HEDRON — Encapsulates your HEX stakes

Mint FREE $HDRN for the life of the stakes

Hedron Contract Guide

Hedron is comprised of three major features. Minting, Borrowing, and “Tokenized” HEX Stakes. There is no buy-in to Hedron and no Sacrifice Phase. The only way to participate in Hedron is to already have or to create a HEX stake. All smart contracts which collectively build the Hedron ecosystem are immutable and have no admin keys.

NOTE: Hedron days move forward at midnight (00:00:00) UTC, the same time as HEX days.

1. Minting

Both “instanced” (HEX stakes wrapped inside a HSI contract) and “native” (standard HEX stakes made directly in the HEX contract) can use this feature. Read the section titled “2. Tokenized HEX Stakes” for more information on HSI contracts.

Minting will grant the HEX staker HDRN ERC20 tokens based upon how many B-Shares (one billion shares) the stake has been allocated and how many days the HEX staker has served within the stake. There are no obligations to minting, these tokens are freely minted and can be used however the minter sees fit. The math is as follows.

Amount of HDRN Minted =

(HEX Stake B-Shares) * ((Days Served) — (Days Already Minted))

For example, let’s say you have a HEX stake, with 100 B-Shares and has served 500 out of 5,555 days, and you are minting for the first time. This would plug into the equation as follows when you execute the mint function.

50,000 HDRN =

(100 B-Shares) * ((500 Days Served) — (0 Days Already Minted))

If you were to serve 100 more days in the HEX stake, and call the mint function again, this is what would plug into the equation.

10,000 HDRN =

(100 B-Shares) * ((600 Days Served) — (500 Days Already Minted))

You cannot mint more than the amount of servable HEX days, so in this example after minting for 5,555 days, there will be no more HDRN to mint for this particular HEX stake. To continue minting you will have to use a different HEX stake, or end the current HEX stake and create a new one.

If you Emergency End Stake (EES) or otherwise end your stake before minting your HDRN, you will forfeit any unminted HDRN.

2. Tokenized HEX Stakes

Only “instanced” (HEX stakes wrapped inside a HSI contract) can use this feature. Read the section titled “2. Tokenized HEX Stakes” for more information on HSI contracts.

Hedron is capable of encapsulating (layer 2) a HEX stake inside what we call a “HEX Stake Instance” (HSI) contract. This contract is a single use Solidity Smart Contract that has single purpose, to house a single HEX stake. These contracts are deployed and managed by the “HEX Stake Instance Manager” (HSIM) contract, a core component of Hedron. When the HEX stake inside and HSI contract is ended, the HSI contract itself is destroyed.

These HSI contracts have their own Ethereum / PulseChain addresses and interface directly with HEX to facilitate starting a HEX stake, ending a HEX stake, and exposing the HEX Good Accounting feature to the user. While these contracts do have addresses on their respective blockchains, they do not have private keys of any sort. Control over the HSI contract is mapped to the user’s wallet via the HSIM contract.

The user can “tokenize” a HSI contract into an ERC721 NFT token. This token can be transferred to another wallet of your choosing, whether it be via direct transfer or via sale on a compatible NFT marketplace. The receiver of this HSI NFT can then opt to “detokenize” it, giving them full control of the HSI contract, and subsequently, the HEX stake contained within it.

While “tokenized” the user cannot mint against, borrow against, or end the HEX stake. To perform these actions the HSI contract must be “detokenized” first. Good Accounting however, can still be called on a “tokenized” HSI contract.

The HSI contract has a significantly higher cost to start a HEX stake, but conversely a significantly reduced cost to end a HEX stake due to the HSI contract being given gas credits for self-destruction on stake end. The actual amounts will vary depending on HEX stake length.

3a. Minting Advance (Borrowing)

Only “instanced” (HEX stakes wrapped inside a HSI contract) can use this feature. Read the section titled “2. Tokenized HEX Stakes” for more information on HSI contracts.

WARNING: Borrowing has intrinsic risks! If you fail to meet your installment obligations before the default threshold (90 Hedron days), your position can be liquidated by other users of the Hedron protocol and your HEX stake forfeited to them. Hedron itself does not liquidate borrowers, it leaves that task to the other users of the protocol. This is an advanced feature intended only for users who can manage the risks associated. We do not advise any user attempt to use this feature without having a complete understanding of these risks!

Borrowing in Hedron is similar to minting, but takes an opposite approach. Instead of requiring the user to have served days within the HEX stake to be granted HDRN tokens, Borrowing grants the user all HDRN that they would otherwise have had to wait for up front. We call this an Advance and not a loan because the user will be receiving the same amount of HDRN they would have normally receive via minting, but without the associated wait.

There are three primary limitations placed on the HEX stake when this action is performed.

A. While there are unpaid installments on the borrowed HEX stake, the HEX stake cannot be ended.

B. While there are unpaid installments on the borrowed HEX stake, the HEX stake cannot be “tokenized”.

C. While there are unpaid installments on the borrowed HEX stake, the HEX stake cannot be be minted against.

Good Accounting can be called on any actively borrowed HEX stake should it be necessary. For example, the term of the advance exceeds the lifetime of the HEX stake. The math for borrowing is as follows.

