Hedron the Sleeping Giant | Part 4 – Summary and My Thoughts
Updated: Nov 4, 2022
Welcome back to part 4 of this series where we have been breaking down the upcoming Hedron staking platform called Icosa. In this blog we will be summing up everything we have covered in a very technical matter, into an easy to grasp overview of the new platform. To make the most of the platform when it releases, I recommend you read this blog and understand it as well as you can. Once you are confident in your understanding here, read parts 1-3 over again to really grasp the full game theory possibilities of the system.
I will do my best to consolidate all the info we previously covered, however the system is very complex, so there may still be some slightly technical explanations. Let’s get started.
So, it all starts with Hedron. Hedron is built on top of Hex and is available to be minted by hex stakers for “Free” minus gas fees. For every T-share you have staked, you will get 1000 Hedron for every day of the stake’s life. Hedron is actual paid based off B-shares, and mints one Hedron per every B share, however if this is not quite clicking, just remember one T share gets you 1000 Hedron. To be completely clear here, a 1.5 T-share stake gets you 1500 Hedron per day and a 2 T-share stake gets you 2000 Hedron per day, and so on. Hopefully that is clear as mud now.
Hedron will always be able to be minted based off this ratio, however because the amount of Hex it takes to stake and get a T-share is always going up, it will get harder and harder to mint Hedron over time. This means that the rate we see Hedron coming into existence now, will likely be the highest we ever see it. At some point it is likely that Hedron reaches a price where Hedron can help the price of Hex to increase. To understand this, we must remember what a Hex Staking Instance or HSI is and what it allows a user to do.
HSI's - Hex Staking Instance
An HSI is created by staking your Hex through Hedron.pro and allows a user to borrow the entire possible amount of Hedron from a stake in advance. There will be repayments every 30 days and a small repayment fee each payment. An HSI also allows users to tokenize their stake – This means if you want to move your stake to a different wallet or even sell the stake, you now can.
Back to the borrowing concept though. If Hedron reaches a certain point in price, it may be possible that the amount of Hedron borrowed from a stake is worth more than the stake itself. This would create a cycle where a user would sell the Hedron for more Hex, stake it as an HSI, advance the Hedron and continue this cycle to make a profit. If this point occurs, the event will always pull up the price of Hex. Pretty damn cool if you ask me!
A final note on HSI’s, is that if an HSI is borrowed against and not repaid, it goes up for liquidation after 90 days and can be bought by anyone using Hedron tokens. All the Hedron used in these auctions is burnt from supply forever.
So, we’ve summed up Hedron and HSI’s, now let’s move on to the upcoming Icosa staking platform to talk about staking Hedron.
Staking Hedron
Once the platform releases, Hedron holders can stake their tokens in protocol to earn the new token, ICSA. Users will have at least a minimum of 30-day stakes and a maximum length of 360 days based on how much of the total supply of Hedron they have staked. For a more in-depth explanation of this and the included bonuses for each tier of stakers, see part 2 in this series.
There are a couple unique functions of this pool which are very unlike hex in addition to the aforementioned. If a user ends their stake early, let’s say at the 60% mark through the stake, the user will only receive back 60% of their principal and 60% of their ICSA yield. This applies to a stake anywhere from 1-99% served. Additionally, users can add to their stakes at any time to increase the principal of their stake. The trade-off is that the amount of time they must serve as a minimum is reset whenever users add to their stake.
If a user decides to end stake early, the Hedron that is taken in the form of penalties is divided into two parts. 50% of the Hedron is burned from supply, while the other 50% is sent to the ICSA staking pool.
If you want to understand the math behind how the ICSA Yield is calculated, see part 2 of this series. I am trying to keep things very general here in this summary.
Before we talk about the Icosa staking pool, let’s go over how you can get Icosa without staking.
Obtaining Icosa
Icosa can be purchased from the Icosa smart contract by selling an HSI to it. If Icosa was live today, 1 T-share is equal to around 24 ICSA in purchase value. The contract then borrows all the Hedron from the HSI it was sent to put it into liquidation after 90 days. The Hedron borrowed from these HSI’s is the Hedron that is mainly sent to the ICSA pool as yield. There will likely be a point where ICSA is available on the open market, however if you are looking to participate in the early days of the staking pools, you will need to sell the contract an HSI to obtain ICSA so you can stake it in the ICSA staking pool.
Like the buy & sell cycle we spoke of with Hedron and Hex Staking instances, will likely be a time when a similar cycle can happen with HSI’s and ICSA. Essentially, when the price is above a certain point for ICSA, an HSI will create more Value in ICSA minted than the HSI is worth. We get the exact some opportunity here to sell ICSA for more Hex than we previously had to buy more ICSA with that HSI, and the cycle would continue until there was no more price difference. This would pull the price of Hex up every time it happened and actual support Hedron’s price as a by-product. All auctions that are purchased with Hedron, burn that Hedron out of supply. It’s a mega positive feedback loop!
Once you have an amount of ICSA that you wish to stake, you can stake and earn both the ICSA token and the Hedron token. All minimums, bonuses and early end stake penalties are the exact same as the Hedron staking pool, however the ICSA is distribute evenly to the three pools when collected from penalties.
We Are All the Source Address Pool
The final feature of the platform is the We Are All the Source Address pool. This pool will have a 14-day window which is kind of like a sacrifice, because you send funds to the contract in exchange for points, but the difference is you do not wait for any period before receiving the NFT you get from sending funds. The points you get are tied to the NFT and represent your percentage of the pool that you get in daily ICSA yield. If you want to claim your yield however, you must burn your NFT, lose access to the pool, and increase everyone else’s share of the pool; this ultimately means more yield per day for everyone still in the pool. It’s a giant game of chicken essentially!
Conclusion and final thoughts
So, all in all after completing this entire series, doing all the research involved and wrapping my head around the immense amount of game theory we are going to be faced with, I am incredibly excited for this to launch. I believe Hedron will have an incredibly positive effect on Hex long term and bring even more value to owning Hex.
One thing we do need to talk about is the validity of the code and whether there are risks. If we use or historical data, Hedron’s code has been flawless. This sets a precedent for what we can expect for the quality of the coding done within the ICOSA platform.
Of course, it is new code and a more complex platform, so there is a chance that something could arise from the new code. However, the Icosa platform will be released on testnet with the goal of finding any bugs that may exist in the code. Users can receive a “Bug Bounty” Reward for finding these bugs during the testnet phase – if there are any. So not only is the founder flawless in his previous coding, but he is deploying a test version of the platform and all its capabilities to be put to the test before going public.
I am not here to tell you what you should or should not do regarding the upcoming release. I am simply here to provide you the information to make an informed decision for yourself. This is not financial advice, nor should it be the end of your personal research journey for this platform. More research is almost always required before being able to understand exactly why or why not to invest in something.
Finally, I would like to give a massive shoutout again to the ICOSA Telegram chat including the Founder Alex, Cryptosloth, Bloo, Enigma, Nomad, Gifford, and many, many others who helped verify the info needed for this series. I could not have done it without you.
- CRYPTOGRFX
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