This all goes back to the very origin and the inception of the chain with its predessesor in 2016 and the 80% ninja mine that is skewing the Hive tokenomics. Its effects are much lower now but still present.
The DHF funding that are the biggest source of aditional inflation, would have been much lower and capped by the programatic inflation if the initial tokens were not there. The programatic inflation, if say on average is 25M HIVE per year, alocates 10% to the DHF, or 2.5M HIVE and if say aplied average price of 0.2 USD per year equals 500k HBD. And that would have been the natural and programatic cap of the DHF spendinig.
The 3M HBD per year for the DHF that we are aproximatly running to in the last three years are only possible due to the ninja mine. On the inflation side for 2025 up to now we are at 40M HIVE, probably will end up somewhere around 47M, that is almost double the nominal 25M. This will be a record amount of HIVE put in circulation in a single year!
Long story short, we are spending for funding more than our means, made possible by a pre mine. Another note is this would not have been so damaging, if we had some growth in the last years. The lack of growth and the extra spending is what is putting us in the curent situation. Going into maintaince mode is certainly welcomed. Meanwhile if we can make some quick wins on the growth side that will be amazing.
Looking at other chains, you definitely have to evaluate the growth aspect. It's not easy to grow as a blockchain in a Web3 world that has very few applications connected to the real world (which would mean ongoing inflow of capital) but an increasing number of blockchains competing for basically the same set of users and investors. Hive stands out with a unique set of products, but there hasn't been enough growth on those to sustain the inflation, and even if there was more growth (say on peakd or Ecency) many of the users would be net sellers of HIVE because they earn from inflation.
I still think that being able to offer a social incentive layer to apps is a good value proposition, but can't tell how difficult it would be for Web2 developers to integrate Hive (including account creation and resources handling)...
P.S. Debt updated:
Maybe there needs to be a way to pre approve a budget each year, so that the budget is fixed in HBD and then it gets consumed until it runs out or until the year ends.
One of the key 'omissions' in all of this is that it has never been made clear enough publicly that the value from which market caps for Hive are calculated from by sites like Coin Market Cap, do not include the DHF pool. This gave (me at least) an incorrect perception of the state of Hive and its potential, right from the inception. Every DHF payout inescapably lowers the token price. This should have been made abundantly clear and not doing so is an epic failure.
Yes, this is correct, it was not made clear, and it has become clear over the last 18 months or so to me. It seems that even now, many take the view that we are spending "small amounts compared to other chains" but they fail, to the detriment of Hive and its market cap ranking, to recognize that the spending is only sustained by large amounts of money printing, which is a non voluntary tax of value transfer from the wallets of most to the wallets of those being funded / those directing the new outflows from the DHF