More rumbling about the Hive power down period? Well it is certainly one of the important metric of the chain and its overall tokenomics.
I have posted on the topic before Hive Power Down Period. This was back in July 2020. Since then the DeFi boom has started and introduced a whole new layer and ideas about tokenomics. Can we learn and implement some of them into the Hive tokenomics and its power down period? Lets take a look.
For starters just to note the other chains and the DeFi tokens unstaking period for reference. Most of the chains have a few days unstaking period. Somewhere from 3 to 21 days. The DeFi tokens have zero unstaking period. You hit the unstake button and that is, tokens are unstaked immediately. Hive with its 13 weeks power down period (1/13 each week) looks like a dinosaur in the industry. This long unstaking period can deter investors from staking Hive and earing curation rewards.
The long unstaking period on Hive is not just bad things. It has few good things that are very important. First it prevents exchanges staking and interfering into governance (in most of the cases 😊). This is a very important thing, something that @dan has pointed out in his book as well. Most of the tokens with stake governance model suffer from central exchanges gathering a lot of tokens and influence the governance. Other positive thing is that this long term unstaking period creates more loyal user base, or at least is not attractive for speculators only, at least for staking and governance purpose.
Unstaking Period Options?
What are the options for the power down period. One of the most mentioned and popular around here is the four weeks power down period. It is simple and effective. Although it can bring some questions about the exchanges voting. In summary the power down period options would be:
- Simple shorter power down period (four weeks for example)
- Instant power down for a fee
- Internal market for Hive Power to Hive
- Power Down period defined by the user
The first three options have been discussed already in the previous post linked above. In short, the first option (four weeks) seems to be the most preferable. Its simple and something that Hive users are already accustom to. It is the option that most of the tribe tokens are going for as well and we don’t see much discussion there about it.
The second option is something that @theycallmedan mentioned and it gives the ability for Hive to be powered down instantly for a fee. Say you pay somewhere around 5% to 10% fee, that is burned. Instant power down is really investors friendly as in crypto four weeks is still a lot of time, and people usually want their tokens immediately. The con of this is maybe less security, because if an account is hacked it can lose all the tokens. Although there can be a workaround this, adding more security (second account approval?) for the instant power down operation.
The third option is something I proposed as an effort to introduce an open market forces to the power down period. It was mentioned by others as well in the past, I believe @scipio has a post about it a long time ago. The basic idea is to trade Hive Power for liquid Hive on a internal market, just as Hive is traded for HBD.
User Defined Power Down Period
The instant power down period and the option to trade Hive Power to liquid Hive, include a sort of fine in them. If you want your Hive Power immediately you will need to pay a fee or trade it on the market where Hive Power will be cheaper from liquid Hive.
Why not instead of punish the users for shorter power down period, try to reward them for longer power down period?
This concept is stealing from some of the DeFi tokens out there where the longer you stay the higher the rewards. The geyser model for liquidity providers on DEXs. Even better the curve.finance model for yield amplifier. On curve users have options to lock the CRV token up to four years for better return on stable coins, increasing the yield from few percent up to 30% to 40%.
Why not try to implement something like this for Hive. My personal opinion for Hive power down period would be the shortest as possible (a week, a day?) and then give higher APY if the user choose to power up Hive for a longer period of time, years included.
For example when you power up Hive, you have the default option where your Hive will be available to you after a week (day if possible?) after you hit the power down button. In this case you will earn X amount of APY. Just as an example say 8%. You also have an option to lock your Hive for months, say six months for an APY of 12%. If you choose to lock your Hive for up to four years you get an APY of 30%. The numbers are not real, just for the example.
This option will still introduce open market forces to the power down period, but instead of punish users for shorted power downs, it will reward users who will stay longer in power up mode.
What about governance?
If the shortest power down period for Hive is a week (a day if technically possible?), with options to choose a longer period for better rewards what will happen to the governance then?
These short periods will allow exchanges to vote on witnesses and proposals. Will the chain be at risk of centralization then?
I’m not totally familiar with the topic but I know that when a user delegate Hive Power he doesn’t delegate voting rights. This needs to be done with a separate operation on the chain, setting up a proxy for voting.
What this means that even now staking rewards are separate from governance!
Can we separate the staking rewards mechanism, power down period from the governance? With the latest HardFork newly power up tokens are eligible to vote after three day. This prevents overnight attacks as we have seen in the past. Can we make it so, that in order for a user to be eligible to vote on witnesses and proposals he need to stake his Hive for at least 13 weeks (or even more?). This is an option that can enable the chain to introduce more dynamics into the power down period, make it more attractive to investors and at the same time keeps the security and the decentralization of the chain.
This is just some thoughts and ideas about the power down period. There are more options, or some combination from the above. The four weeks power down period looks the easiest and the simplest. But I think more complex tokenomics is coming up overall in the space so why not try to add up a bit to the power down period.
What are your thoughts?
This is a post on the 2021 To Do List For The Hive HardFork:
All the best
@dalz
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I think it's 30 days.
Hm ... maybe, I'm not so sure about it :)
In the official announcement of HF24, it says there is 30 day cooldown time on newly powered up HP for governance voting.
Great thanks!
Make it a week and be done with it.
Or, even better, shorten everything to 5 days. 5 days curation, 5 days powerdown, 5 days unstaking.
