If you are a HEX staker, make sure you mint your free Hedron tokens. It’s free money for the staker class, but also much more than that.
Hedron is a no-admin key contract built on top of the HEX contract that brings two new functionalities:
- HEX bonds
- HEX Stake Instance (HSI) collateralized loans
HEX bonds are based on HEX Stake Instance (HSI) tokenisation. When HEX is staked trough the Hedron contract it forms an HSI and this can be encapsulated into an ERC-721 token. These NFT tokens can be traded as bonds on any NFT marketplace. This is an important breakthrough that uses the decentral banking feature of HEX at its core.
Bonds are much more popular in the legacy market than certificates of deposit are, and if this translates to crypto industry, the demand for HEX will increase as it is needed to create a bond. This would increase the price appreciation of HEX but would also somewhat decrease the APY due to increase in staked HEX and increase in average staking length (both resulting in increase of total shares and their slowed down deflation).
HSI collateralized loans
HSI stakes can be used as a collateral for borrowing HDRN tokens. The entire amount of tokens mintable till stake maturation can be borrowed in advance. These loans can be repaid all at once, while the minimal obligation is to pay repayment installments every 30 days. These installments are equivalent to the HDRN tokens you could mint in those 30 days and can be continuously repaid for the duration of the stake. However, if more than 90 days pass from the last payment (60 days of delay), the collateralized stake is available for liquidation on a smart contract regulated auction. Whoever bids more HDRN tokens for the stake, wins the auction. The HDRN tokens used for loan repayment, or to win the auction, are burnt by the contract thus deflating the supply.
Currently, the market value of HDRN tokens is still too low to make this functionality attractive. But at 50-100x from here it may become quite attractive (for example, when 500 HDRN > 1 HEX). However, it is important to understand that the loan and installments all use HDRN tokens as currency, thus involve serious volatility risks. For this reason, some may be tempted to use HDRN loans as a method of shorting HDRN, thus providing a base demand for the tokens when the price of HDRN is in a downtrend. There are also several other game theory elements in play that can arbitrage between HEX, HSI staking and HDRN values.
As a HEX staker, you are entitled to mint or claim HDRN tokens for each stake you have. A stake can mint tokens according to the following equation:
Amount of HDRN Minted = (HEX Stake B-Shares) * ((Days Served) – (Days Already Minted)) * (1 + Launch Phase Bonus)
For example, if you have a stake with 1000 B-Shares (1 T-Share) that already served 100 days, you can mint 1000 * 100 * 7 = 700,000 HDRN tokens (Launch bonus was 6x on the day of writing this). And if the stake will continue for further 100 days you will be able to mint 1.4 million HDRN tokens overall as the launch bonus is claimed also for the future days with minting (or if this was a 5555 day stake, you could mint almost 39 million HDRN overall).
Claiming does the same, except it doesn’t immediately mint tokens. It equally secures the bonus for the future days. In addition, claiming secures any eventual Advance to Mint Ratio (AMR) bonuses that may occur in the future. Therefore, if you don’t need HDRN tokens until the stake matures, you may as well use the Claim function even though there is no guarantee that AMR bonus will ever occur (it only occurs when HDRN deflationary pressure is too high). You can later use Mint at any point.
Any HDRN tokens you hold and any launch phase bonuses that you secured will also be forked onto the Pulsechain network.
Make sure you Mint or Claim as soon as possible, as the launch phase bonus decreases every 10 days.
Consider biding low on gas price as there is no transaction approval urgency other than the above mentioned bonus decreases. You can always speed up the transaction later if it turns out you set the gas price bid too low. To prevent out of gas errors while waiting for a Mint transaction, you can increase the gas limit to 135k gas. This way you spend as little as possible for the Ethereum network fees.
What to do with HDRN?
You may be wondering what to do with HDRN tokens. Should you sell it or hodl it? Should you buy it or swap it to HEX?
Nobody knows what the best strategy for an individual is, but we know what the best strategy for the community is. It would be best to reduce ask liquidity for HDRN during the adoption phase by not selling it at these low prices. This way speculative demand can drive the market value to levels where its use case becomes attractive and kickstarts its fundamental value. At that point you have your free money being worth perhaps 50-100x more and sufficient bid liquidity to slowly sell if you so wish. In addition, you have a large enough supply of HDRN to buy any defaulted HSI on the liquidation auctions.
Does it make sense buying HDRN now? As explained above, its future value is extremely dependent on current speculative value. Such situations are not particularly good for large investments, being more of a gambling than investment. For this reason, it is certainly not safe to buy HDRN with HEX, as HEX stakes themselves allow HDRN minting. If anything, only use money for risk-on investments and consider the possibility of losing value.
There is a smarter risk-off alternative to get HDRN tokens. HEX and HSI stakes created during the 100 day launch phase can mint bonus HDRN tokens for its entire duration with the launch phase bonus (up to 5555 days max). This means that long stakes created during the Hedron launch phase are an amazing source of free HDRN tokens. Keep in mind that when creating a HEX stake you will also need to use the Claim or Mint Hedron contract function to claim the launch bonus for all its future days. If you create a HSI stake, you don’t need to run any additional transactions to claim the bonus, and you are also given the option to tokenise the stake in future.
Please read the Hedron whitepaper for details and do further research.
Official Hedron website and dapp: Hedron.pro
Hedron Telegram group (block&report any direct messages!): t.me/HedronCrypto
Community built HEX and HSI stakes management tool: HSIwatch.com
Stakehex.today is now also compatible in displaying HSI stakes.
Disclaimer: None of the above is meant to be a financial advice. Never rely on a single source of information and do your own research before any investment. Don’t trust, verify!
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