I opened a protocol PR: scale DHF payouts when HBD printing is suppressed
I opened a small protocol-level PR for Hive.
PR: https://github.com/openhive-network/hive/pull/48
Proposal: https://peakd.com/me/proposals/381
The idea is simple:
If Hive’s own protocol is already suppressing HBD printing because of debt stress, then DHF proposal payouts should not continue at full speed. The suppression should apply for everyone.
Hive already has a consensus field called hbd_print_rate. When the chain gets closer to HBD debt stress, this field suppresses HBD printing. My PR applies that same signal to DHF proposal payouts.
If hbd_print_rate is 100%, DHF proposal payouts behave normally.
If hbd_print_rate is 50%, DHF proposal payouts are 50%.
If hbd_print_rate is 0%, DHF proposal payouts are 0%.
Unpaid HBD stays in the treasury.
Why I opened this PR
It does not fix Hive. It does not pretend to fix Hive. It does not redesign governance. It does not punish named accounts. It does not touch user balances. It does not claw back money. It does not freeze anyone's wallet.
It only says that discretionary DHF outflows should be tied to the same HBD stress signal the protocol already uses elsewhere to everyone else.
If HBD printing is being suppressed, DHF proposal payouts should be suppressed too.
We can not have first class and second class citizens
First, having two tokens minted separately add a vulnerability in the DPoS. Technically whoever has the most stake is incentivized to maintain the value of the stake. This is the basis of trust in and PoS chain and should be the same on a DPoS chain.
Because Hive has HBD those incentives are warped. Someone with a large enough stake on the governance token may not care for the value of the governance token because they can still have financial gains on the other token.
The DHF introduces first and second class citizens. The first class citizens have contacts and large enough power to mint their own stablecoin. The second class citizens do not.
That is deeply unfair. If the stablecoin emission is halted for the second class citizens it should be halted or scaled similarly for the first class citizens.
This effectively reduces, but does not mitigate, the flaw in our dual currency economy. Now users with a large stake in the governance token do not have a back door to print a stablecoin while everyone else has their stablecoin yields halted.
This is not “cut everything forever”
This PR does not abolish the DHF. It simply makes the DHF beneficiaries adhere to the rules everyone else adheres to.
Why use hbd_print_rate?
Because it already exists.
When Hive says HBD printing should be suppressed, with this change DHF proposal payouts are suppressed by the same factor.
What this PR does not have
I am not a protocol developer. This PR is missing tests.
I aimed for the smallest code change possible to make the intent clear. The code change is small, direct and simple, but it misses testing.
Testing is valuable and probably the most difficult and important part of Hive core development. I myself do not have the computing resources to test it on a local devnet and apply it under stress and I am not a C++ dev, I could use AI to write tests but the code diff would be huge and the tests would possibly be flawed and/or redundant.
Still with tests written I would not have the resources to run and actually test because the software is heavy and running multiple machines and testing the consensus is computationally expensive.
Why this matters even if it is rejected
This is a PR, a PR is a code proposal, if it is rejected I expect at least an explanation. I am posting about it to gauge public opinion and raise awareness.
They should explain why discretionary DHF proposal payouts deserve to continue normally while the protocol is suppressing HBD printing. Why we should have two different class of citizens and why one of them deserves printing rights.
They should explain why the burden of debt stress should fall on holders, buyers and HBD users, but not on proposal receivers.
They should explain why the chain can be close to the haircut and still treat treasury outflows like public financing as usual, like a tax on the buyers distributing to the receivers.
That is already a useful discussion.
My position
Hive already has an HBD stress signal.
I am asking whether DHF payouts should obey it.
If the answer is no, then say no publicly and explain why.
If the answer is yes, then review the PR and contribute to it, since I know it lacks testing.
But do not pretend there is no protocol-level action possible.
There is.
I opened one.
Signal
Type: news | Authentic: authentic | Importance: urgent
Topic: Governance in Hive, HBD debt control, the role of the hbd_print_rate in crises, and equity in the financing of DHF proposals.
Tags: #hivegovernance #dhf #hbd #blockchaineconomy #hivecrypto #decentralization #smartcontracts #cryptodebate
Claim: The proposal requires that DHF proposal payments be reduced proportionally to the hbd_print_rate when the network experiences debt stress
Stance: support
00:01 — A protocol extraction request is opened: escalate DHF payments when HBD printing is suppressed.
Why it matters: This post is of utmost importance to the Hive community because, according to the author, it protects Hive's economy in crisis, prevents large whales from abusing the treasure, and forces witnesses to engage in a crucial public debate.
