Calculating HEX APY after BigPayDay

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What Annual Percentage Yield (APY) will HEX Stakers by getting on November 20th of 2020, the day after the BigPayDay happens? Even though this number is liquid and subject to change based on Free Claims, Open Stakes and more, there is a simple formula to work out what a HEX Stake will pay you after Nov 19th. But to use the formula, there are some terms we must know.

hex apy on bigpayday

Total Supply

The total future supply of HEX changes as more people free claim and bonuses are paid for referrals and virality. A full list of these incentives and profit centers can be found on HEX.com. Today, the Total Supply of HEX stands at 388.0 Billion. That number will be important in our calculations of future APY.

Total Supply: 388.0 Billion

Locked Supply

The process of Staking HEX actually burns the coins that are Staked. Staking therefore takes coins out of circulation. But while they’re ‘burned’, there is still a ledger showing the total number of locked coins. This figure is known as the Locked Supply. The coins don’t technically exist again until they are minted by unstaking. The Locked Supply is important because it allows us to estimate who the recipients of the BigPayDay bonuses will be and how they will be distributed on November 19th.

Locked Supply: 54.5 Billion

Circulating Supply

The inverse of the Locked Supply is the Circulating Supply. The easiest way to understand this number is that it’s all the coins that are currently circulating or NOT Staked. As you can probably guess, Total Supply is Locked Supply + Circulating Supply.

Circulating Supply: 333.5 Billion

% Staked

The percentage of Staked coins is a key factor in determining the Annual Percentage Yield to an individual. After BigPayDay, HEX inflates at exactly 3.69%. But this inflation is only paid to Stakers. So the number of coins Staked directly impacts the APY of each Staker. As more people Stake, the same inflation is paid to a greater number of Stakers which dilutes the APY for each individual. To determine the percentage of Staked coins, we take the Circulating Supply and divide it by the Total Supply.

% Staked: 54.5 Billion / 388.0 Billion = 14.05%

BigPayDay

On the BigPayDay, all the unclaimed HEX that Bitcoin Holders have chosen not to Mint will be distributed to the Staker class. This is the largest profit center in the history of HEX and is a one-time event that will not be repeated. The amount of HEX distributed on BigPayDay is subject to change as with everything in the HEX ecosystem.

BigPayDay: 183.718 Billion

Total Supply on BPD

The Supply of HEX on the BigPayDay is a projection that takes the current Supply and add the BigPayDay bonus to give us the Total Supply on BigPayDay.

Supply on BPD: 388.0 B + 183.718 B = 571.7 B

Locked On BPD

When the BPD HEX is distributed to the Staker class, this will both inflate the Total Supply and the Locked Supply. But it will not have an impact on the Unlocked Supply. This means that in effect, the Staker class will see a huge increase in their total ownership of HEX both as a raw number and as a percentage of the Total Supply. To find the Locked Supply on BPD we take the Locked Supply and add the BigPayDay.

LOCKED SUPPLY BPD: 54.5 B + 183.718 B = 238.2 B

% Staked BPD

As with the current % Staked number, the % Staked on BPD uses the same calculation. We take the Locked On BPD and Divide by the Total Supply on BPD. When expressed as a percentage this tells us the ratio of coins held by Stakers relative to the Total Supply.

% STAKED BPD: 238.2 B / 571.7 B = 42%

BPD APY

This brings us to the most important calculation we can make for anyone who is interested in the HEX project beyond the BigPayDay. What will the annual percentage yield be on Nov 20th, 2020? To find this number we take the rate of inflation inherent in the system of 3.69% and divide this by the % Staked on BigPayDay.

BPD APY = 3.69% / 42% = 8.86%

Summary

So there you have it, if the BigPayDay were to happen today, the Annual Percentage Yield for a HEX Staker tomorrow would be 8.86%. Not bad when you consider that most certificates of deposit pay at most 2% annually which is often less than the value of inflation. Please note that we have not factored in emergency end stake and late stake penalties to this number. With those penalties included, the APY will naturally be higher, but this gives us a good baseline to work with. We anticipate that the % Staked will increase between now and BPD, but probably not by as much as many others are predicting.

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