Amount of HDRN Borrowed =

(HEX Stake B-Shares) * ((Total Days Staked) — (Days Already Minted))

Using the same example in the section titled “1. Minting” (a HEX stake, with 100 B-Shares and has served 500 / 5,555 days) and you have not minted any days, it would plug into the equation as follows.

555,500 HDRN =

(100 B-Shares) * ((5555 Total Days Staked) — (0 Days Already Minted))

If you were to mint the 500 mintable days before borrowing against the HEX stake, it would plug into the equation as follows.

505,500 HDRN =

(100 B-Shares) * ((5555 Total Days Staked) — (500 Days Already Minted))

There is a premium charged to the user in order to facilitate the borrowing of HDRN against a HEX stake. This premium is charged as a percentage of total of the borrowed amount of HDRN. It is calculated to be ½ (one half) of the HEX global APY, and is fixed for the entirety of the advance. This premium is only charged to the principal of a premium installment (fixed), not the total remaining balance (revolving).

For example, if the HEX global yield is 40% APY, the Hedron borrowing premium is 20% APR. Because this borrowing premium is only applied to the principal of each premium installment, the total premium percentage paid is equal to the Hedron APR (E.g. 20%) divided by 12 (E.g. 1.67%)

The term of the advance is also fixed and is equal to the amount of days borrowed against the HEX stake.

3b. Installments (Payments)

Only “instanced” (HEX stakes wrapped inside a HSI contract) can use this feature. Read “2. Tokenized HEX Stakes” for more information on HSI contracts.

NOTE: All payments made to the Hedron contract are burnt by the contract (principal and interest). This acts as a deflationary measure, but also ensures the only entity to directly benefit from these advances is the borrower and only the borrower

Payments made on borrowed HDRN are a function of the total days borrowed. These payments are divided into 30 Hedron day installments. The borrowing premium is ALWAYS charged when paying an installment. Installments themselves can be paid as often as the user prefers and can be made in advance as far into the future as the user prefers

There are no late payment penalties. However, if an installment is to go 90 or more Hedron days without a payment (30 original payment days plus an additional 60 Hedron days) your HEX stake used as collateral for the advance will be made available to other Hedron users for liquidation. See the section titled “3d. Liquidations” for more information.

Using the same example in the section titled “1. Minting” (a HEX stake, with 100 B-Shares and has served 500 / 5,555 days) and you have not minted any days, let’s assume the following advance has been made.

555,500 HDRN =

(100 B-Shares) * ((5555 Total Days Staked) — (0 Days Already Minted))

The installment structure would be laid out as follows

A. You would be expected to pay 186 installments in total. 186 Installments = ((5555 Total Days Borrowed) / (30 Day Installment Window))

B. The principal of the installment to be burned from your address would be 3,000 HDRN. 3,000 HDRN Principal = (100 B-Shares) * (30 Day Installment Window)

C. Assuming a premium of 20% APR, the premium of the installment to be burned from your address would be 49.32 HDRN. 49.32 HDRN Premium = ((3,000 HDRN Principal) * ((20% Premium APR) / (365 Days))) * (30 Day Installment Window)

D. Assuming a premium of 20% APR. The total premium percentage paid back during this period would be 1.64% 1.64% Premium Percentage = 9,131.51 Premium / 555,500 HDRN Principal

If you have noticed, 5,555 borrowed days is not cleanly divisible by 30 Hedron days. There is a remainder of 5 days. This means your final installment will be substantially less than all previous installments as instead of being calculated against the 30 installment days, it will only be calculated against the 5 remaining days to be paid. All proceeds from installments are burnt by the contract.

3c. Payoffs

Only “instanced” (HEX stakes wrapped inside a HSI contract) can use this feature. Read “2. Tokenized HEX Stakes” for more information on HSI contracts.

NOTE: All payoffs made to the Hedron contract are burnt by the contract (principal and interest). This acts as a deflationary measure, but also ensures the only entity to directly benefit from these advances is the borrower and only the borrower.

Payoffs work similar to payments, but instead pays off the entire balance of borrowed HDRN only paying the premium up to the current Hedron day. The user may desire to use this feature not only to reduce portfolio risk, but also with the goal of settling their current HDRN advance only to create a new advance that takes advantage of a reduced Hedron borrowing premium APR due to a decreased HEX global yield APY.

Using the same installment example in the section titled “3b. Installments (Payments)”, assuming the user had paid 2 out of the 186 required installments, and the user is 10 Hedron days into the 3rd installment cycle. The payoff structure would be laid out as follows.

