The whale vote on the Hive DAO (the DHF)'s return proposal was a hot topic with users of the protocol over the past couple of weeks. You see, a DAO (a Decentralized Autonomous Organization) by definition does not have a central entity that controls it. So mechanisms like the return proposal, or threshold proposal are used to determine which proposals in the DHF get funded and which don't. Anything with more votes than the return proposal gets funded and anything with less votes doesn't. As you can imagine, when the return proposal gets voted on with lots of HP, it's harder for a proposal the get funding as it will need more support from stakeholders.
To be clear, anybody with a Hive account can acquire Hive Power (HP) and vote.
I'm personally a strong supporter of the return proposal as I believe no proposals deserve funding from the DHF. Most proposals that receive $HBD from the DHF convert it to HIVE, send that HIVE to an exchange and convert it to Euros, or whichever local fiat currency they need to spend. This drives the price of HIVE down.
On the other hand, projects don't do a very good job in showing how they spent the funds and also don't provide periodic results of the benefit that their proposal had on the protocol.
Well, a few weeks ago, a large HIVE POWER holder, decided to cast his vote on the return proposal, bringing the threshold to receive funding up to 60,582,295 HP, meaning only a few proposals would receive funding. Not impossible, just harder.
As expected, many users of the protocol ran to their keyboards to angrily smash those keys complaining about how this was wrong! and evidence that the Hive protocol faces "centralization issues" because a single HP holder shouldn't be able to get so many DHF proposals defunded.
I disagree.
And to explain my point, let me start with an analogy.
Imagine you’re at a family barbacue. In a centralized system, one
person —let’s say the host— brings all the food, controls who gets what, and decides when it’s served. Everyone depends on that one host. Let' call him The Soup Nazi.
Now, in a decentralized system like HIVE, there’s no single host. Instead, lots of people bring dishes to share, and everyone helps serve and keep things running.
This doesn't mean everybody has the same thing in the same amount though!
Some might show up with a huge lasagna, while others just bring a bag of chips. Some might have bigger serving spoons or better spots at the table and some might get dessert while others get none.
Decentralization means there’s no central authority calling the shots, not that everyone has equal stuff or equal influence. In the case of HIVE, the system is spread across hundreds of computers (nodes and witnesses) as well as Hive Power holders, so no single person or group can control it outright. But yeah, concentration happens: some folks own more HIVE (like early adopters or "whales") just like the bitcoin protocol where some miners have more hash power because they’ve got bigger setups. Think industrial mining rigs versus a laptop in someone's basement. That’s just the reality of how resources and incentives play out.
So, when you hear or read "decentralized," think "spread out and not owned by one boss," not "everyone’s got the same slice of the pie." It’s about reducing single points of failure and control, even if some players end up with more sway due to their investment or timing.
Disagree with a whale?
No problem. Open your wallet, head to your nearest exchange and buy some HIVE to power up and vote in the opposite direction. Bring your friends too!
It only takes 10 orcas with 50,000 HP each to outvote a 500,000 HP whale.
That's what I'm doing :)
Hehehehe... Nice to see your take on this topic, and as usual, I agree with your point of view...
This is something that people who take DHF funds can't understand. Unfortunately, most were funded thanks to 4-5 big whales' votes and 95% of Hivians being dormant and inactive (not voting at all...) If we have a higher Return Proposal, if you want funds, you will have to "animate" Hivians and do the job... Explain why it's good and if people appreciate and like it, they will vote for it! More active Hivians are more "involved" Hivians, more motivated, more incentivized, and more appreciated! Even with just a couple of hundreds of HP, your vote is important!
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Everybody's vote is important! It's also important to let people know why their vote is important. Voter apathy is a common problem in DPoS systems like HIVE. I personally think that we need to encourage as many folks as possible to grow their account to orca status and show others how and why to do the same. Every single user will benefit if we grow our stake, create value for others and protect the protocol from bleeding cheap tokens on the open market.
This is what happens with any crypto. Insiders have usually the largest footprint. Blocktrades is an OG that got millions of hive tokens and HP and has taken the community serious. Is a chance many took, but only a few actually held on to it.
For example Jeff Berwick made 10,000 SBD at one point. He could have just bought millions of HP, but he didn't. Myself made many thousands during the 2017 Bull market, but only bought 1k HP which is pretty much what I have right now.
So, descentralization doesn't mean equality, but everyone had a somewhat equal chance to become a whale once. Key goes to, are you committed enough to really invest in HP and leave it there in perpetuity?
Even a bank will offer you a credit line if you leave a good chunk of money for 90 days. HP will only give you voting power which might not reward you as much financially.
That's certainly the question, isn't it?
From an investment standpoint, I think there's still plenty of opportunity for gains to be made by picking up some HIVE. From a standpoint of adding value to the protocol we participate it, I think there's a lot of relationships that can be fostered through positive involvement and commitment. Healthy relationships turn into friendships and even business opportunities.
I fully agree with this. The protocol allows Hive to operate decentralised, but it is up to users to have enough stake to make an impact. I've been building mine for years and now I get projects asking for my vote. I make up my own mind on what deserves it. I think a fair few other people are growing their accounts, so the influence of the whales will decrease in time if people actually vote on stuff.
You're amazing! yeah, I've seen a lot of folks growing their accounts and using their stake to vote. This is the kind of users I tend to interact with the most because I believe together we are building the future of the protocol. The more middle-class citizens we have, the more distributed the influence. We need to encourage users to vote too.
Oh I'm so middle class 😃
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I understand why people are making this a huge problem. Many may not continue if they don't get paid for the improvements they make on Hive, but let's face it, some of the payouts are really high. Every Hive user can and should be able to question this and find out why they are being asked to pay. When promises are not kept, every Hive user can cancel the vote.
Some people try to make it a problem, but how users use their vote is entirely up to them. The amazing thing about decentralized systems like HIVE is that if you disagree on something, you can always acquire HIVE, power up and vote in the opposite direction. It's as simple as that.
Definitely, even though sometimes I do Power Down, my goal is to be here for years and years and always be able to do something for Hive.
Powering down some is not bad. I see you still have a lot of HP and most importantly, you're actively using it to vote on witnesses:
This is awesome!
All the time! I recently checked my witness votes and tried to use the idle ones on the right people.
Exactly what we were discussing today. Like u in my thought am just hoping with this new protocol the prize of hive should increase
Which new protocol?
About DHF funding just few proposals
Blocktrades removed his vote. Currently, the DHF return proposal is at 38,114,345.400 HP vote value.
I thought i saw some chat on discord that blocktrades voted just ecency and then he re entered his vote.?
DHF data is available to all here:
https://peakd.com/me/proposals
Ohk thanks alot let me go through it to see what is really going on
I read this and now understand the entire concept of DHF... So I'm thinking if the whole world was to be like this system which kind looks like it .. the president and the mission or which project the country will fund will be determined by who has the most money stored in the country...I hope more good projects get funded
I'm not sure I follow. Are you suggesting nation states should operate like DAOs?
Oh no Mr Alex I'm trying to say that I didn't understand DAO and DHF until I read your blog and I tried to make an analogy that of nations operated like this, it will be the rich ruling permanently
That's probably a bit outside the scope if this post and my understanding. The focus of my post is on decentralized protocols like HIVE where anybody can acquire stake to vote. Even if some concentration happens, that does not mean a single entity is in control. Anybody can buy stake, form alliances and outvote a large stakeholder.
Check out my post titled Power in numbers
oh ok let me go read that right away then 🫡