What Is HEX: Crypto Scam or Great Investment?

HEX is a cryptocurrency project that markets itself as a crypto investment bank. Its founder and CEO, Richard Heart, claims that the crypto coin, HEX, is a far superior store of value than Bitcoin and guarantees Hodlers rewards for holding the coin. This ambitious statement by its founder has also turned it into a subject of controversy, with many skeptics decrying it as a Ponzi scheme.

Yet, HEX indeed has incredibly enticing rewards, so any investor would definitely be curious to find out if it is a legitimate investment or a scam. Read on as we dissect the facts for you.

What Is HEX?

Created in 2019 by Richard Heart, HEX is the first high-interest blockchain certificate of deposit, essentially the crypto version of a bank fixed deposit. HEX users can stake HEX tokens for a share of the new HEX coin issuance which comes from its annual inflation. During its launch in 2019, HEX airdropped free HEX coins to Bitcoin holders who could then claim HEX through the MetaMask wallet.

HEX uses the Ethereum blockchain as a transaction layer for sending and receiving HEX tokens and interacting with the HEX smart contract, with its consensus code and staking mechanism contained within the HEX smart contract itself. HEX claims that this blockchain architecture allows it to be a more efficient and user-friendly version of Bitcoin.

Source: Hex.com

How HEX Works

HEX is a new type of cryptocurrency that utilizes its Proof of Wait (PoWa) protocol, which allows HEX holders to earn interest on their investments by staking their tokens in the HEX smart contract. Though HEX is an ERC-20 token, it’s referred to as a coin on the company’s website. As an ERC-20 token, HEX can be stored in any Ethereum-compatible wallet such as MetaMask.

To receive interest payments, HEX holders must wait a certain amount of time before they can unstake their tokens and withdraw them from the smart contract.

The interest payments are made in HEX coins, which come from an annual inflation of 3.69% that’s applied to all existing HEX coins. Inflation only occurs when a HEX coin is minted, and HEX is only minted when the staking period ends — which leads to delayed inflation. When 100% of HEX coins are staked, HEX stakers will earn 3.69%. According to its website, currently, only 10% are staked. Hence, HEX stakers get to earn around 40% APY.

The amount of HEX a holder can earn depends on how much they stake, as well as the length of the staking period. The more you stake, the more you earn; and the longer you stake, the more HEX you'll earn as well. The staking period is flexible, from 1 day up to 15 years.

Source: Hex.com

Even if you choose to stake for 15 years, you can divide your staking periods via the Hex Stake Ladder, which enables you to cash out your mature stakes regularly. When you reinvest the principal interest after cashing out your stakes, you’ll be able to continuously grow your passive income. However, early and late “unstakers” are charged penalties.

Besides earning from HEX coin issuance, stakers can also earn shares whenever they start a new stake. Shares allow stakers to earn back their principal interest, plus additional bonuses and interest. Every share is burned once a stake has ended, which means the share pool is constantly dwindling. Hence, HEX recommends staking early and long to earn high ROI.

Source: Hex.com

Apart from staking, HEX also offers a referral program that incentivizes users to earn commissions for referring new investors to the HEX platform.

HEX Crypto Price Prediction

HEX has a self-reported market cap of $18.9 billion. However, the CoinMarketCap team has verified HEX’s market cap to be closer to $5.79 billion. HEX is currently priced at $0.0334 (as of November 13, 2022), which is a >25,000% increase from when it first started trading in December 2019, at $0.00013.

Source: CoinGecko.com

DigitalCoinPrice predicts HEX will cross the 1-cent mark in less than 2 years, reaching around $0.15 in 2024, and growing to $0.60 by 2030. PricePrediction has an equally bullish outlook on the token, expecting a price appreciation of up to $1 by the end of 2030.

WalletInvestor’s crystal ball, however, is not as upbeat about the future of HEX, and believes that the token is overvalued and will eventually crash.

Is HEX Crypto a Good Investment or a Scam?

Given the hype around HEX, many people wonder if it's a good investment or a scam. In fact, its official site even has a page dedicated to why it isn't a scam. That claim alone, of course, should certainly not be your basis for confirming whether or not it’s a legitimate venture.

Source: Hex.com

There are several points to consider when deciding whether or not HEX is a good investment.

Why HEX Could be a Good Investment

Here are a few reasons why HEX could be considered a good investment:

• HEX is currently priced at fractions of a cent, with high ROI in its staking yields. If it is a truly legitimate project, its price can be expected to increase with demand, due to its attractive yields.
• HEX has undergone external security and economic audits from ChainSecurity and CoinFabrik, in which no bugs were found in its system

Potential Red Flags of HEX

While there are some compelling arguments that HEX is a good investment, there are also some arguments to be made that it's a scam:

• The HEX founder, Richard Heart, whose real name is Richard James Schueler, has allegedly participated in sending spam back in 2002. This fact alone has made many wary of the HEX project.
• Richard Heart himself has admitted that the project uses “tactics that a scam might use,” which includes referral bonuses and get-rich-quick schemes, but goes on to insist that it is an honest and real project.
• HEX has no use case — meaning it's not possible to use HEX coins for anything other than pure speculation. In fact, the only purpose of HEX is for price gains, rather than providing blockchain services for the community. Nowadays, even meme coins like Shiba Inu and Floki Inu are working toward giving their tokens utility to emphasize the integrity of their projects.

• HEX’s staking mechanism reads like a Ponzi scheme, in which investors are reluctant to cash out due to promises of long-term high yields alongside penalties for early withdrawals.

Where to Buy HEX

HEX can only be bought on decentralized exchanges (DEXs) like Uniswap and 1Inch. Here are some things to keep in mind when buying HEX on decentralized exchanges:

• DEXs are less user-friendly than centralized exchanges. That means there's a learning curve, and it may take some time to get used to the interface.
• They're also more volatile than centralized exchanges. Thus, prices can fluctuate more, so it's important to pay attention to the cryptocurrency market today.
• They don't offer customer support as centralized exchanges do. If you run into any problems, you'll need to solve them yourself, or find help from the community.

Despite these drawbacks, DEXs are the only way to buy HEX coins at the moment.

Conclusion

HEX aims to revolutionize the DeFi space by being the very first certificate of deposit to promise high guaranteed yields for its investors. At first glance, it may look like a great investment opportunity. However, all that glitters is not gold. Several red flags point to HEX being a possible scam. Even if it may not be, typically, projects like HEX that promise high returns also carry equally high risks.

With that in mind, always do your own research before investing, and if you decide to invest in HEX, start with small amounts, as recommended with any new investment.