What is Hex cryptocurrency? Is it a pyramid scheme? - YouTube

Created in 2019 by Richard Heart, Hex  cryptocurrency was launched on the Ethereum  

network and describes itself as the first  certificate of deposit (CD) on blockchain.

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Earn rewards by staking coins for longer periods

Here, investors can lock up or stake their  holdings for a specific period and get rewarded  

in return, i.e., the longer one stakes,  the more rewards are earned and vice-versa.

Must Read: What does staking mean in crypto?

Also, as more Hex tokens get locked away,  

they become scarce, thereby  driving up the token’s price.

Here, proceeds come from Hex’s price rises  

and penalties are imposed if  its investors withdraw early.

In other words, this project rewards its  investors by offering them additional  

Hex tokens who lock up large amounts of tokens  and leave them untouched for longer periods,  

while those who withdraw early are penalised.

Related Read: Is crypto staking profitable?

This staking and reward model keeps Hex’s  inflation and price volatility in control.

More interest offered by  Hex than in regular bank CDs

Investors can choose to lock Hex tokens for  any time duration between 1 to 5,555 days.  

Hence, by staking the tokens,  one can gain interest every day.

It is noted that the average annual  percentage yield (APY) here is over  

40% as compared to traditional bank CDs,  wherein the average is even less than 2%.

Thus, with no banking fee,  overhead expenses, or hidden costs,  

Hex is a high-interest investment tool.

How to trade in Hex crypto

Though, as of now, a Hex coin is not  available on Binance or Coinbase,  

it is easily available on Uniswap,  HitBTC, YoBit, and 1Inch, among others.

Is Hex just a pyramid scheme?

While many short-term Hex users are attracted to  this crypto owing to its staking, reward model and  

earning attractive gains by locking up  their Hex tokens for a longer duration,  

some analysts and investors think otherwise.

Interesting Read: Why is China’s Hebei  province planning to suppress crypto mining?

Many believe that it is a Ponzi  scheme as no serious crypto investor  

looks for decentralised banking services.

Moreover, crypto analysts  say that crypto investors  

generally look for short-term gains,  and hence, Hex’s business model is  

destined to fail as there are no holders opting  for crypto investment designed for the long run.

Also, here staking does not add any real value  to the HEX crypto. Profits are derived from  

the investors to give to other investors. In  other words, the Hex model works on a scheme,  

wherein the value is taken from  one person to pay the other person.

Do Read: Seven unbelievable  facts about cryptocurrencies

And its opposers opine that  this model will eventually die  

when the scheme runs out of liquidity.

Bottom Line

Given the volatility in the crypto market,  

one should invest carefully in these digital  currencies and treat crypto tokens with a caution.