“Market cap is a foolish made up quantity and at all times has been. Solely the value you may promote at issues.”

–Richard Coronary heart (HEX Founder)


Earlier than getting began, I’d prefer to thank the HEX neighborhood for serving to Nomics.com perceive HEX a bit higher. Specifically, I wish to thank Dev Kyle and Gunther (creator of HEX Audit) for lending their time to assist my co-founder and I perceive HEX’s provide. We’ve realized loads on this journey, and are available away impressed with the power and high quality of the HEX neighborhood.

I additionally wish to apologize: we bought HEX’s circulating provide unsuitable, and now must make an adjustment that lowers HEX’s market cap. I want we’d had a greater understanding of HEX two years in the past after we first listed your asset. I’d a lot somewhat (1) not must make any changes, or (2) must make corrections that improve your market cap.

I used to be initially going to title this weblog put up “Hex: Decentralized Infrastructure, Centralized Possession, Circulating Provide & Market Cap” however that was too wordy.

I’ve two asks:

  1. In case you have feedback, questions, or criticisms about this put up, I ask that you simply hold them to the feedback part. There’s solely one in all me and a whole lot of oldsters on Twitter and I (sadly) do not need the bandwidth to watch each query on each thread and sub-thread there.  Particularly after I’m generally tagged, and generally not, or Nomics is tagged. Submit away on Twitter in order for you, however I’ll be monitoring feedback right here.
  2. Please give me time to reply. The final time I engaged in a major manner with the HEX neighborhood, extra responses led to extra impatience from the neighborhood. I’d be on trip with my spouse, or placing my children to mattress, and people could be upset after I didn’t reply to a query inside 20 minutes.

There’s a variety of floor to cowl right here, so I’m going to construction this as an FAQ.

I ought to disclose that I’m a HEX holder (though I don’t establish as a HEXican) and that I participated within the PulseChain sacrifice.  We’ve skilled a variety of help from the HEX neighborhood, and for this we’re grateful. That mentioned, we have to make some adjustments to the HEX provide.

In the event you dislike this text, our stance, me, or Nomics I’m sorry. I’ve been grateful to your patronage of Nomics thus far and we’ll perceive when you now wish to go to a different aggregator that provides HEX a better rank. After lots of engaging on Twitter, and conversations with core members of the HEX neighborhood, I imagine we’ve carried out extra to attempt to perceive HEX than any of our rivals. And I hope we get some credit score for that (i.e. evaluate our degree of interactiveness and responsiveness to that of CMC or CG).

I can promise you this…

  1. We’ll by no means copout by gatekeeping you at 201 market cap rating (like CoinMarketCap) or failing to put up a circulating provide in any respect (like CoinGecko).
  2. We’ll do our easiest to listing your PulseChain property earlier than anybody else. We’ll attempt to listing each single PulseChain asset, even very new ones with low volumes.
  3. We’ll at all times keep in dialogue with you and we’re open to evolving the stance outlined under over time.

How one can Have A #1 Market Cap Asset In Much less Than An Hour (If You Learn Nothing Else, Please Learn This)

Each every so often, we screw up and a no-name asset pops above ETH or BTC on our entrance web page.

Right here’s an instance…

Typically, these anomalies (visualized within the picture above) seem when:

  1. Founders, builders, and mission wallets management 90%+ of the availability, and …
  2. Solely a small fraction of the full provide (i.e. 10% or much less) is used to cost the remaining 90%+ of property

Right here’s methods to get a #1 market cap asset in lower than an hour…

  • Step 1: Mint 100 Trillion BEP-20 Tokens on Binance Smartchain.
  • Step 2: Give all however 100 to your self.
  • Step 3: Put the remaining 100 on PancakeSwap in opposition to 0.1BNB after which purchase a token.


You now have a better market cap asset than bitcoin. Which is why, as Richard Coronary heart says, “Market cap is a foolish made up quantity and at all times has been.”

Certainly, it’s my understanding that the irrelevance of market cap is a core a part of the HEX narrative.  That’s, the one factor that issues as an investor is value appreciation and having sufficient liquidity to take revenue (when wanted) with out killing the value. (Congrats to HEX holders, BTW, on being up 2,009.71% within the final yr).

