This document serves as a reference for the DHF proposal that links here, going over the idea and any updates made in the future.
Creation date: 2021-02-17
Latest revision date: 2021-02-21
Proposal direct link: https://peakd.com/proposals/157
The Idea
The idea for this proposal is fairly simple: Bring value extracted from the ethereum ecosystem to the Hive ecosystem by supporting the price of the HIVE token.
The Proposal
The proposal is to fund an account with 1000 HBD per day for up to 90 days.
- The HBD are then exchanged for ERC20 stable coins.
- The ERC20 stable coins are staked on ethereum defi platforms (e.g. Curve, Swerve, or similar) in order to obtain a yield.
- The yield is then used to purchase HIVE on the open market.
- The HIVE is then burned.
In this way, the HIVE token will capture value extracted from the ethereum ecosystem.
Any code developed in support for this proposal will be open-source.
All transactions will be posted on Hive for transparency purposes.
FAQ
Q: Who will have the keys?
A: I'm open to community suggestion. Off the top of my head, I would think giving the keys to @blocktrades and @yabapmatt would be sufficient.
Q: Where will you buy the HIVE?
A: On binance. There are two reasons for this.
One, it's one of the most liquid markets for HIVE and doesn't have the wallet maintenance issues like we have seen on Bittrex.
Two, more importantly, by buying HIVE and then taking that HIVE off the exchange, we will be squeezing the short sellers in Binance's HIVE futures market. Over time, this should create additional price support for HIVE as it becomes more expensive to short.
Q: How will this be decentralized?
A: This is a difficult project to decentralize since it involves multiple chains and a private platform (Binance). One Hive user suggested sharing the keys with a number of top witnesses. I'm fine with that solution and open to other suggestions.
Q: Won't this hurt the price of HBD?
A: It's possible there will be a market effect. HBD is intended to be used though. I'm not too concerned about additional supply hitting the markets. Still, if anyone wants to enter an off-market exchange of ERC20 stable coins for HBD, I'm open to that. Such an arrangement would mitigate any market effects.
Q: What do you get out of this?
A: Aside from a higher HIVE price? I'll be taking 1% of the yield as a management fee. I will not be taking any fees from the DHF HBD payouts.
Q: What happens when all this is over?
A: The staking platforms on ethereum show no signs of abating. This setup should last almost indefinitely. If, for some reason, market conditions change drastically and it's no longer worth continuing this form of price support the ERC20 stable coins will be unstaked, HIVE will be purchased on the open market, and that HIVE will be burned.
If I have to trust somebody in this chain to do this, you are one of the few I will trust.
Let's go!
I appreciate your support!
I agree with this sentiment!
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Imagen how much hive can be burned with a 1M HBD (USDT, USDC, DAI... ) making yield :)
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Baby steps :).
Effectively, I think this sort of setup should be what the return proposal does.
This is genius 😂
How long would it take to generate in yield the invested amount (conservative estimate, assuming everything is invested day 1)?
Current defi yields are very high, 50-100% per year. If market conditions maintain that, a year or two will see 90k USD worth of HIVE burned.
Aka ~250K - 300K HIVE?
Maybe we should fund that account with 3K or 4K HBD per day...
Burn iiiiiit
Voted the proposal. Can't see too many downsides right now, especially since HBD is trading at more than 1$
We are fully supporting this proposal ! Let,s go !
Thank you for the support!
Damn this is a great idea. Pity this won't get noticed but here to hoping it does :P
Would also go well with @taskmaster4450 idea of the DHF being used to refill itself :P
Thank you. Just spread the word and we'll see where we end up. Maybe on the moon ;)
I like the proposal and since HBD would be sold it would probably help to maintain the peg at $1.
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That's true too.
I'm in! let's gooooooooooooooooooooooooooooooooo!!!!!!!!!!!!!
I know almost nothing about this kind of stuff, but it does sound like an interesting way to support the price of hive, and go after the short sellers at the same time.
About the short sellers, I've been trying to long hive on binance but margin trading is disabled. Am I missing something?
Huobi however works fine, and the limits are higher too.
