We have a lot of discussion taking place surrounding the Hive Backed Dollar (HBD) especially since the interest rate was raised to 20%. This only makes sense that a lot of excitement would be generated since we saw a massive boost to UST and LUNA. The thinking is we will be able to do something similar on Hive.
This is, naturally, bringing up some questions of the sustainability, viability, and resiliency of the network. Many feel the rate is too high, something that cannot be maintained. Others believe it is not high enough for the challenge we face. No matter where people stand, how are we going to know? This is something that we will have to navigate.
For the moment, we know that, since the distribution of HBD is so low, we are safe. The question starts to become pertinent in the future.
With all the focus upon HBD, one line of thinking is why have all the emphasis there? If we want to truly make Hive resilient, why not concentrate efforts onto the HIVE side of the equation?
If we keep the focus upon the correlation between HIVE and HBD, we can see how this also could alleviate the problem. Basically, instead of worrying about if HBD got too high, how about we put forth a discussion of how to ensure that HIVE does not get too low?
The dynamic between the two means that the market cap, in USD terms, is crucial. If HIVE has a higher price, the threat from conversions of HBD is lessened.
With this in mind, the situation with Hive Power becomes crucial. It is the foundation of the ecosystem and something we should try to build up.
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Powering up HIVE gives people utility as relating to the ecosystem. It enables:
- interaction with the chain since Hive Power equates into Resource Credits
- voting in governance issues such as Witnesses and proposals
- helping to direct the reward pool through one's voting power, earning curation rewards
Hence, we can see there are reasons to have Hive Power other than just a return. That said, a portion of inflation is directed there, providing roughly a 2.80 annual increase in Hive Power held.
The goal should obviously make holding Hive Power more attractive. If people are consistently taking liquid HIVE and powering it up, there is less floating on the market. When demand increases, this will only push prices higher if the supply is tight.
Here are a few ideas to enhance the return on Hive Power
Conversion Fee
We can charge a .25% or .5% fee on all HBD and HIVE conversions. The mechanism is a bit rough at the moment since it is acting as a security feature. Nevertheless, if we take a portion of each conversion and direct it to those holding HP, it will grow the value of those holdings. This helps to provide a greater defense.
At the same time, if someone plans on using the conversion feature to attack the network, a portion of what they are using will actually be directed to the other side.
Account Purchases
One of the challenges Hive has is with onboarding. A lack of free accounts is an issue. For this reason, there is a fee to get a Hive account. At present, it is 3 HIVE per account. This is sent to the null account, effectively burning it.
Here is another example of where the fees generated from account creation can be used to further enhance the appeal of Hive Power. We can direct that money to those holders.
Trading Fee On The Internal Exchange
Hive advertises itself as a fee-less blockchain. The reason this can be done is because the "cost" to interact with the blockchain is contained in the Resource Credit system. If one has enough Hive Power, he or she can operate as much as desired. There are no direct per transaction fees like on other blockchains.
This can remain in place. However, that does not mean the internal exchange has to be void of transaction fees. Most exchanges charge some type of fee. Here again, we could charge a minimal .25% or .5% on each transaction.
By now, you can all guess where these are sent to.
Decentralized Hive Fund (DHF)
Most of us are aware that Hive has its very own DAO. This is called the Decentralized Hive Fun (DHF). It was created during the fork using funds that original came from the ninja-mining. The main purpose is to provide ongoing funding for development.
Why not expand that to include ongoing defense of the ecosystem? Here we could take a portion of the daily payout (maybe 5%-10%) and direct it to Hive Power holders.
Early Termination Fees
Hive has the ability to create time locked assets. We see this with Hive Power and also, basically, with the Hive Savings program.
When people power up, they have to understand that the reserve is done over 13 weeks. This is a security feature for both the individual and the blockchain. It is the center of much discussion, outside the scope of this article.
One thing that some have tossed about it allowing people to get their funds quicker but only with paying a fee. So it one wants to reduce the power down time, perhaps there is a 10% or 15% "early termination fee".
We could do something similar with the Hive Savings (and any other time locked assets that are created). If one wants to get the funds immediately from Hive Savings, maybe there is a 5% charge.
At this point in time, I have no idea the technical feasibility of some of these ideas. However, it is good to start a discussion about this.
What are your thoughts? The goal should be to make HODLing HIVE more attractive. The epicenter is Hive Power. Thus, can we do a variety of things making it more appealing?
