Instead of a more technical blog, I thought we’d change things up a bit and have a little fun. Today, we will be looking at how Hedron and Icosa could theoretically 10,000x your money. This is just for fun and is only supposed to provide a bit of entertainment during the bear market. Let’s get it!
Icosa & Hedron are two tokens built on top of Hex that have been gaining wider publicity within the Hex community and have spurred many debates over their long-term value in both real world dollars and to the Hex system itself. While there are many ways in which the success of these additional smart contracts can ultimately land you a nice hefty return on investment, the first big question about both Hedron and Icosa is this: how many X’s in price can these tokens do?
1) Price Potential
At first glance you might think that Hedron and Icosa are built on top of a token that has already done a 10,000x, HEX. This should make it a winning ticket, shouldn’t it? It’s not quite that simple unfortunately.
Hedron, is a token that you can mint for every day you are staked, with longer stakes allowing for more Hedron to be minted per Hex staked. Instead of waiting to the very end to mint all of the Hedron available from the stake, Users could use their Hex stake as collateral and advance all of the mint-able Hedron up front. The only catch is repayments with interest must be repaid every 30 days and after 90 days of non payment, the Hex stake goes up for auction
Now while it hasn’t made financial sense yet to risk losing your Hex stake in the case of non-repayment, there could come a time where advancing your Hedron and swapping for Hex could get you more Hex than you originally staked. How is this possible? Let’s understand what the “Ceiling” price is.
This ‘ceiling’ price is specific to the price of Hedron and the cost to make a max length single T-Share stake. It is called the ceiling, because if Hedron goes over this price threshold, the value of the total Hedron that a stake could advance would be higher than the cost of the Hex stake itself. This crossing over the threshold would give the opportunity for users to advance Hedron, buy more Hex than they originally staked, stake, and repeat over and over. What happens during this event to both the Hedron and Hex price though?
When this event occurs, users are selling Hedron to buy Hex. Selling one asset to buy another, means that the price of the sold asset will decrease, and the price of the purchased asset will increase. To be clear, every time this event takes place, the price of Hedron will be pulled back down and the price of Hex will be pulled up, hence the term ‘ceiling’. While Hedron could theoretically run higher on its own in price, it will always be pulled back down because of this event, making large runs in price quite unlikely on its own. However, if the price of Hex starts to take off, this ‘ceiling’ price for Hedron will raise at a rapid rate and give even more headroom before Hedron could run into this ceiling again.
So, while Hedron can move in price very quickly and has lots of potential, its ability to run in price is directly correlated to the price of Hex & the Hex T-Share rate. If you believe Hex can do another 10,000x, then Hedron has the headroom to do so as well and more.
Icosa works in a similar fashion to Hedron regarding the ceiling price that it has in relation to Hex. What separates Icosa from Hedron is how Icosa is minted by users. To mint Icosa, a user must permanently sell their Hex Stake Instance (HSI) to the Icosa smart contract. This gives Icosa a value that is tied to the value of the Hex stake that was sold to acquire it and will more than likely prevent dramatic moves in the price of Icosa relative to the Hex price.
Its price is based on 3 factors: the price of Hex, the Hex T-Share rate, and a declining amount of Icosa that is mint-able for the same number of T-shares over
time. What this implies is that the ceiling price of Icosa should move at a faster rate than Hedron’s ceiling price, however it will still have the same event occur as Hedron if the price of Icosa ever exceeds the ceiling price, which will keep Icosa from running up in price on its own.
If the price of Icosa goes above the threshold, users will be able to sell an HSI to mint Icosa, sell the Icosa for Hex to gain more Hex than they originally had, and repeat the process until the ceiling price has been found. So while there is clearly a cap on the speed at which Icosa’s price can move, if you believe that Hex can do another 10,000x in its future, then Icosa will have the possibility to do more.
The catch to both Hedron and Icosa in terms of capturing price performance, is that they are riskier than Hex. Both are reliant on the market valuing the assets at its intended value and the price of Hex going up long term.
2) Staking Yield
Credit to @Dev_Huey on twitter for the above Image and data
On November 13th at 00:00 UTC time, a massive event will be taking place which will provide an abnormal amount of yield to both Hedron stakers and Icosa Stakers. This mass event will take place over the course of 90 days, with the brunt of the event happening on day 1. To understand this, let’s take a quick look at what caused this event.
When a user sells an HSI to the Icosa smart contract to mint Icosa tokens, that HSI is guaranteed to end up in an auction where users can bid on the stakes with their Hedron Tokens. This is guaranteed, because the Hedron that can be advanced against the HSI is advanced by the smart contract and sent to the Icosa stakers as yield. 90 days from then, the HSI will go up for auction due to non-repayment. The minimum amount of Hedron that will be burned due to the 6600+ Hex Stakes that are up for grabs are going to cause a large spike in yield for users staked in either the Icosa or Hedron pool.
While we know the minimum amount of Hedron burned if all HSI’s are bid on will be over 380 Billion, we do not know what the actual amount of Hedron burnt will be. This number could be quite substantial and push the yield numbers insanely high for stakers in the Hedron and Icosa pools. There is no guarantees of this though, and it is important to remember that even the minimum amount of Hedron to be burned may not actually even happen if the demand for these HSIs is lower than expected.
3) HSI auction deals
Like we talked about in the last section, there is a mass number of auctions up for grabs starting on November 13th which you and I could bid on and potentially get a deal on cheap Hex stakes. There are two main ways to make the most of the auctions, however both require the bidder to win the auction for less Hedron in dollar value than the Hex stake is worth to create. If you can find a Hex Stake Instance that has a very low bid in Hedron tokens, you’ve got yourself a potential deal. Now, you must make one of two decisions: Either see the Hex stake through to the end or take the HSI you’ve won and use it to mint Icosa.
Both paths can be equally as lucrative, however long term it is impossible to say which path is the right one. By minting Icosa, you are forfeiting the hex stake again for a slightly riskier but higher upside potential including the ability to stake that Icosa to earn yield. If you decide to hold the HSI, then you will be able to benefit from the potential price appreciation, the yield the stake earned as well as the mint able Hedron from the stake. It’s impossible to say which is the better route that could get you closer to a 10,000x, but either route is a great one!
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