The HEX community, led by the controversial figure Richard Heart, found itself in the midst of a social media storm after Eric Wall, a once-prominent member turned critic, tweeted an intraday chart of HEX-on-Ethereum’s price collapse.
This led to widespread speculation about a potential rug pull orchestrated by Heart. However, a closer look reveals a more nuanced situation.
HEX is much better than eHEX (the HEX on #Ethereum.) Why? Gas fees. Liquidity. Slippage. Common sense. Why would you pay a thousand dollars to end stake instead of pennies? Why would you want crappier order execution, buying into a thinner order book, with more slippage, getting…
— Richard Heart (@RichardHeartWin) March 10, 2024
HEX on Two Blockchains
HEX, Heart’s flagship creation, operates on two blockchains: Ethereum and PulseChain. Heart initiated HEX on Ethereum but later shifted his focus to PulseChain, citing lower fees and faster transactions as advantages for ‘Hexicans.’
Despite this transition, the controversy surrounding HEX has escalated due to recent price fluctuations and legal troubles.
Heart, a former Bitcoin maximalist turned altcoin creator, faces SEC scrutiny for alleged violations of federal securities laws related to HEX, PulseChain, and PulseX.
Divergent Price Movements and SEC Lawsuit
On Sunday, when Heart endorsed HEX-on-PulseChain and disavowed HEX-on-Ethereum, HEX-on-Ethereum experienced a significant intraday drop of 70%, reducing its fully diluted valuation from $6.4 billion to $2.6 billion. In contrast, HEX-on-PulseChain rallied 11%, reaching $12.3 billion.
The SEC lawsuit against Heart adds another layer of complexity to the situation. While the immediate price fluctuations raise eyebrows, the broader decline in the value of Heart’s altcoins over the past two and a half years remains a key concern. The market capitalization, once soaring to $85 billion, has faced a slow decline, leaving investors skeptical about the long-term viability of HEX, PLS, and PLSX.
Complicating Factors and Counterarguments
Two complicating factors muddle the narrative. Firstly, the launch of PulseChain coincided with a free duplication of all HEX-on-Ethereum onto PulseChain, alleviating potential harm to long-term holders.
Secondly, Heart has consistently highlighted the long-term nature of HEX staking, emphasizing a three-month period where the USD value of HEX-on-Ethereum remained relatively flat, while HEX-on-PulseChain witnessed a 60% increase.
Despite these factors, questions persist about Heart’s financial dealings, personal expenditures, and the overall decline in the value of his altcoins. The skepticism from the crypto community remains, with influential figures expressing doubt about the future of HEX.
As the SEC lawsuit progresses, the fate of HEX, PLS, and PLSX hangs in the balance, leaving investors and observers eagerly awaiting the resolution of this intricate and controversial chapter in the crypto world.