How do these ideas strike you? Do you think they are worthwhile to pursue? Are there others that you have which could help in this endeavor?
Let us know your thoughts (and ideas) in the comment section below.
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“Free” transactions has long been a selling point for Hive (even if fees actually are being levied from RC’s).
Even little 0.25% charges would negate that long-standing selling point. Sure, might be worth it in the long run, but not something to be done lightly.
Destroying one of the most unique/special features of the Hive blockchain? This (introducing fees to the internal market transactions) would be like shooting ourselves in the leg. I really hope that this will not happen.
How is that?
How much activity is on the internal exchange? Are a ton of people taking advantage of the lack of fees on there?
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Hopefully we will not know it in practice.
How much activity would be with fees? The current 24 hour volume is $48 110.85.
Again. How many people would use it (either regularly or occasionally) with fees?
Would hate charges, so niggardly and against the spirit and potential of HIVE.
That is true and that element would still be there. We still would have no "fee" (directly anyway) for engaging with the blockchain. It would still be fee-less. However, there are certain activities where there is a fee. This is not for posting, commenting, or upvoting; nor for sending money to another.
However, if you want to utilize certain features, then there could be a fee for that.
Semantics? Maybe. But I think we are not changing one of the selling points to Hive. In my view it would still be feeless to transact with the chain.
But certainly worthy of discussion.
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I think that this is a bad idea.
Hopefully there will not be a transaction fee on the internal market. The current state is a perfect example why the Hive blockchain (including the internal market) is better than most of the other blockchains and exchanges.
Why would anyone want to make any part of the Hive blockchain (including the internal market) similar to other blockchains and to other exchanges? This would destroy one (or more) of the unique features of the Hive blockchain. Unique features, which makes the Hive blockchain special in the cryptocurrency world.
How would it destroy the unique feature of Hive? There is still feeless transactions. You are not charged to comment, upvote, or even to send money. That would all be the same.
But when exchanging tokens, isnt it worth a small fee to do it since you cant do it for free elsewhere? Especially since it would be going into Hive Power to help defend the system.
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This. You cannot do it for free elsewhere. This is a thing available excusively only on the Hive blockchain?
This is a unique feature, and by introducing even a small fee, you would destroy it, making the Hive blockchain less unique, even if comments, upvotes and money transfers are still feeless.
I feel Hive if gets adopted by more Metaverses that would help out the blockchain more. Because when you have blockchains like this on the payment side, it's lot cheaper and faster too. Hope more good games like splinterlands come in on the chain. :)
We will see how Hive ends up entangling itself with other projects. There is a lot to develop and we are really so early when you think about it. Nevertheless, we are taking steps and moving forward.
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I hope this paves the way for Hive swaps as well. I think LEO could make a decent amount of extra funds creating an easy to covert/swap system of HBD and Hive on these DeFi platforms.
It's also going to be interesting when resource credits kick in and onboarding via this method. I'm not much of a fan of the early withdraw time for fees due to a major security issue it brings up with exchanges and with the low market cap of Hive still makes it a very real possibility for take over again.
It would all depend upon activity. But the internal exchange could be a nice source of revenue to implement into the HP "pool" that gets distributed to the HODLers. The goal is to add some extra APR to make it more attractive.
Something to discuss and hash out. I know some really like the idea. It depends upon what is being affected by the early termination. For powering up/down, that is different than a time locked vault.
A lot of possibilities if we put our minds to it.
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With what you've pointed out, making Hive attractive seem like one way to take the focus off the 20% coming from HBD. We wouldn't still stop worrying about sustainability because it's an audacious move, however I'm with you on sort of adding some little fees to transaction, since it's in-chain and might not really be felt.
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There is valid reason to consider the threats being posed to the chain in any moves. We want to consistently keep making Hive more resilient to outside attack. One of the biggest factors is simply size. As things grow (and go up in value), it makes it harder to pull something like that off.
But yes, focusing upon helping the "HIVE side" is also something to consider. We need to incentivize people to want to hold and stake HIVE.
Tossing around different ideas can only help.
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Well, hopefully, we can do this. I guess many will be thinking of jumping into HBD, creating this competing is good. But Hive backs the blockchain and there should be more evidence to show this.
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We only think it is competing because we are rather small and limited in our resources. The reality is HBD opens us up to an entirely different type of investor. This is something that has the potential to pull in a lot of money from the outside.
If that happens, we could see the price of HIVE go up a number of X. This means putting HIVE into HBD to get 20% might end up being short sighted. That is why I am doing both.
