Coined by Hex and PulseChain cryptocurrency creator Richard Heart, ‘Heart’s Law’ says that cryptocurrencies will rise and fall alongside one another as a result of their liquidity pairing. Having observed that wBTC, ETH, and HEX move in unison based on the liquidity of their Uniswap pairs, Richard Heart suggested that LP providers in the HEX Community remove their liquidity from the ETH-HEX pair and move it to the HEX-USDC pair, resulting in HEX prices becoming de-correlated from the price movements of ETH and BTC.
Take for example the ETH-USDC and BTC-USDC price charts moving in lockstep with each other. Is it because they share the same value proposition or use case? No. It’s because, according to Heart’s Law, they are bonded by liquidity, we can see that ETH and BTC price charts are correlated.