Posted via First Context
I have to applaud your passion as of late, Igor. I mean, I know you've been around for a while, and I doubt it's anything new per se, but the decibels have certainly increased.
I think your idea is more than reasonable. It seems somewhat logical, even organic, if such a word can be used. That said, I know precisely the pushback you will receive, but I don't think it's the best defense for the current status quo.
More than a year ago, Matt and I were having a little brainstorming session of precisely this nature. We discussed the disconnection, if you will, between the chain's market cap and its outflows, and how dangerous that can be for our economic health. A lot of ideas came up. Among them was the ability to downvote proposals directly (not just the return proposal), which I still support. We also floated the notion of payouts being made in Hive instead of HBD.
I brought this up to Blocktrades as well. It was either on Hive Thrive or during a core dev meeting, and I was told why "it's not a good idea." BitShares was cited as the experiment that proved a stable token was necessary for the developer honey trap to work. I granted the point, and I still understand what they mean by it, but I also think there's a limit to how far that argument can be stretched.
Warren Buffett once shared his formula for making sure the American economy never sees red again. He simply said that if GDP wasn't doing well, then all senators should become unelectable. He laughed, but I have no doubt it would work.
Your idea is built on similar principles. If we've wrecked the economy of the chain, then it only makes sense that we shouldn't be able to continue doing so at a protocol level. Under such conditions, the funding of any initiative would become ineligible.
A real test is being put forth, and not only by you. The community has shifted its views and no longer blindly accepts the message of, "Don't worry, it's just the market. Things will turn around."
If the large stakeholders oppose this idea, and others like it, it's not unreasonable to ask for a response. After all, it's not as though your intentions, or my intentions, are malicious.
Cheers.
Appreciate.
My idea is much less radical than it sounds and less bold than anything I have read. It just applies the same economic logic that exists in the consensus to the DHF.
it is not extraordinary. It is just coherence and simplicity.
oi cara... sim voce ta no discord, ne? seria bom nos te ter no show a semana que vem.
Estou no discord da Ecency, 3Speak e alguns outros, procura lá e manda mensagem
Great idea! why wasnt this proposed earlier. credit to you sir!
Very reasonable, also reducing the debt rate from 30% back to 10% or even 5% would make the dual token economy more robust. Hbd_print_rate should also halt HBD savings interest payouts.
I totally agree. I think it is not fit for this PR because the goal here is to fix what I consider a consensus-level backdoor, where holders of the governance token can print a stablecoin while their stake devalue.
The HBD savings interest payout is a dissonance that should be fixed but that is not in the realm of a backdoor because everyone has the same savings, it is incoherent, but not a governance backdoor.
This PR is urgent because it addresses a consensus and a DPoS-level backdoor.
I think this is a really good idea.
Conceptionally it seems fair, transparent and balanced for all.
(I THINK I WAS WRONG TO QUICKLY REACH THIS JUDGEMENT)
I am not sure how it will work in practice.
For those who disagree, can they let it run for let's say 3 months trial period? This is only for those who say it's a bad idea. It it really is a bad idea, can we implement it for testing period if possible?
You, me and most of commenters intentions r clear... We want what's best for hive. It's not against anyone, it's just that we want serious investors in hive to make it thrive more.
Magi, was absolutely a beast DHF supported so far. Although funding amount can be questionable. And ecency, there onboarding experience, playstore availability etc r amazing too.
I get you. I do not want Peakd, Ecency, Keychain and other defunded, but the same rules should apply for everyone because the DHF as it is looks more like a backdoor, it undermines our PoS incentives and trust.
All Hive economy should aim to avoid
hbd_print_ratereaching zero because I think no one wants defunding, but the mechanism should be coherent to its goal itself.!BBH
Thanks for staying active. Your GLD activity distribution of 0.0117 GLS has been sent.
100% agree. Supported.
Great idea! How did no one think of this before :)
Core development is scary. Social acceptance is even scarier.
Edit: plus before I did it I myself thought "nah this is too obvious, not worth doing because surely someone has considered and didn't do". Hiveans should have the courage to be redundant and risk failing.
The silence of the 'disinterested parties' is deafening
And the official account hasn't posted on Twitter in over a month.
Perhaps they're in a state of depression-induced paralysis.