HEX — with a two-year monitor file and 70K stakers — isn’t the identical because the no-name cash that Nomics mistakenly ranks above ETH and BTC often.  However many tasks do interact with the market cap manipulation ways numbered above. And if we didn’t omit mission & founder managed tokens, you’d see not less than 10 scams, day by day, rating above Bitcoin (and HEX for that matter).

Introducing the SquareCircle Case Research

Just lately, we heard from a mission known as “SquareCircle Coin” (the title has been modified for this case examine).

Right here’s some knowledge on SquareCircle Coin:

  • Their high pockets had 99.999899% of the property
  • Their final value on Pancakeswap was $0.022362
  • In the event you contemplate solely the pancakeswap property because the circulating provide (so, simply dex liquidity) their market cap is ~$3
  • In the event you take their declare at face worth, their market cap is $582,000,000,000, which is a contact greater than ETH

My level is that this…

… if Nomics counted 100% of issued provide of all tokens as “circulating” then day by day there could be a number of property rating above Bitcoin (and HEX for that matter) and no one would imagine us.

Because of this, when tasks come to us, we ship them the next…

1. Please clarify the highest 10 holders proven within the block explorer hyperlink you submitted.

2. Please submit all addresses which can be held by the workforce, mission, builders, advertising, advisors, or anybody else concerned within the mission.

3. Please submit all addresses which can be used to burn or deploy tokens

4. Please submit all addresses which can be in any other case non-circulating

For every merchandise above if there are not any addresses that match this class, submit “None.”

(Nomics Survey For Crypto Tasks Issuing Property on Good Contract Platforms)

For tokens issued on good contract platforms (e.g. ERC-20 or BEP-20 tokens) we don’t rely property as circulating if they’re in:

  • Wallets held by the mission proprietor and workforce members
  • Wallets designated for improvement, advertising, airdrops, giveaways
  • Burn wallets
  • Deployers
  • Another pockets that’s locked or non-circulating for an additional cause
  • Wallets hard-coded into the asset good contract to obtain token distributions

For Proof-of-Work property with no recognized pre-mine, we rely all issued tokens as circulating except we’ve got particular/concrete datapoints to counsel that property ought to be faraway from circulation (that is the arduous half).

… now let’s proceed with an FAQ

Q: What’s Occurring?

A: We’re altering the Hex circulating provide, which can have an effect on Hex’s market cap.

Q: Why Are You Exhibiting Hex’s Market Cap on the Entrance Web page of Nomics Whereas CoinMarketCap and CoinGecko are Not?

The market cap rank of Hex is clearly not #201 (or no matter CoinMarketCap has it at proper now).

I feel nearly everybody — together with Hex haters — would agree it’s larger than this.

CoinGecko is dodging the difficulty by not assigning a market cap in any respect. I have to admit that as a result of HEX OA possession is obscure, I’ve additionally needed to keep away from having to make a dedication about HEX provide.

Q: Isn’t Market Cap Silly?

A: Sure (see Richard Coronary heart quote on the high). We agree it’s not the very best metric.

However it’s what individuals need, and it’s silly to attempt to struggle this.

In a number of cases, corporations have tried to rank cryptoassets by different metrics, and the market has rejected such approaches.

We imagine that the market will ultimately evolve previous prioritizing market cap, however we’re not there but.

Q: Isn’t Market Cap A Easy Multiplication of Provide x Worth?

“Totally diluted” (which actually means totally inflated) market cap is complete provide x value. However plain-ol’ market cap is mostly taken to be value x circulating provide.

However there are a variety of choices to be made right here, like “how a lot quantity is required to ascertain a value (does $10 of buying and selling exercise rely)?”

On the very high of this text, we clarify why market caps decided by simple arithmetic — and no worth judgements — end in rankings that individuals don’t belief.

Which is why we method crypto knowledge from largely unregulated exchanges like a spam drawback.  Certainly, it’s our understanding that most individuals view market capitalization rankings as a proxy for the relevance/affect of crypto property (and alternate quantity as a proxy for relevance/affect of crypto exchanges).  And in a way just like Google/web optimization spam, many tasks attempt to hack these rankings.

  • Exchanges attempt to hack their rating by faking quantity
  • Crypto tasks attempt to hack their market cap by issuing untradable provide (that will increase market cap through the cap = value * provide equation) and manipulating value

Which is why we modulate alternate rankings and alternate markets with our affect rating, and we take motion on mission possession outliers (i.e. conditions when the overwhelming majority of an asset is untradeable and unavailable to rely towards value discovery, but counting in direction of market cap).

