Cryptocurrencies are a weird thing. They are the fastest appreciating asset class, but nobody can honestly explain why is this so without resorting to narratives and speculative ideation. Their value creation is rarely connected with their use case, or with the proposed future use case. Many are incomplete projects that are far from ready for wide adoption and technologically not yet suitable for scaling up. Most are just tokens selling for promises of future work, or plain vaporware like most ICOs.
It is thus not surprising that the most fashionable methods for generating gains varied wildly over time. People adapt and follow the herd. The initial use case of digital peer-to-peer cash of 2009 was enticing enough for people of certain ideological orientation to accumulate Bitcoin as the first cryptocurrency. This was an important event, as it sparked the initial value creation.
Once it become clear that the current blockchain technology doesn’t allow the scaling required for a digital cash use case, the “digital gold” or “store of value” (SoV) narrative that incentivised hodling slowly came into existence. This narrative proved to be the most relevant factor for price appreciation. This way the SoV narrative become a self-fulfilling prophecy. People become confident it would last forever and begun hodling as the best method for generating gains, yet not considering the fact that none of the coins on the market had enough game theory fundamentals for backing the SoV narrative.
Then in 2017, the ICO craze begun. Since it was based solely on selling of promises to generate expectations, it was obvious from the get go that it would degenerate in the pump&dump method for generating gains. People would donate billions of dollars to ICOs for the sole purpose of getting early in the pump so they could get massive returns by dumping on time. This resulted in the now famous shitcoin price charts typical of hundreds of tokens, now mostly dead or dying. Some projects surprised with actual product development, but in numbers these represent an insignificant minority.
Once the shitcoin pump&dumps mostly went out of fashion, making gains by trading become popular. Trading is just as much a losing game for >90% of traders, even more so in crypto where the market is saturated with individuals unskilled to understand patterns of price movement. Trading in the bear market since early 2018 is even more so a losing game. A huge number of people still continues to get rekt by using the highly risky margin trading, much to the pleasure of centralised exchanges.
Margin or leverage trading made the degenerate gambling model the new norm. Therefore, with smart contracts and DAPPs came the gambling games. The gamification of Ponzi schemes, and various other redistribution games, become the next hype that made some more wealthy, but the majority even more rekt.
After the rekt participants got washed out, a new narrative to attract fresh participants was found. Now everyone is talking about Decentralized Finance (DeFi) that would substitute financial services in a decentralized ecosystem. Yet, the wast majority of so called DeFi is not truly decentralized, nor permissionless and trustless. Most of DeFi projects are run by companies using smart contracts with admin keys, and often require registration (KYC) and custody of funds.
The newest hype for generating gains is staking. HEX may have been the spark that caused the renewal of interest in staking, as it is the first trustless interest bearing crypto asset, a blockchain certificate of deposit. Yet, it is also the most gate-kept, fudded and censored product in crypto. This gave the opportunity for the competing projects to jump in with their alternative staking models, which are either variation of the classical Proof of Stake model, but executed trough intermediaries, or various other custody based staking models. None of the competing projects has the incentive to develop a truly decentralised staking protocol with trustless interest and behavioural moderation trough game theory elements. Apparently, everyone in crypto got comfortable with centralisation being the new norm in crypto, except for us marginalised Hexicans.
HEX adopted all the good practices as learned from all of the above described historical hypes and discarded all the degenerate gambling aspects. Moreover, it strayed the trend back to what blockchain technology was invented for, and what it is good at: decentralisation, censorship resistance, trustless execution, on-chain transactions, and no custody. It rewards users who play by the rules benefiting value creation, so that life destroying trading and gambling can never be as beneficial as hodling or staking. To some degree, it also punishes bad behaviour that destroys value.
If you are tired of making gains by trying to get the next person loose their money, consider the Hexican method of earning by creating new value. Learn how to delay gratification instead of succumbing to the greed of fast money at a high social cost.
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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