Bacana, com certeza tem o meu apoio e de muitas outras pessoas da comunidade brasileira! Manda ver, implementa isso ai e vamos reduzir esse DHF pelo amor de Deus kkkk
Mais do que reduzir o DHF é corrigir um backdoor na governança da Hive que permitia holders do token de governança imprimirem stablecoins.
Em um protocolo PoS ou DPoS a governança é incentivada a querer valorizar seu stake, se eles tomam más decisões o stake desvaloria. Porém se os holders do stake podem imprimir uma stablecoin isso é um backdoor pois permite eles ganharem algo independente do stake, sendo efetivamente um backdoor, uma falha de governança.
Caramba, parece ser pior do que imaginava ser, espero que realmente esse possa ser o primeiro passo de uma grane mudança
Precisamos de muita coordenação e divulgação. Há muito suporte mas não é suficiente pra chegar perto do mínimo necessário pro consenso.
Vou fazer o possível para divulgar mais e chamar o pessoal para dar uma olhada na ideia e proposta! Juntos vamos melhorar e sair dessa situação complicada
!BBH
Thanks for staying active. Your GLD activity distribution of 0.0103 GLS has been sent.
!BBH
Thanks for staying active. Your GLD activity distribution of 0.0069 GLS has been sent.
I'm looking at this as an accountant, not from a crypto protocol angle.
To me it is simple. The total market cap of Hive plus HBD (based on Coin Gecko figures) is around $57 million, down from close to $200 million in 2021.
Excluding the HBD stabiliser, the DHF is currently funded to the tune of 2300 HBD per day (and was much higher).
That means that however the market cap changes due to HIVE price changes, we are draining $839,500 out of the value of the ecosystem every year. That's around 1.4%.
It may not sound like much, but it's cold hard cash. Unless the proposals it is paying are delivering fresh new market cap in the form of new Hivers buying tokens, it is not worth it. But most proposals have no business case, or a business case that is very woolly on the financial angle. I have seen very, very few indeed that create a revenue stream and offer to repay the investment.
Additionally, we are draining market cap out in the form of witness payments. That is necessary, because with no witness nodes then the claims of permanency disappear. If Hive shrinks, witnesses will give up so to a certain extent we have natural scaling. But again, it's cold hard cash being drained out, and for both witnesses and DHF proposals the vast majority is (understandably) extracted rather than re-invested.
So I support this proposal because at the rate we are losing market cap, things are not currently sustainable. It would be a shame if the awesome potential of Hive (which some people are continuing to develop without pulling DHF funds) was lost because a few people keep draining cash out rather than tightening their belts to match the reality.
The DHF should only fund core security work at this stage, anything else should be in the form of a securitised loan based on a very rigorously examined financial business case.
Greetings, friend. I'm reading your proposal, and although I'm just a regular user without much knowledge about DHF or what you're mentioning, I'm genuinely concerned. I come from a country where leaders govern without considering the opinions of others, and I'd like to think Hive is different. I know you, like many others, are worried; I am too, because I see the currency devaluing and I don't see this problem being resolved. I would like those responsible for this project to offer alternatives or solutions. It's very sad to see this situation. I hope a solution is found very soon.
Posted via First Context
Your leaders and our leaders are humans and humans have all varieties of moral values
Just to confirm, how does hbd_print_rate work?
Is it:
100% if Debt is below 20%
50% if Debt is above 20%
0% if Debt is above 30%
?
Article with a much better explanation:
https://peakd.com/hbd/@arcange/hive-debt-ratio-and-haircut-rule
But in short:
HBD print rate = 100% * (10 - debt ratio)
At 10% the print rate is zero based on that formula
Oh this is great info, thanks!
I support this. DHF needs to evolve it's way too beuracratic...
it s a good idea could work and hive will keep working without problems :D
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STOP@blocktrades,
You keep saying stakeholders can stop DHF spending. As one of the largest stakeholders, would you personally support reducing or suspending DHF payouts when hbd_print_rate approaches zero? If not, then the issue isn't that stakeholders can stop it. The issue is that the dominant stakeholders don't want to.
Or better yet, don't answer that, instead let's just cut straight into the meat and potatoes.
Let us assume HBD debt stress becomes severe enough that hbd_print_rate reaches 0%.
At that point the protocol has determined that normal HBD creation should be suppressed.
My question is simple:
Why should DHF HBD payouts continue at 100% under the exact same conditions?
Note: I'm not asking who controls them.
Note: I'm not asking whether stakeholders can vote differently.
Note: I'm not asking whether stake-weighted governance is good or bad.
I'm only asking about the economic mechanism itself.