Q: Why Are You Altering The Hex Circulating Provide?


This tweet above is directionally right. 

Actually, in keeping with probably the most thorough reporting we will discover on HEX provide (i.e. the Hex Audit Telegram group and this spreadsheet), 11.81% of HEX is owned by customers.

In response to the methodology that we apply to all property issued on Good Contract platforms (see the questions talked about within the intro), we’ve got determined to not rely OA Possession as circulating.

Q: The OA Tokens *Can* Be Moved And Staked… Why Don’t You Think about Them Circulating?

The OA tokens have by no means been bought (and they don’t behave like property in circulation). Furthermore, they’re excluded by our methodology.

For tokens issued on good contract platforms (i.e. ERC-20 or BEP-20 tokens) we don’t rely property as circulating if they’re in

  • Wallets held by the mission proprietor and workforce members
  • Wallets designated for improvement, advertising, airdrops, giveaways
  • Burn wallets
  • Deployers
  • Another pockets that’s locked or non-circulating for an additional cause
  • Wallets hard-coded into the asset smartcontract to obtain token distributions

We agree that these property *can* be bought… however they by no means have been, and in keeping with our methodology (which we apply throughout the board), so long as they’re mission managed, we contemplate them to not be in circulation.

Q: So Circulating Provide Is Subjective?

Sure.  Completely.

There isn’t a generally accepted on-chain normal for deriving circulating.  Even Etherscan (which is seen as neutral) has HEX’s market cap under USDC.

Relating to provide, there are actually judgement calls to make. For instance…

  • If a mission points 100 tokens, and retains 90 of them inside it’s treasury, and distributes the opposite 10, ought to spot value of the ten property be used to cost the remaining tokens?
  • Ought to founder held tokens be thought-about circulating?
  • Ought to project-held tokens be thought-about circulating?
  • Ought to property despatched to a burn handle be thought-about circulating?
  • Ought to POW tokens acquired throughout a pre-mine be thought-about circulating?
  • Ought to misplaced cryptoassets, or cryptoassets belonging to deceased people be circulating?
  • Ought to time-locked liquidity be thought-about circulating?
  • If an asset hasn’t moved in 10 years, is it circulating?

As you may see, it may be troublesome (if not inconceivable) to reach at an on-chain approach to persistently decide what’s circulating and what isn’t.

In response to our methodology, HEX’s OA tokens won’t be counted as circulating. On the time of writing, these tokens account for 88.19% of issued provide.

Q: What Is the HEX OA?

The HEX OA, or “Originating Handle,” is an handle named by the HEX token contract because the receiver of HEX tokens primarily based on sure contract interactions, resembling penalties from cancelled stakes. Moreover, we contemplate addresses whose sole exercise has been to obtain tokens from the OA to even be a part of the OA community. For extra info see the HEX Audit Telegram and spreadsheet.

Q: If Tim Prepare dinner Is Awarded Shares by Apple – They Are Added to Circulating Provide. They Are No Longer in Management of the Firm. By Nomics Making a Differentiation and Combining Founders + Firm/Venture Tokens, You Could Be Eradicating Transparency As It Doesn’t Assist A Consumer Perceive If The House owners Can Dump

Typically talking, by the point an organization goes public (not less than in the US), you don’t see founders with controlling or majority possession of an organization.

For instance…

  • Jeff Bezos owns about 10% of Amazon
  • Zuck owns about 14% of FB

In crypto, you may see founders proudly owning 80%, 90%, or extra. And behaving equally to how corporations behave with inventory it controls.

There are sufficient cases the place founder tokens are extra qualitatively just like mission tokens — than they’re just like founder shares of a public firm — to make excluding them a crucial step to cleansing up the highest market cap listing.

Q: This All Sounds Very Imprecise, Error-Inclined, and Subjective

It completely is. Sure. Very imperfect and with flaws.

Q: Are You Saying That You’ve Been Incorrectly Inflating the HEX Market Cap Previous to Now?

We’re saying that we’ve got not been internally constant.  We now have not utilized the identical requirements to HEX’s circulating provide as we’ve utilized to different ERC-20 and BEP-20 tokens, and now we’re taking steps to regulate this.

There’s loads to grasp about HEX possession.

We didn’t perceive HEX very effectively earlier than and due to this fact counted nearly all issued HEX tokens as circulating, which isn’t in step with how we deal with different property issued on good contract platforms.

