Why Are HEX T-Shares Deflationary?

HEX is, generally speaking, very easy to understand: You can buy HEX and hold it “liquid” for however long you want just like Bitcoin. OR … you can buy HEX and become a Miner and accumulate more HEX over a duration of your choice - longer pays better and more (HEX) pays better. HEX rewards the holders for holding. But only if you interact with the smart contract and commit to becoming a Miner.

Okay, that’s easy to understand. So let’s get into the weeds a bit and discuss these Shares. What’s so unique about these “T-Shares”?

The USD cost of a HEX T-Share is calculated by multiplying two things: the current USD market value of HEX and the current number of HEX required to acquire a T-Share.

First, it is important to note that Mining (sometimes referred to as Staking) is NOT a requirement in the HEX cryptocurrency. Anyone can buy HEX and hold HEX, then sell the HEX whenever they want. This is referred to as keeping your HEX liquid, and this is exactly like Bitcoin. Buy, hold, sell. That’s all Bitcoin does - it just sits there while holders wait for the price to increase. Remember, the miners get the inflation but the Bitcoin miners have to sell most of their Bitcoin rewards to pay overhead costs.

But HEX offers the opportunity to get rewarded for holding. Bitcoin can’t do that. To become a HEX Miner, you simply interact with the smart contract and make a promise to the contract. You decide how much liquid HEX and for what time period you want to hold. The amount of shares you receive is determined by the specific number of HEX required at that point in time to acquire a share.

The share “rate” is always increasing. This hard coded feature of HEX ensures that the amount of shares one receives is slightly more difficult to achieve (in HEX terms) every time your Mining term ends. For example, if you chose to Mine for 365 days, at the time of your completion, if you chose to take your same principle and start a new Miner, the required HEX needed to acquire the exact same share as before will have increased.

The increased share rate is hard coded and immutable. EVERY TIME A MINER ENDS, THE PROTOCOL INCREASES THE AMOUNT OF HEX REQUIRED TO REGAIN THAT PREVIOUSLY HELD SHARE.

Remember, this is all in HEX terms - not USD. Let’s use an example:

Let’s use imaginary numbers first, so you can understand the protocol.

Let’s imagine that 365 days ago you chose to become a Miner, and you committed to holding 100,000 HEX for 365 days. Let’s say the “T” Share rate at the time was 20,000 HEX. Your 100,000 HEX, therefore, acquired 5 T-Shares. So, for the entire year, your HEX Miner (with 5 T-Shares) earned you 5 x (daily T-Share payout in HEX) x 365. 

Now, after your 365 days you interact with the HEX smart contract and end your Miner. The principle + rewards (yield) are now LIQUID, once again. Let’s imagine you want to start a Miner again because you liked seeing your HEX portfolio increase just for holding, and so you commit once again to holding 100,000 HEX for 365 days. You will immediately notice that, whereas before, the HEX share rate was 20,000 HEX, it has now increased to 21,500 HEX per Share. Therefore, to obtain the same amount of Shares you held previously (earlier in time), more HEX is required or a longer duration is required. The above example is hypothetical and not based on actual numbers.

THE HEX SHARE RATE IS ALWAYS INCREASING. The increase is triggered every time a Miner ends. This has the result of making Shares harder and harder to acquire, which makes them (by design) DEFLATIONARY. Once the USD price of HEX is introduced into these examples, the compounding effect of the HEX Mining protocol becomes unbelievably powerful, and the upward trend of the USD value of a T-Share shows why the Shares are deflationary.

Let’s add hypothetical USD values of HEX to understand better the dollar pressure on these T-Shares. The current T-Share rate at the current time is close to 40,000 HEX. Let’s do some basic math to determine T-Share cost.

HEX PRICE IN USD  and T-SHARE COST

- .01 = $400

- .05 = $2,000

- .10 = $4,000

- .20 = $8,000

- .30 = $12,000

- .50 = $20,000

- 1.00 = $40,000

You get the point. The cost of a SHARES in USD can rise  and fall depending on the actual USD price of HEX. But the SHARE RATE is always increasing, meaning that the required amount of HEX needed to obtain a share is always increasing.

HEX SHARES BECOME SCARCER AND SCARCER OVER TIME. The Miners are always available, but the amount of shares you receive for your HEX goes down. Consider this: if you acquired 1,000 Shares in 2020 when there were over 10,000,000 T-Shares, and committed to the longest available Mining time of 5555 days (15.2 years), by the time 2035 arrives, there may only be 100,000 T-Shares remaining in the system. This means that you would be receiving the vast amount of the inflation pie, compared to all the other HEX Miners. What will the USD value of a single HEX be in 2035? If HEX is the better Bitcoin, then it could be quite valuable. 

When T-Shares (trillion shares) are no longer affordable and all the T-Share Miners have ended their time commitments, they will no longer exist. T-Shares will literally deflate to zero.

B-Shares (billion shares) will continue to be affordable and commonly acquired and these will be just as deflationary as T-Shares. 

M-Shares will follow, etc. etc.