HEX token – everything you need to know before buying

BASIC DEFINITIONS

In HEX, in order to participate in the yield distribution, you
must “Stake” your liquid HEX. Staking is the act of locking up your HEX for a fixed period of
time. When you stake, your HEX is converted to “Shares” (the liquid HEX is burned for newly created Shares). Your Shares represent your respective percentage of the overall distribution of the yield… ie, ”your piece of the pie”

Example:
• Total # of Shares in the staker pool = 100
• You own 2 Shares
• Therefore, You receive 2% of the total daily payout (in HEX)
each day
• Yield is made up of the inflation (3.69% APY of total supply)
plus penalties from Emergency End Stakes/Late End Staking
• T-Share = a Trillion shares
• B-Share = a Billion shares

CONVERTING HEX TO SHARES

Calculation of the # of Shares you will receive:
The amount of HEX to be staked/”Share Rate”Share Rate is the amount of HEX required to acquire a Trillion Shares (T-Share) (ex. Share Rate (Dec 9, 2021) = 19,678 HEX/T-Share)

To encourage people to stake longer and bigger (larger amount) there are 2 separate bonus features: 
1. Longer Pays Better
• You receive 20% more “Effective HEX” for each year you stake
• Effective HEX – This is used to calculate your Shares
• This bonus has a maximum of 200% additional “Effective HEX” (i.e. 10 year stake)

• The Effective HEX is then used to determine your # of Shares
2. Bigger Pays Better
• The larger the amount of HEX you stake, the more you make
• You can receive up to an additional 10% Effective HEX (capped
at 150 million HEX)

BONUS EXAMPLE

*Bonus Example:

• 100,000 HEX : 5yr Stake : Share Rate = 20,000 HEX/T-Share

• Effective HEX = Principle + (Principle*(years of Stake*20%))

• 100,000 + (100,000*(5*20%)) = 200,000 Effective HEX
• Formula : # of Shares = Effective HEX/Share Rate
• 200,000 Effective HEX/20,000 = 10 T-Shares
• NOTE: the amount of T-Shares remains constant for the
duration of your stake.

Note: The Bigger Pays Better Bonus has been ignored for simplicity in this example.

LONGER STAKE OUTPERFORMS MULTIPLE SHORT STAKES

Fundamental Principle : A long Stake will outperform multiple
successive short Stakes

Problem : In the development of HEX, it was realized that placing short Stakes and using the yield to compound back into a new Stake & repeating this multiple times (over months/years) would create a scenario where this compounding effect would outperform a single long Stake over the same duration.

Solution: HEX developers designed an ingenious feature that will
force the Share Rate to continuously rachet up incrementally
(i.e. Share Rate will never go down).

Solution Rule : When your Stake ends, you cannot create a Stake
with equal parameters (same amount of HEX and same length of
stake) and receive the same # of Shares.

SHARE RATE RATCHETING: HOW IS THIS DONE?

*Stake Start:
• # of T-Shares = # of HEX/T-Share Rate
• # of T-Shares = 100,000/20,000
• # of T-Shares = 5
• Yield (at Stake maturity of 30 days) = 5 T-Shares x 6 HEX/day x 30 days = 900 HEX

Recalculation and check of the share rate
• At Stake maturity: In order to satisfy the Rule, The contract will perform a calculation where the amount of Shares is now FIXED and uses the new amount of HEX (Principle plus Yield) to solve for new T-Share rate. This is expressed as follows.
• # of T-Shares = # of HEX (Principle + Yield)/T-Share rate
• Rearrange and solve for T-Share Rate
• T-Share Rate = # of HEX (Principle + Yield)/# of T-Shares
• T-Share Rate = 100,900HEX/5 T-Shares
• T-Share Rate = 20180
• Notice that 20,180 is incrementally greater that 20,000 (original Share Rate)
• This is your new T-Share Rate. It is then compared to the existing system global T-Share Rate. If this rate is greater, it will set the new global T-Share Rate for you and everyone else. If not, (ie: global
rate is higher than your new rate), then you will need to use the global rate if/when creating a new Stake.
•This recalculation and check is performed at the conclusion of every future Stake. This is how the TShare rate continuously ratchets up.

Note: In the example, Bigger pays better was ignored for simplicity