Cover both sides. But yes Hive Power is the epicenter for the entire ecosystem.
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That was my thinking, too. All those new accounts will need some HP, or other access to Resource Credits, to operate. Seems to me like a win/win.
I'm not in favour of fees and taxes. One of the great selling points of HIVE is its "fee" less-ness, even if those costs are accounted for through Resource Credits.
Faster power-down plus penalties might be an idea and may attract additional investors who would otherwise baulk at thirteen weeks. Who knows, having got them here, they may decide to stay.
Yep. It all adds up. Each new person interested is going to have to have an account and some HP to even put HBD in the savings.
The blockchain operation is still feeless. Here the fee is for the swap, not to transact on the blockchain. One still needs RCs to do that. If not, no transaction.
It is something many have mentioned over the last few years. Certainly worthy of a discussion.
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Justin Sun wanted to have faster power-downs, that is what you are talking about?
A new Sun like idea?
That's strange. I don't know if I paid any fee to open my account. Or is it withdrawn from your wallet after a specified amount of time?
No it is not. You might have gotten a free one through an application or Hive onboarding. There were a number of accounts floating around. They got scarce after Splinterlands went through so many last year.
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So how do I get someone else onboard... Folks have been complaining about receiving error messages when they tried to open an account.
I am not 100% sure but try to do it through Leofinance.io. I think they have accounts and a simple process.
Might not work for thousands of users but a couple here or there is fine.
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Blocktrades.us sells them in their hive tab.
thank you... @antisocialist
I wonder if it would make sense if this kicks in at certain threshold of HP. Kinda like a tax bracket. This allows minnows and new entrants to Hive enjoy a fee-less experience, keeping onboarding from gaining more friction.
As your HP grows, a programmatic and witness defined fee structure kicks in? Incentives would need to be carefully thought out of course—you don't want to gouge Hive's most invested users either.
One really has nothing to do with the other. And that type of system, with taxes, is showing to be a grand failure.
A minnow might not have a lot of HP but could be a very active trader. We want to encourage more holding of HP, not less.
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You can set withdrawal phases to slow down Hive removals from power pool.
The feature can work like a charm using a gradual withdrawal method.
Suppose, I have 100HP and I want it to withdraw immediately, now the only way I may withdraw 20% of total 100HP per week i.e. 20HP and rest 80HP will remain as it is until next 20% cycle, which could be 16HP or more depending on the user's HP growth.
I know many may not like it since it keeps withdrawal a bit slower, but helps Hive remain in the pool for longer.
Second feature those who Hold 50HP or more can be incentivized with certain percentage of %HBD per week, that HBD may remain in the public funded pools for a month to gain yields that could possibly help to buy Hive for delegation to new users, again a new pool of HP will remain in delegation for longer durations. A win win situation.
I said a while ago they should give the option for a reduced power down period but have some kind of penalty for it. I think back then my suggestion was to burn it, but thanks to PolyCub we have all seen how redistributing versus burning can be a good thing. If only people diamond pawed their Hive like they do xPolyCub!
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The idea of burning never made sense. Just a way to try and manipulate the token price by introducing scarcity. That is not how things grow.
While lowering it can make sense in certain instances, the key is to get more HIVE in the hands of people. People are afraid of the spread of HBD because they do not truly understand how this works. Of course, most think the Fed prints dollars so it makes sense they are amiss.
Hive needs a lot more money to stimulate commerce and growth. That is what HBD will provide (if use cases are also built out). Of course, there is the threat to the chain that we have to pay attention to. Using the resources of HIVE and directing it for "defense" only makes sense.
Having Hive Power should be appealing to people especially as HIVE starts to become scarce through utility needs.
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Good points. I understand the idea of the crypto being yours to do with as you please, but I have always had a problem with people who just cash out their rewards and never power up. Maybe it is my personal biases that can't understand the whole scraping for every penny thing. I don't know...
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I am not so sure about adding fees to the internal market. With a buy and sell marketbook, I just don't see the point of it. If it was an AMM and people were providing liquidity, then I would understand because people were getting tokens instantly.
As for the rest of the points, I agree. If people want to power down faster, then give it to them but charge them extra for it.
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Well there is no fee until your order is processed. The fees isnt a blockchain cost of transacting like on Polygon. As long as RCs are there, the on-chain transaction is feeless. It is only a cost of swapping.
