Is ICOSA Yield coming in WAVES? + HSI Auction Q&A

On November 13th, 6000+ Hex Staking Instances (HSI’s) will go up for auction over the course of the next 90 days. Nearly 3000 of them will be up for grabs in the first day, and the following days will have far fewer HSI’s per day. Why is this significant? Because during this period, Hedron will have to be burned for these HSI’s to be purchased, and because the current price of Hedron is low compared to its ‘ceiling’ price, all the HSI’s could be scooped up for a potential deal.

You can think of this ceiling price for Hedron as around the price where the minimum bid for one of these auctions is equal to the base cost of the HSI associated with whatever the minimum bid is. Because Hedron is more than 15 times undervalued from that point currently, it is likely that far more than the minimum bid is burnt during these auctions.

When Hedron is burned, yield is created in the form of Icosa tokens for all Icosa and Hedron stakers and additionally WAATSA NFT holders. The more Hedron is burned, the more yield will be sent to the pools. Let’s look at what might happen in regards to the timing auctions for this event and in the future. On November 13th, the auctions can be bid on and won after 24 hours. When a bidder wins an auction, they can make one of the following decisions:

- Recycle the HSI into the HSI Buyback function to mint Icosa

- Hold the HSI or make various moves with it

If a bidder decides to recycle the HSI they won to mint more Icosa, this means that 90 days from then there would be another auction for the same HSI. If more than one HSI is recycled or many HSI’s are recycled, then we could see another wave of auctions happening 90 days after the first mass auction event. But what happens if people start minting Icosa just before the November 13th Auctions?

If users start minting Icosa during the few days leading up to the auctions, this will send the HSI’s used to mint Icosa up for auctions 90 days from then. This creates an interesting effect where instead of waves of HSI auctions starting every 90 days, we could see the distance between these mass auction events shrink. If users start to mint Icosa 5 days before the auctions, this would mean that the second wave of auctions after the first 90 days would now begin 85 days after the last mass auctions started. We’ll call this theoretical effect, the Auction FOMO effect, for the rest of the video. The Auction FOMO Effect creates an interesting effect where the auctions begin sooner and sooner from the last auctions, while simultaneously seeing auctions after the normal 90-day mark. So instead of having cycles every 90 days, we could see the second auction event being 85 days out, then 80, then 75, and so on. What it is, is an assumption that as users see how much yield is sent to the Icosa and Hedron pools because of these auctions, more users will try to get in just before the next big wave is expected to come up for grabs.

This will likely have a tapering effect over the course of 4 cycles or 360 days, however anything could happen. Currently there are 2566 holders according to Etherscan.io, which is around 90% less than even Hedron and less than 1% of the current Hex holders. This points to the potential for growth within the holders of Icosa, which could start from seeing the effect of the HSI buy back auctions. So, lets look at one strategy for making the most of these auctions and weigh out the cost vs benefits to being ready to capitalize on future auctions due to these waves of yield

Staking multiple wallets or doing shorter stakes intentionally – Does it make sense?

If you haven’t already staked and your intention is to take a bit of profit, staking using multiple wallets with a lower amount of either Icosa or Hedron can give you the ability to do so. This means going to app.icosa.pro and click the ‘create HDRN or ICSA Stake’ Button and typing in an amount of Hedron or Icosa that would get you either a 30- or 90-day stake, depending on your time frame. When you type in an amount of Icosa or Hedron, the pop-up menu will show you in advance how many days minimum you must serve for that amount without having to create a stake first.

The downsides to this strategy with Icosa are that you will not be able to get more than a 5% bonus at the end of your stake should you even do a 90 day minimum stake. If you do only a 30 day minimum, you will get no bonus on the yield earned. Since Icosa is burned from the supply when it is staked, the current circulating supply is 644,563 and in order to get a 30 day Icosa stake you must stake 6 tokens or less. If you want a 90 day stake, you have to stake between 7 and 64 tokens. This is a very insignificant portion of the total pool size and would likely not yield much at all, as 64 Icosa is currently worth around $92.

Within the Hedron Pool, you can currently stake as high as 11.2 Billion HDRN and only serve a 90 day stake. That means you can currently lock up $39,760 and only have to serve 90 days. If you wish to serve 30 days minimum, anything less than 1.12 Billion HDRN will allow you to do so. By staking up to 11.2 Billion Hedron, the pool percentage that you could get would be no higher than 0.04%, for $39,760. Let’s compare this data to Icosa staking. In order to stake an equivalent amount in Icosa of $39,760, you would need 28,813 ICSA tokens. This would net you 0.1547% of the pool, which is 3.8 times more effective in gaining pool percentage than Hedron for the money. This multiple difference is the same across the board in dollar-for-dollar comparison. The downside is that in order to stake anything over 6500 ICSA you must agree to a 360 day Minimum stake length. So, even if we were taking the 30 day maximum staked Hedron of 1.12 Billion, worth $3,976, and then moved that dollar amount to Icosa, you would have to serve 180 days Minimum. So the trade-off for a 3.8x increase in pool share per dollar, is a 4+ times difference in the minimum stake days required.

So when it comes to earning yield and using this strategy you must ask yourself if you are willing to wait for 3.8 times more yield per dollar in Icosa alone, or if it makes more strategic sense to have access to your principal and yield sooner knowing that having access to your Hedron may allow you to take advantage of good deals on HSI’s.

What is a good deal?

What exactly makes an HSI a ‘Deal’ during these auctions in regard to how much Hedron you should burn?

There are many ways to view what a deal is depending on how you are valuing an HSI. If you are valuing an HSI based on its future Hex yield plus the Hedron it can mint, the price you are willing to pay while still feeling as though you are getting a ‘Deal’ is going to be the highest. Users who value an HSI based on these criteria are likely to burn the most Hedron of any type of user bidding on the auctions. We also must consider that there may be an emotional element to this type of bidder, meaning they could be willing to burn far more than normal to acquire a stake.

If you are strictly basing your valuation off the base value of an HSI, you will be looking to burn less dollar value in Hedron than the base stake value is worth. So, a deal for this type of valuation is anything less than the cost of the stake originally. Of course, the lower the winning bid the better the deal, but for larger HSI’s with 10x Hedron bonuses and lots of T-Shares, these stakes will be highly competitive most likely. The final valuation a user could use is to look at Hedron in terms of T-shares and ignore dollar value. Since one 5555 day T-share stake will always mint 5,555,000 HDRN, a user could view the value of 5,555,000 Hedron as one T-share staked max length. This user could be only looking to redeem the minimum bid (or as close as possible) and maximize the use case of their Hedron tokens. While this is rare scenario to find, those who can find it will be able to maximize the use case of their Hedron in redemption value of T-Shares.

For the full Q&A as well as how to get your hands on an HSI bidding calculator, watch the video below and check out the links in the description!

- CRYPTOGRFX

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