Why is it an injustice? Yes people have been building and working for years, but that hasn't been very successful. If some new blood comes along and changes the trajectory for the better, why should the old farts who contributed to it all stagnating for years be protected from dilution just because they were first? That doesn't sound like a very attractive proposition to new blood.
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Its an injustice because many of the people being funded by the DHF have not lost a single penny and have earned well, while that value has been transferred via inflation from accounts of Hive Power holders to their own. The Hive Power holders had no idea that the DHF could inflate the chain to such an extent, and had this been known, i very much doubt that as many people would have held Hive Power so religiously all this time.
I appreciate that maybe the tremendous amount of money disbursed from the DHF was not necessarily done to inflate away the positions of Hive Power holders, Im sure it was done with good intention in an attempt to build value for the ecosystem, but, the only other alternative position that is then acceptable is that we are some of the most naive people when it comes to managing a money printing economy in a professional way that protects investors and grows the value of their stakes (dont get me started on how much money has been thrown away with zero accountability and how only a very small group of people have the ability to direct inflation on this chain at this point, Value plan for example where one person can decide what they want to do with 2% of the chain's annual inflation, which is now funding rally cars and acrobats in Venezuela, a water pipeline in Venezuela that it totally corrupt, water boreholes that should be now showing local economic activity, but instead just keep printing evermore expensive boreholes... anyway the list goes on and on, almost endlessly).
HP holders are down 97% from the top, the whole time we were losing coin market cap rank while also saying that "we weren't spending enough compared to other chains". That spending has now added 60 Million Hive to the supply on top of the scheduled programmatic inflation.
Its not an injustice from the point of view that there is an aggressor and a victim, however, it is an injustice from the point of view that neither investors nor users voting for DHF funding knew that there was a scenario where 60 million Hive could be added to the supply on top of programmatic inflation by voters from the DHF.
At least more people are now aware of this issue, including, i think people at the top of the chain, and we can now work towards fixing it with the tools that are already built, or not, and if we choose not to and that inflates the chain significantly more (which is the path we are currently on) then at least it is more clear for future investors what they are getting themselves into and where the community can (and most likely will) use the DHF to transfer an unreasonable / unsustainable amount of value out to future elected DHF projects via inflation of their HP investments.
Ideally as a community we choose to change course and collectively reduce outflows from the DHF to match the of the size of the economy. This course of action will make us much more anti fragile than we would have been in the next bull market, had we not have been through this test and passed it successfully.
With all due respect, the algorithms, including how DHF budgets payouts to develop the ecosystem, have always been public, and if you didn't understand how it could result in a larger supply of HIVE, that's on you as an investor.
Yes, DHF contracts are for a fixed value, while HP and HIVE holders have both upside and downside. Again, this is for HIVE/HP holders to understand and decide if they want to hold or not.
Its not that I didnt understand, i understand very well. I have been talking about reducing the budget via DHF outflows for well over a year to prevent the situation the chain finds itself in now. The tool to limit DHF outflows was always to "vote the return proposal", which clearly didn't / doesn't work. Obviously the community is not capable to manage its own economy with the tools available.
Blockchain tech was supposed to take the ability for the community to print money away from it and put it into programmatic code. Which Hive has failed to do.
Sounds like the code needs updating to limit the outflows from the DHF. The lack of a cap on DHF outflows means Hive's economy has a huge exploitable weakness which is a major security risk.
I would argue, rather, that it is doing exactly what stakeholders want and have voted for. That it isn't want you want have wanted doesn't make it a failure, it just means you were outvoted.
That's false. Hive inflation is fully programmatic, but programmatic doesn't mean fixed or even necessarily low. It's dependent on price trajectory along with the supply of HBD, and this has always been the case going back to the first release of STEEM. It's not a fixed supply like Bitcoin nor fixed inflation like DOGE, but that gets back to knowing what you own. (In fact, it used to be more variable, but some guardrails were added, especially the haircut rule.)
Hive also differs in that governance allows the community to change the rules pretty easily. That works both ways though, it can be made better (from one observer's perspective at least) as well as worse. Again, caveat emptor. If you want hard money with immutable (or at least harder to change) rules, Hive is a bad fit.
There is no way that stake holders would vote to create a money supply that sends the token price to zero. There are only a handful of voters that vote for the DHF outflows (that can push the votes above the return). I very much doubt that any of those stake holders voted to lose so much market cap ranking. I argue that these prices are not intentional, and that how much money we each personally print via our DHF votes and how much of a negative effect on price and market cap ranking that those votes have is not well understood at all by these users at all. And if it were better understood, people would have much stricter requirements on putting caps on the size of proposal budgets and would be a lot more demanding of better reporting and return of value to the DHF that projects bring, amongst other things.