Q: When Including Circulating Provide to Nomics, You Require Tasks to Disclose Venture Addresses, Handle of House owners, Burns Wallets, Deployers, Different Wallets with Non-Circulating Property, and Wallets Onerous-Coded Into the Good Contract to Obtain Distribution. What Occurs If The Venture Doesn’t Disclose This Info?

If a mission is small (i.e. not high 50) and property have been issued by smart-contract creator that doesn’t disclose possession publicly or reply to our questions, they typically don’t obtain a circulating provide worth on Nomics.

For bigger tasks — the place property are issued by a smart-contract creator who doesn’t reply our questions — we make our personal judgements, which err on the conservative aspect (i.e. on the aspect of decrease circulating provide).

With HEX, we’ve been unable to have a dialog with the nameless proprietor of the OA, so we’ve leaned on the HEX audit and our personal investigations, which have come to the identical conclusions because the HEX audit.

Q: If the OA Had Completely different Figures and Had been Keen to Interact With You to Replace the Circulating Provide Quantity, Would You Interact With Them?

100%. Sure. Completely. We perceive that they wish to keep nameless. Maybe they’ll e-mail [email protected] with a protonmail handle or one thing related? We’d like to have a dialogue with them.

Q: What About Satoshi’s Cash? What About Misplaced Bitcoins? What About ETH Owned by Vitalik?

It is a nice level.

We’re extra more likely to take motion…

  • When an asset enters the highest 10 (however particularly the highest 5)
  • When there’s a founder/mission possession outlier (i.e. after we imagine founder/mission possession is over 50%)
  • When a mission is newer and property have been programmed into existence by good contracts (i.e. the place we see a lot of the rug pulls & market manipulation shenanigans occurring)
  • When a small set of addresses have the power to empty all liquidity a number of occasions over (the most important cause we dig in to a circulating provide declare is when a number of high addresses are unexplained and maintain extra property than exchanges — and liquidity swimming pools do — as a result of this usually means one particular person might rugpull the entire thing).

In different phrases, as a result of this can be a time-intensive, subjective, and handbook course of (with automated monitoring), we solely have the bandwidth for prime ranges of scrutiny for prime market cap property which can be outliers with reference to founder/mission possession.

Q: If the OA Owned 5% or 10% Would You Be Making This Transfer?

There’s an excellent likelihood that with solely 5% or 10% (and even 25%) OA possession, we would not discover.

Q: Why Are You So Targeted on HEX?

Previous to this adjustment, we ranked HEX at #3 (a better — or equal — rank than every other main market cap websites for this asset).

A excessive proportion of help questions we get (together with from HEXicans) principally ask “why does CoinMarketCap and/or CoinGecko say X Whereas Nomics Says Y.”

So we’ve been asking questions on HEX … as a result of we’re continuously requested about it. And we wanted info essential to defend our place or rethink it.

Primarily, the trouble to intelligently reply to the inquirenes we acquired prompted us to ask questions on HEX.

Q: So If You Get A Lot Of Questions About An Asset, You Study It Nearer?

Yes Chad Meme Notebook: Journal for Kids, Teens, Gamers (6 x 9 in.): Inc.,  Meme Notebooks: 9798675022533: Amazon.com: Books

Q: What About Venture X? I Imagine Possession There’s Additionally Centralized However You’re Not Taking Motion? Why Not?

Most likely as a result of we don’t learn about it. Please ship a help ticket to [email protected] and we’ll do our greatest.


I want there have been a one-sized-fits all neutral (and spam-proof) methodology for market cap that wasn’t topic to manipulation. However so far as we all know, that doesn’t exist proper now.

I imagine that sometime Nomics.com, and the business as a complete, will transfer in direction of rating by proprietary “affect scores” that issue datapoints from a wide range of sources (i.e. social media mentions, web site site visitors, locked liquidity, on-chain exercise) to find out the significance of a mission … very like Google rankings.

In case you have questions, feedback, or criticisms, I invite you to go away them within the feedback part under.  Please be affected person whereas we try and reply your questions (give me 24 enterprise hours per query).  We acknowledge upfront that you simply might need difficult questions that we can’t reply; these questions/feedback will push us and the business to evolve.

Clay Collins (CEO of Nomics)


Please enter your comment!
Please enter your name here