What is the economic rationale for having one HBD issuance path obey the debt-stress signal while another HBD issuance path ignores it?
What specific problem would be created by applying hbd_print_rate proportionally to the DHF payouts as well?
The author of this article has confused the entire purpose of the hbd_print_rate and essentially hijacked it, claiming it had a different purpose that somehow got missed for the DHF. If you're interested in the details of what the hbd_print_rate actually does, you can read more about it in @andablackwidow post below.
But to the basic point without the details: the hbd_print_rate doesn't change the amount of rewards that are given for posts. It only changes the currency used. Somehow that's now being conflated as "DHF payments should be cut whenever post payments are paid in Hive instead of HBD". The argument makes no sense, IMO.
So if we wanted to change the behavior of the DHF to match the way it works for posts, the change would be to pay in terms of Hive instead of HBD. I think it has been suggested before. But IMO, this would not have any major impact one way or the other, practically speaking.
I will analyze everything you have given and make a detailed post about it, hopefully within 72 hrs. Thank you for answering. I'm noting everything down. I may have follow up questions later.
Having reviewed the sourcecode, I want to clarify a crossed wire that seems to be running through this discussion.
Igor's PR modifies transfer_payments() — the function that sends HBD from treasury to proposal receivers. It takes the hbd_print_rate signal and applies it to the payout amount itself:
period_pay.amount = period_pay.amount × hbd_print_rate / 100%
It does not touch the inflation funding side at all. Inflation still creates HBD and allocates it to the treasury at whatever rate the existing hbd_print_rate logic dictates. The change is purely on the payout side.
This matters because of how the protocol treats treasury HBD. Since HF24, the code explicitly subtracts treasury HBD from the debt ratio calculation (line 2855 of database.cpp: hbd_supply -= get_treasury().get_hbd_balance()). Treasury HBD is quarantined - it doesn't affect the debt ratio, doesn't create sell pressure and doesn't impact market cap. The payout is the event where inert HBD becomes liquid, sellable and debt-ratio-relevant.
So Igor's position, as I read it, is: the hbd_print_rate already functions as an emergency stress signal — "the HBD situation is abnormal." If that signal is firing, discretionary treasury outflows should not continue at full speed while the rest of the economy is under restriction. It's about ensuring the stress signal applies consistently to all HBD outflow paths, rather than carving out an exemption for the one path controlled by stake.
Without it, there's no mechanism preventing a feedback loop: payouts increase circulating HBD → debt ratio rises → hbd_print_rate suppresses ordinary HBD creation → but DHF payouts continue unabated → more circulating HBD → repeat.
Note: For almost all of my time on Steem/Hive I was under the impression that the DHF fund was part of the market cap that is calculated and visible publicly on sites like CMC - turns out that was wrong - so all my historic DHF voting was on the premise that I was 'unlocking' some pre-existing wealth that was already visible in the market cap for use in development, but in reality I was diluting the market cap.
I welcome all feedback and corrections!
I don't think there's a crossed wire about the proposal mechanism itself. It was obvious in the original proposal that it was a mechanism to cut DHF spending. It's the justification that was used that made no sense, IMO.
The post suggests that the hbd_print_rate was made to reduce spending, but that a backdoor (or loophole) was left that caused it not to reduce spending for the DHF. But this is strictly not true: the hbd_print_rate does not reduce spending, nor was it intended to do so. It just switches payments for posts from HBD to Hive (the posts continue to receive the same value).
And I completely disagree with the concept of cutting pay in the manner suggested. It cuts across all proposals without differentiating between the different things being funded.
For example, it would equally cut across a single person who was primarily doing the work out of idealism but can afford to take a pay cut, a group of programmers who are paid by such a person (who will not willing take such a pay cut, but will simply find other work), and a proposal like the HBD stabilizer which generally speaking earns money for the DHF
The only way to adjust for this arbitrary cut in pay would then be to create and vote on more proposals to make reasonable adjustments. But this shows the basic uselessness of the proposed change: the same effect of the proposal can be done already simply by unfunding current proposals and voting in ones that pay more or less.
The only time the proposal is uniquely effective is when the rate is dropping down to near zero, at which point it becomes impossible to pay for anything, no matter what stakeholders want to do (short of yet another hardfork to eliminate or workaround it). But hardforks are one of the most costly and risky means of making adjustments and they are also more time-consuming to enact.
That is the circuit breaker you have.
I am proposing a circuit breaker that kicks in before zero and is programatically predictable.