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I really appreciate your take on this to keep the progress of hive going by making more features or improve attached to it will definitely be a nice move
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A similar move like Leofinance Ad revenue you have put out here which is why I like this space, find a smart or winning formula and others a free to replicate or implement it.
Besides the current advantages of Hive Power, making it more attractive for powering up will go a long way in having a positive impact on Hive, these are brilliant ideas you have come up with, I like the idea of burning Hive gained from account creation but I like it being directed to HP holders more yes we are in the age of abundance, it will be wiser to utilize the abundance we have towards growth than burning them.
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Ad revenue would work as well. The challenge is the front ends arent really Hive per se. I am not sure who owns Hive.blog, if that is an individual or a company or funded through the DAO. If in private hands, it might not be the choice of that team.
That is my view. The more attractive it is for people to power up HIVE, the better it is for all of us. Staking shows commitment which is what we are seeking.
We will see how it all unfolds. It is always good to get discussions going.
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It looks like the times of burning valuable crypto are over. Be it AVA or LEO or newly developed protocols, the burning mechanism that was obligatory to fight inflation has changed to a model where fees or other income are used to incentivize stacking of the L1. It might be a sign of mature chains that are decentralized enough to ensure that enough stakeholders are benefiting in order to lower immediately dumping risk of these assets. Hive is one of the most decentralized chains out there and should also follow that trend. Let’s stake all the HIVE that is normally going to @null to Hive-holders - be it account creation or anything else.
All great ideas! The early termination fee is very interesting. Personally, I would make it a little higher than that. Maybe closer to 30% or something but I really like that idea
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I still believe Hive blockchain needs an evolution like Hive 2.0. I mean, improve and implement things that other chains already have. Hive has free fees and fast transactions so already that part is covered.
I don’t know what are the future plans for the network, I would like to know.
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I get it acting a bit like a treasury so one could get increased APR possibly for having HP. I like this idea as this is the ultimate goal of what Hive is trying to achieve having more HP locked up. 2.8% is not going to make someone stake, but then again you miss out on all the other benefits like curation.
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It is always great to share ideas and brainstorm publicly with others. Interesting read as always.
I don't think it is a good idea simply because it would make Hive more vulnerable to pump&dumb scenarios, especially during bull/bear frenzies
I would be adamantly against a fee of this magnitude.
If I am providing liquidity to the market and had to pay a fee of that size for every trade, I would stop.
I would have to, or the margins would have to be much larger.
A .0001% fee, maybe, but mark me down as in favor of no fees at all.
We don't need web2 thinking brought into this ecosystem to wreck it, eh?
Early withdrawls on the bonds could be a source of extra revenue for hive power, but I wouldn't want to encourage passive holding of hp to overcome concern for governance as a reason to hold.
If folks want passive income, they can hold hbd.
As things are, hp is no longer getting the bulk of the inflation, now passively holding is getting over half of it.
I'm not opposed to that, either.
Surprisingly.
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If we add small conversion fees, we should remove the HIVE->HBD fee and lower the conversion time.
I also like the idea of distributing account creation fees to HP holders. But this should be a witness setting, just like the amount paid for a new account. There may be times when it's imperative to control inflation, and then witnesses can intervene and turn these fees back to null.
On the fees to internal market, that might actually hurt HBD stabilizer. I believe it also uses the internal market. Not 100% sure about this.
Hmm, I don't know what to say about your idea about DHF. That can be done directly by distributing less inflation to DHF and more to HP interest. Or a proposal. But not sure I'd try the former one, because then discussions about how high author and curation rewards start as well.
I'm ok with existing instant PDs for a fee of 10% or higher, which goes to existing HP holders.
At first I thought a fee of 5% for getting HBD instantly out was excessive for a stable coin. But HBD is only stable-ish, so maybe it makes sense. And the fee should be distributed to existing HBD holders in the savings or again to HP holders?
Of course these are ideas and all of them have serious implications in the economy. So more people should offer feedback before they are even considered.
If holding HBD is more attractive than holding HP, this seems like the main issue that can easily be fixed without any extra tinkering.
How you increase HBD usage and volume would then remain.
A solution that promotes HP still is needed.
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I literally support some of the ideas said up there and I want to ask, is there a post like this analysing the ROI of optimum curation. I really want to see.
.
Concerning staking and installing fee, that will be good. More than 70% new defi do this a lot. Hive doing this isn't bad.
Echanging of Hive to HBD fee? No, let it be feeless.
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I dont think that is available. You can see your curation return on Hivestats. Here you can look at others I believe also.
Why?
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