misunderstanding of how market cap is calculated when he pointed to BPD….he didn’t understand market cap plummeted because of a mass stake event).

If you were like me, you were excited about watching the BPD estimates you’d see on go.hex.com — then cried when you saw your estimated return go from 3X, to 2X, to 50%, to 30% (depending on stake length).

Now if you were planning (many were) on dumping after receiving a big windfall then you were sorely surprised to see your stack drastically impacted by the OA staking. Some are still salty about this (goodtexture), some left — but most have moved on and remember it with a bit of ‘meh’ given the price performance and continued consistent interest paid to their stakes. I for one have moved on, I’ve gained a lot of interest SINCE BPD and feel better about HEX knowing that is behind us. HEX is awesome because it pays you interest every day, not just one lumpsum on one magical day.

So what did the OA do and why?

As mentioned above you can not expect the OA to do anything for you, no expectation of profit. The best you can do as a trader or investor, is to assume that the OA will act in its own best interest. The same way I act in my own self interest, and to be quite honest you do to. That’s good. That’s a healthy market. The interests of the OA is to accrue value to itself, which means to increase its USD value over time, increase its ETH value over time, increase its BTC value over time. The incentives for a whale are different than the incentives for a shrimp. When Elon Musk sells even a single share he’s going to hurt the stock price and his overall wealth goes down. Imagine selling 50Million USD and losing 1B in net worth — those are the rules for Elon, those are the rules for whales in any investment. The rules for a whale are just different because the market watches your every move.

The OA decided not to stake outside of BPD.

• OA not staking increases the market cap of HEX. While market cap is a vanity metric, it does matter for bragging rights and people do care about it. The number of people who look at Bitcoin first, then go down the line is astounding (let’s buy a bit of BTC, a bit of ETH, a bit of LINK, BNB, ADA). So it’s good optics to have a high market cap, it’s marketing, and one day when we flipn BTC that will be mega bragging rights.
• OA not staking increases the interest rate to stakers. Higher interest rates increases number of stakes, and stake lengths. Not many would jump up and down over a 5% interest rate, but 17%? 30%? 50%? OMG give me some of that!!. In a technical sense this is like robbing the OA (through inflation) and paying it to stakers to incentivise longer stakes.

The OA decided to stake 100% for BPD

• The OA staked everything causing huge amount of TShares, diluting all stakers of their BPD payout and affecting daily payouts. For a few days the HEX daily payout was low (as low as 1.001 HEX/TShare on day 353).
• Actors/traders planning to dump the day after BPD had less HEX to dump on the open market. This includes other whales who keep their HEX liquid.
• The OA single day (and multi day stakes) decreased the BPD hangover depth and duration.

The OA decided not to stake after the BPD.

• All of the above benefits (market cap, interest rates, …) apply once again.

Here’s another thing not always considered: The monotonically increasing TShare price. It gets more and more expensive (in hex terms) every single day to purchase a TShare. The TShare price (in HEX terms) jumped considerably right after BPD. Had the OA not mega staked, the BPD would have caused mega outsized returns, causing a much larger ratcheting up of TShare price. Today it would cost 2X? more per TShare making it harder for new HEXicans to make good interest….you’d have genesis shares yielding insane returns, and new HEXicans never getting a chance to make bank. The single day OA staking protected the share price for newcomers. The reality is that the only losers to this act were short term stakers who were hoping to dump anyway — screw them.

Like many, at the time I wasn’t a fan of the OA move to stake everything. I was chopping at the bit and salivating over my upcoming BPD payout. I knew it would happen but secretly didn’t want it to. I was secretly counting the “BPD payout” into my HEX balance and therefore calculated myself to be richer than I was. I knew it would happen but was too greedy and so allowed myself to be deluded into thinking it might not happen.

The OA acted in its own best interest — and in doing so helped the price — and in doing so did the best thing for my interests.

It’s elegant and kind of beautiful.