Almost no one on hive has any idea how large the DHF inflation is compared to the programmatic inflation via WR, CR, AR, DHF inflows. I very much doubt even you, with respect, can state how much HBD / HIVE has been created via the DHF due to your own votes, off the top of your head.
It is a programmatically reducing inflation, and the DHF should be a proportion of that at max, it should never be the same size (if we want to have a sustainable economy, with a credible inflation that is). Voters in my opinion, did not know they were voting to expand the supply to such an extent that we would drop down the market cap rankings from top 100 to top 500 at times. And so, had they known, would have voted differently. As you can see, sentiment around DHF votes is now (ever be it a little late in the day) changing, and proposals are getting smaller and shorter. Outflows from the DHF are down, as the community now is starting to recognise how inflationary the DHF is, especially at these low Hive prices.
Hive is not a bad fit for hard money. It should expand related to the size of its economic potential. it should not inflate 60M new hive tokens from a DHF into the economy in such a short period of time. Im sure even you can see that that is not how to operate a sound economy. It does Hive no favors in the future with investors. The idea that a HP holder cannot know within reason what the inflation will be because the DHF can print so much money at any time that it can cause serious inflation is a totally untenable basis from which an investor can invest.
This is also an attack vector. any investor that can accumulate enough tokens can therefore damage the price of Hive by voting to release funds from the DHF. This attack surface should be prevented by adding a cap to the outflows of the DHF.
An investor who can vote to release tokens from the DHF on their own, for the purpose of damaging the price, would be almost twice as large a stakeholder as blocktrades and that assumes that no other stakeholders saw the attack and would add votes to return, clearly false. For example, if blocktrades voted for return, the return vote would be 80 million, not 50 million. This attack is simply implausible to even happen, and it also makes no logical sense that someone with 50-80 million HP would want to send the price to zero.
Further someone with a stake only slightly higher than 80M could vote in all of their own witnesses.
I don't really perceive your disagreement with Matt to matter too much if I'm to be honest. I apologize for "jumping in" but It feels, at least from where I stand, that the core proposition is not being discussed. It feels as if the conversation turned philosophical and that's fine, but the post was not about the philosophy of money.
I think we all recognize that Hive is doing, has been doing, what its programmed to do. That part is clear. The code doesn't allow for things that outside its rules. What Matt is saying, and what I believe is a good amendment, so to speak, is for us to agree on a different approach as a community of stake holders. Now ideally, and I mean this sincerely, this conversation should not be happening. Someone with the right skills could jump in and do a pull request for this needed change, and granted they manage to use their political capital, get such a thing to be included in a future hard fork. That would be ideal. But the sense of emergency is now, hence this post and this conversation.
TLDR
I can agree with you and with Matt. The ideas don't oppose each other. As a matter of fact, agreeing with you on how we got here, and recognizing hive is working as it supposed to, is precisely the reason why I support us changing how we treat the DHF.
Hive’s base inflation being “programmatic” is like saying your house is technically clean because you made your bed while the rest is on fire. Sure, the code prints at a fixed curve, congratulations, but if the DHF can drop a supply nuke the moment a few voters get trigger-happy, then pretending the system is predictable is pure comedy.
Socrates would’ve pointed at this and said, “There, that’s exactly what I meant.” The guy literally built a philosophy around exposing people who think they understand something they clearly don’t. And here we are, with people parroting the word programmatic while the actual monetary expansion is basically a mood swing with a wallet attached.
Investors aren’t scared because Hive isn’t Bitcoin. They’re scared because the supply can balloon harder than a meme coin just because someone didn’t do the math before smashing “Support.” If your inflation rate can explode because two dudes got enthusiastic on a Tuesday, that’s not sound money. That’s amateur hour with a blockchain.
Putting a cap on DHF outflows isn’t some radical idea. It’s common sense. It’s what you do when you don’t want your economy to depend on whether the community collectively had a brain cell that day. And honestly, if Socrates were here, he’d probably ask the same thing I’m asking now: how can you talk about sound monetary policy when the biggest variable is human cluelessness?
Yes, clear. But this still means that existing members of our community could vote to release an exorbitant amount of HBD from the DHF without realising how damaging it is to the supply. (Something we have unintentionally done IMO over the last two years). This is still not really something that is attractive to investors while there is no cap on the outflows of the DHF so that the DHF does not significantly inflate the supply of Hive in a short time, or become bigger than the market cap of Hive for example, which is now not an unreasonable next step lower.
What good reason would you argue that there should NOT be a cap on the DHF outflows?
Bring back the whale experiment!
The more changes we have made to the original design the less I've liked it.
It's almost as if somebody wants us to fail.
Can't really blame them, imo, we do appear real similar to an ungrateful mob.
Control freaks gotta control.™