You propose people to buy HIVE and unite to defund proposals, that creates social chaos because it generates disagreements. Having a programatic features to defund makes it predictable and no one has to argue and fight against projects they use and love but know they can't afford.
I wrote a lot here and deleted. I am tired, boss.
Your point on
hbd_print_rateis technically true. Not worth going over again why economically it is nonse due to the DHF, which BTW has value, it is just unnafordable in current market conditions in any token it could pay.I have read the post and the different points of view expressed in the comments.
I like to look at as many different varying thoughts as possible before I attempt to come to some conclusion. I appreciate everyone's input. I'll check back again later and see what's new here.
Thanks and have a nice day!
mi apoyo joven👍
I think a clear public explanation may be more important than the final vote result itself.
@igormuba, me interesó lo que compartiste sobre "opened protocol scale". Gracias!
I never cease to be amazed by the number of people that think protocols should be changed the moment they don't personally like the results.
The existing stake-based voting system is the core design principle of Hive. It perfectly allows for a complete cessation of all DHF spending: voters just need to stop voting for proposals.
But apparently the will of the voters isn't enough. Instead, we should add new rules that overrule the previous rules because someone isn't happy with the spend level.
I understand your concern, but the consequence of this would be the largest holders are disenfranchised of the rights they paid for because you don't like the existing rules any more.
Note, the existing rules do allow you to have more say: buy more Hive and you can vote up the return proposal. This isn't about 1st and 2nd class citizens: it's a stake-weight system "by design". Anyone can buy more stake if they want more influence (or sell it if they want less).
Note: I'm not even that much in favor of stake-weighted systems in general, although its pretty easy to understand why Hive has one (prevention of sybil attacks being one of the reasons). My primary other project is in fact completely reverse in design: equal weighted voting per person. But changing the rules of an existing system is completely different from designing a new one.
Lol. Ok. To have any meaningful say (counteract your vote) means buying at least something like 10-15 million hive while making a bunch of hive leeches (that got a huge stake for free just by being lucky) rich in the process.
Maybe when hive hits below cent prices for the lulz. Till then, your big stake and your retarded dhf voting act as a huge deterrent for buying hive for anyone with more than one working brain cell.
Your stupid dhf voting has given away millions and millions of hive to stuff that did absolutely nothing other than killing price. Btw, I clearly remember you saying years ago
Something along that lines. Yeah, good luck with that now. L-O-L
And let's not forget. If someone does buy a shit ton of hive and you don't like him, then it's absolutely ok to "change the protocols" to kick him out. Just saying :)
Thanks for answering. Now We already know that you are the principal issue of Hive, because you are the part of the few people that gets the revenue, and think Hive is a personal cash maker. Did you bought the tokens or are you part of the ninja miners from Steem era? Maybe someone should advice to the FBI about this money laundering.
For the past few years, I've spent far more on Hive than I've made off Hive. It always pays to check your assumptions before you sound off on them.
So, are you an idiot burning your own money till destroying your own investing giving away money to friends and girlfriends and not contributives projects? Why don't you use your HP to go to a casino and lost only your own money and not others money.
So far, I think the dumbest thing I've done today is to try to talk rationally to someone who starts a discussion by randomly guessing at the truth without a shred of research. Still the cost is low, so I figured it was worth a try. I read one of your posts and thought you weren't a totally unreasonable person, but maybe just slightly misguided. Your second reply convinces me, however that there is no hope of a useful discussion in your case.
Well Blocktrades is the Builder of hive, he pretty much runs the show. Blaming him for voting on DAO is retarded. He is a good guy.
Well, his DAO voting patterns are retarded.
Ok, I read it and I have to side with you on this one blocktrades LOL
That was funny (because it was unexpected) in the midst of a lot of serious discussions though
Thanks, I'm glad we're not in disagreement on everything :-) Anyways, I think the more we keep the tone of our discussions respectful, the more likely we'll have useful outcomes.
Well adjusting rules is not bad and try to become more efficent. DAO itself is a cool thing but should less work in the manner of "building stuff nobody wants".
Risk capital should be rewarding and for this it needs to spread pain if it fails. Best case it doesnt come from a "government" like structure and from private pockets.
So it needs some " plan" to execute. I know you are the backbone of hive and i respect this a lot. But to get more "backbones" and make the chain stronger, i think some things have to change and rotate more to a funding based app finance with a token as exchange. Risk gives rewards, VC hating doesnt move anything.
Most of the software funded by DAO vanished or was waste. And i would be not surprised if magi fails.