Nick Chong · 1 week ago · 2 min read · Insights via Grayscale Investments
Richard Heart’s HEX token raises concerns in the crypto community
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HEX, a new cryptocurrency that claims to be the first high-interest blockchain certificate of deposit, is facing significant backlash after different analysts argue that the project was launched mainly to enrich its founder.
The new crypto on the block
On Dec. 2, Richard Heart, a blockchain thought leader and cryptocurrency investor, launched a new cryptocurrency, dubbed HEX, on the Ethereum network via a Bitcoin UTXO snapshot. Heart claims that the token is “designed to increase in value faster than anything else in history,” and “do over 10,000x returns in under 2.5 years.”
Thus far, the project received over 33,000 ETH, worth approximately $5 million, in “donations” that were automatically “transformed” into HEX.
Despite its popularity, many analysts, such as Goldman Sats, argued that HEX is far beyond a Ponzi or pyramid scheme. In a recent Medium post, Goldman assured that the project has its “founder’s perpetual self-enrichment” embedded into the protocol.
Goldman Sats said:
“A deeper analysis shows HEX was designed for one thing only: to enrich Richard Heart himself, at the expense of every other participant. Even in a sea of ethically dubious projects, HEX stands out as being the most egregious.”
According to the analysts, the way HEX was created gives Heart ownership of almost half of the tokens through something called the “Origin Address.” Described in HEX’s “Contract in Layman’s Terms,” the Origin Address receives a copy of all bonus payments specified in the protocol regardless of the success of the project. And, half of the penalties involving staking.
“If more Bitcoin holders free claim, the Origin Address will receive more ‘Speed Claim’ and ‘Referral’ bonuses on the front end, as well as more ‘Critical Mass/Virality’ bonuses at the end of the launch phase. If fewer Bitcoin holders claim, the Origin Address will receive more “We Are All Satoshi” bonuses that distribute all the unclaimed HEX to stakers.”
Goldman believes that even if Heart decides to “dump all his HEX and abandon the project,” the balance in the Origin Address would still increase over time with penalized HEX. He concluded by stating that Heart “created a game, given himself most of the chips and made it so that the rules will always be in his favor.”
Goldman Stats is not the only prominent figure in the crypto community who has stepped forward against Richard Heart’s new cryptocurrency. Tone Vays, a former VP at JP Morgan Chase, called it a “shitcoin” and compared it to Monopoly money. Meanwhile, Giacomo Zucco, a Bitcoin evangelist, created zuxbux.win to mock HEX. And, Peter McCormack, host of the What Bitcoin Did podcast, call Heart a scammer.
. @PeterMcCormack shows everyone how to deal with the HEXit Scammer, he dominates this stream and does not let @RichardHeartWin divert into other distractions to steer the discussion away (his usual tactic), Peter stays on topic and ask where the ETH goes persistently ! 👏👏👏 pic.twitter.com/5FiqmPLVeY
— Crypto Meme Central 🔞Jan 3🔑 (@CryptoScamHub) December 6, 2019