Recently, Richard Heart, who claims to be a Bitcoin thought leader, vigorously promoted his HEX project on Twitter, labeling it as "the best opportunity I have ever seen in my life" and saying that it is a project that can make millions of people truly wealthy. Official information shows that the HEX project claims to be the world's first high-interest blockchain certificate of deposit, providing a considerable ROI return promise to those who join early. Behind this project is marketing expert and cryptocurrency supporter Richard Heart.
PANews found that Heart had been promoting HEX since May 20 last year, when it was still called BitcoinHEX.
Visiting the project's website, one of the many reminders of the rate of return that HEX claimants or investors can expect is the rate of return that they can expect. "HEX aims to achieve the fastest growth in value ever," the website states.
PANews visited the project website and found that a large number of prompts popped up immediately. One of them was that HEX investors could get a high rate of return. In addition, there were promotional slogans such as "high storage value" and "the future of the financial industry".
HEX's rules show that users can earn interest by holding their HEX tokens, and founder Richard Heart claims that depending on the number of people who buy HEX tokens through the smart contract, the annual ROI could be as high as 369%. In theory, these rates of return will attract new people to HEX, and this demand will cause the price to rise rapidly.
According to the introduction, investors can exchange Bitcoin and ETH for HEX to obtain high returns. In short, users who hold Bitcoin can exchange Bitcoin for Ethereum. Users can send their ETH to a designated Ethereum address and obtain the corresponding percentage of HEX tokens on that day according to the percentage of total ETH participation on that day. In addition, the project has also designed a promotion reward mechanism, where users who come through referrals will receive a 10% reward and the referrer will receive a 20% reward. Heart claims that "more than 21,700 ETH have been converted into HEX."
According to Heart, HEX is essentially a time deposit based on Ethereum (if Bitcoin is digital gold, HEX can be compared to a digital time deposit, which is an interest-bearing bank deposit account with a specified maturity date. The deposited funds must remain in the account for a fixed period of time to obtain the specified interest rate.). In this way, users lock HEX for a fixed period of time (at least one year) and can obtain the remaining token share in the pool.
Such a lucrative return does sound attractive enough, but the project has been criticized recently and is considered another Bitcoin Ponzi scheme. In the setting of the HEX project, there are two penalty mechanisms corresponding to the bonus and high interest rate.
First, if the user stops staking within a fixed period of time, he must repay half of the income earned during the staking period as a fine. Second, if the HEX held by the user remains unstaked or cannot be used, the user will face the risk of his HEX being drained. In addition, HEX bonuses are limited to the initial launch phase, but fines are always part of HEX and never expire.
In response, several cryptocurrency analysts have criticized Heart's HEX project. With the project now live and generating more than $3 million in ETH, these criticisms have become louder and louder. Podcast host Peter McCormack and YouTube technical analyst Tone Vays have both questioned it, while another well-known analyst Alex Kruger tweeted: "HEX is the latest useless ERC 20 token. Currently, about $3 million in ETH has been raised through the HEX token sale."
In addition, according to Goldman Sats’ analysis, although the project claims to be the fastest-growing asset in history and can reap a return of more than 10,000 times in 2.5 years, the project has loopholes, including the potential risk of privacy leakage.
Adamant co-founder Tuur Demeester sarcastically tweeted that in the current calm market, scams need to be very sophisticated to succeed, so HEX may be the smartest and most eye-catching. For such high-return investments, investors who have experienced a bear market should be more cautious to avoid losing all their money in the end.
The Block published an article stating that the project's plan has unusual requirements and certain features of an investment contract, and that the Hex token sale may be an unregistered securities offering, but it is not a Ponzi scheme. In a typical Ponzi scheme, investors are told that their investment will be used to fund the business, but their money ends up in the pockets of the scammers, while old investors are paid by new investors, which is not the case with the Hex project.