A. The principal payoff to be burned from your address would be 549,500 HDRN. 549,500 HDRN Principal =

(555,500 Borrowed HDRN) — (6,000 Already Paid Principal HDRN)

B. Assuming a premium of 20% APR, the premium payoff to be burned from your address would be 5.48 HDRN. 5.48 HDRN Premium =

((1,000 HDRN Principal) * ((20% Premium APR) / (365 Days))) * (10 Days Into Installment Cycle)

If the user has paid installments towards the borrowed HDRN that are sufficiently into the future as to have pushed the installment due day beyond the standard 30 Hedron day window, the payoff function will charge no premium upon payoff. Additionally, the payoff function WILL NOT REFUND installment premiums the user has already paid in advance if they go beyond the current Hedron day. The HDRN in this case has already been burnt by the payment function and cannot be returned.All proceeds from payoffs are burnt by the contract.

3d. Liquidations

Only “instanced” (HEX stakes wrapped inside a HSI contract) can use this feature. Read the section titled “2. Tokenized HEX Stakes” for more information on HSI contracts.

NOTE: All liquidation balances paid to the Hedron contract are burnt by the contract (principal and interest). This acts as a deflationary measure, but also ensures the only entity to directly benefit from these advances is the borrower and only the borrower.

WARNING: It is advised to never allow this situation to become reality as you are taking on significant risks to your portfolio.

If a borrower fails to meet their advance installment requirements by the due day (30 Hedron days from the day of advance start or previous installment due day) and allows and additional 60 Hedron days to pass (90 Hedron days total), their advance will be considered in default and the Hedron contract will allow other Hedron users to liquidate the borrowers HDRN position and claim the HEX stake used as collateral for themselves. Hedron itself does not liquidate its own users, it allows other users of the protocol to perform this action of their own free will.

NOTE: The borrower can pay installments at any point to reduce the outstanding days to less than 90 Hedron days. As long as the outstanding days do not exceed 89 Hedron days in total, their position cannot be liquidated. Each installment subtracts 30 Hedron days from the total outstanding days. Granted, if the borrower allows 90 Hedron days to elapse, they will be placed in a position of being in a figurative race between themselves and the liquidator as to who can get their transaction committed to the underlying blockchain as quickly as possible.

In order to liquidate a HDRN advance, the liquidator will create a transaction which begins an auctionlike process. The initial bid will be the remaining balance of the HDRN advance, and must be paid up front when starting the liquidation. For twenty-four hours, other Hedron users will have the ability to bid more HDRN than the previous bidder. They also must pay the HDRN used for bidding up front, any newly placed bids will return the previous bidders HDRN.

If a bid is placed within the last five minutes, the liquidation will be extended up to a maximum of an additional five minutes. This process will continue until there are no new bids placed within the fiveminute window. Once the liquidation has concluded, the winning bidder may exit the liquidation and claim the HEX stake for themselves. All proceeds from these liquidation auctions are burnt by the contract.

4a. Launch Phase Bonus (LPB)

The Launch Phase Bonus is a time limited bonus that applies only during the first one hundred Hedron days after the launch date. The bonus itself starts as a 10x multiplier only to minted HDRN, not borrowed HDRN. This 10x multiplier drops by 1x every 10 Hedron days until settling at 0x for the remaining life of the contract. This bonus is applied ON TOP of your normal minted HDRN payout, so conceptually it may be easier to think of this bonus as ranging from 11x to 2x.

For example, let’s assume your were expecting a HDRN mint to grant you 555,500 HDRN and you were to mint on Hedron day one to claim the 10x multiplier. The bonus would grant you the following amount of HDRN.

6,110,500 HDRN = 555,500 Base HDRN + (555,500 * 10) Bonus HDRN

Any Launch Phase Bonuses claimed will record themselves to your stake, and remain for the servable life of the stake or until the stake is ended, whichever comes first.

4b. Advance to Mint Ratio Bonus (AMR)

The Advance to Mint Ratio (AMR) bonus exists solely to ensure there is always enough free market HDRN to cover all borrowing premiums. This bonus triggers only if the global amount of borrowed HDRN is to exceed more than 50% of the total supply of HDRN in existence. For every percent the borrowed supply exceeds 50% of the total supply, this bonus will increase by 0.2x. This effectively make the range of this bonus 0.2x (51% of total supply borrowed) to 10x (100% of total supply borrowed).

When this bonus is triggered it will exist for only a single Hedron day, scaling downward on following days until the ratio is fixed and the total borrowed supply is 50% or less of the total supply.

5. Addresses of Interest

A. Source Address:

The source address is granted a copy of all HDRN bonuses if and when they occur. It is also granted any unminted HDRN that results from an Emergency End Stake (EES). The owner of this address and their intentions for it are unknown and / or undisclosed. You must not have any expectations of profit from this address.

B. Flow Address:

The Flow Address receives a 1% royalty on HSI NFT sales done on marketplaces that support and / or enforce royalties. This royalty only applies in this case, not on token transfer. It is up to the NFT marketplace to enforce these royalties, some do not enforce and some enforce higher royalties for themselves. The 1% royalty is more or less just a suggestion to the marketplace. The owner of this address and their intentions for it are unknown and / or undisclosed. You must not have any expectations of profit from this address.

HEDRON system Flow chart

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