Don't know. I don't trade HIVE futures. I do tend to agree with the people who think that having HIVE futures at all is very suspicious and is probably being using to suppress the price of HIVE.
looking on coingecko, I see that gate.io has hive listed as a perpetual contract, with a volume of $26. That's nothing.
No other futures in sight. So again, not too sure what you are talking about. If someone talked to you about futures could you tell me who, I'm interested.
Margin trading is not futures. Margin gives the ability to borrow but then you buy on spot.
Ah, you are correct. It's a 5x margin market, not a futures market.
Mechanics are the same for our purposes though.
You thought about doing this on that Binance chain to avoid the high gas fees from ETH? I guess as long as you are burning it all it doesn't really matter. You might get more bang for your buck if you do BNC or whatever it is as opposed to ETH. I'm just an amateur though, so I trust your judgement.
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If you do it even large amounts, Eth is far more worth it.
I wouldn't know. I only have small amounts. It was just a thought.
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I've looked at BSC a little bit. Not paying ethereum gas is attractive.
But I have not found any pools on BSC that offer stable-stable pairs like there is on ethereum. Since the goal is long term yield to provide a continuous price support for HIVE, I like stable-stable pairs because the position is protected from market swings.
In a more speculative pool (on ethereum or BSC) maybe things work out well and the pool allows us to buy & burn more HIVE. But maybe not.
Stable-stable pairs are much more... well... stable.
That makes a lot of sense. Thanks for the great reply. I figured you had looked into it already, I was just curious.
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Interesting idea.
The only thing I wonder are the taxes. I assume the Binance account will have to be held in someone name?
Would be cool if this grew over time to cover a decent chunk of the slowly shrinking inflation of the reward pool.
It's a wash tax wise. Income from DeFi -> Hive is burned as worthless stock.
I'll take care of that side no problem
I’m in
This is concerning. Really.
To sum up:
You want to bet with Hive's money.
Don't take it personally, but even though economics is reasonable, you can still say bye bye with all the money. Or use them differently. It already happened here before and the community was powerless.
The idea is much better than funding a customer support remuneration xD
Which exactly? you able to determine which pools/farm options are you going to use? I guess it's important because the possible yeald differs from platform to platform.
I voted ✅ for the proposal because I think we need to bring some of the @leofinance attitude towards hive general ecosystem.
P. S. Do you have @khaleelkazi support for it? It would be beneficial
I'd call it investing to obtain a yield instead of betting, personally.
And yes, I could run off with the money. So could the witnesses who will have the same keys.
More generally, any approved DHF proposal is HBD out the door. There are no controls whatsoever. I see people complaining constantly about some of the approved proposals not returning much in the way of value to Hive. That's how the system is built though.
In all likelihood, it'll be the USDN pool on Curve. That has the highest yield for stable coins that I'm aware of currently.
And yes, khal is onboard. @steem.leo has already voted for the proposal.
That's all I need to know
I voted you but I don't see a link above
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Awesome. How about transferring a part of funds back to DHF?
Also is the proposal live? can you please share the link to vote?
Added the link. It's proposal 157.
The proposal is live for voting. The funding window isn't set to start until April 1.
I don't see the purpose of transferring funds back to DHF. The goal of this whole thing is to burn coins. Yields will be used to buy & burn HIVE. If the pool needs to be exited for any reason, it'll buy & burn more HIVE.
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Think about a loan system we can lock up hive for HDB.
hmmmmm sexy and then your plan.
In a pool could be millions.
While this would be a cool experiment going have to pull my support. The DHF is reaching its daily budget.
Smart,
extract value is really cool from ETH to hive.
And as long hive is over 1$ it is even more effective. 1 HDB for 1.2 DAI. nice :D
On a big scale, it can set up a nice demand for Hive and is like a community interest investment.
I really like the idea. Like a Hive community defi pool, token holders profit from it.
you have my vote :)
Did you consider returning the purchased HIVE to the DHF vs burning and if so, why did you settle on burning?
No, throwing the funds back into the DHF doesn't actually spread out the buying power to all HIVE holders.
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True, reducing supply benefits all holders. Although sending the HIVE to the DHF would effectively reimburse it and allow for funds for more projects, or even more funding for this one if it succeeds.