There is no law that says: make crypto as confusing as possible. We don't have to live like this. We really don't.
Five days is interesting .... I would even go for a three days, since most of the voting seems to happen in the first day or two.
I also prefer simple solutions, but the trend in the crypto tokenomics seems to be adding more complexity.
What are your thoughts on the exchanges voting in governance?
If we make everything on three days, then it's easy to exchanges to power up and vote with user funds.
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3 days is even better but I didn't want to rock the boat too much ;)
Hardly anybody votes after 24 hours of publishing. Maybe some freaks who optimized for farming. These guys have no trouble adjusting to 3 days.
I don't care about that exchange voting issue at all. Not their coins, not their vote.
Because Hive has a history with exchanges using coins in creative ways, we could keep the 30 days governance voting delay. We could even increase it to a lot longer. Governance is not the main reason that makes Hive appealing to a broad audience. Governance actions are infrequent anyways. That means it doesn't matter much if your powered up stake registers now or in a few weeks.
Governance action are not frequent but they are at the bottom of the security of the chain. Imagen this chain being attacked again, and the attack is successfull? Wouldnt that make people think twice about this whole network?
If this chain is being attacked by colluding exchanges, again, and a 30 day delay doesn't prevent that, what is the chain worth?
A group of colluding actors will not be deterred by an extremely long powerdown period because they can change it.
It happened at Steem.
I think the 30 days delay in voting is a nice solution, people will notice if a stake with a size that can influence governance is powerd up and take action... even with a short power down periods.
When most votes happen doesn't matter here. The reason is that it takes 5 days for VP to recharge from 0 to 100%. Meaning if it's lower, someone could "double-vote" a post by unstaking and powering up another account to vote on that post again.
I think 30 days would be best because of the account recovery also lasting 30 days in case of a hack or key theft.
Then change the dynamics of VP. Recharge over 3 days but actions cost more.
The 7 day voting window was created because the assumption was that people needed enough time to be able to vote. 3 days is probably enough time.
Somebody did an analysis when votes happen. I don't remember right now.
It used to be 12h and 24h back in the day, I think it was mainly raised to mitigate abuse, so people could have time to reach out to real content creators and ask if it's identity theft, etc. I don't think changing all that just to get a faster powerdown is worth it, the change from 13 weeks to potentially 4 would already be decent enough, imo.
It is an academic discussion and nothing will change.
Why not think a little outside the box ;)
I mainly brought it up cause @dalz said this
just so it's clear that it's not about when most votes occur and it could be something that could halt the chain if the rewardpool gets confused why more stake is voting than there is vp for or something.
I do with @theycallmedan's option. The 12 weeks power down period is healthy but it's not bad paying a fee for get it in four weeks or even further pay more for two weeks I can't stipulate the period or percentage. Either sat 3 months isn't bad at all.
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This is good proposal
I vote for it
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Vote for what?
The good proposal ;)
:)
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I like the idea of a user defined power-up/down period. The longer the power-down period, the higher your curation and inflation rewards. And have some minimum for governance voting (say 30 days).
Ive been toying with this idea.
I prefer 4 weeks, 13 weeks is a bit longer period.
Yea 4 weeks seems one of the solutions
Make it 4.444 weeks :3
I think 4 was a bad number in the east
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Yeah 13 weeks is way to long. I don't know all applications and reasons for the 13 weeks powerdown, but I could go for 1-2 weeks maybe? But it would be good to have a really good understand of the implications before we make a change.
Quality post :)
Thanks!
Wouldn't Hive - HP market peg to circa 1:1 anyway? In this case, any instant power-down pressure would generate counter power-up pressure. I like it.
Also, the idea with positive reward feels good, however, I can see two approaches:
I like the second one much more.
Aby power-down period shorter than 7days creates a risk of double voting also the shorter power-down period the more space for speculation.
Yes this is an option as well, but having the user preset the period is giving some deterministic numbers for the network.
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This.
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We can always do something more.
Nice writing, @dalz.
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Thanks!
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In my opinion the long power down period shows weakness and insecurity. If you have great tech worth staking on then that's the incentive to keep staking, not the threat of tokens being nonliquid for months.
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That as well!
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I am big fan of a slow powerup, fast powerdown model.
If one wants to powerup, he shouldn't have influence on reward distribution and governance instantly. It should take time, with his powerup growing by 1/13 every week for example. This means that you can't have a short term investor who just powered up for fun change things too quickly.
I know that the governance issue was fixed last HF, it now takes one month before governance power is given to a stake. I prefer a growing influence over time, and for reward distribution this feature is lacking.
Why is all of that needed? Because the powedown needs to be instant. Again, why? Because it is better for hive's price. This seems counter intuitive, but the longer the powerdown, the worst it is for hive's price.
The biggest opposition to fast powerdowns is always security and the fact that investors with Hive power should be long term oriented. The security issue can be solved by making it optional. The long term investor argument is fixed by a power up waiting time. We can even make it longer than 3 months, with older stakes having more influence up to say, one year.
This is a very interesting idea. It would be worth digging into it a bit on other aspects that have not been addressed.
Examples:
Very good points.
RCs system could remain as it is, with full capacity given instantly. I don't see why not.
For the error powerdown, we could make it 1 to 3 days, that would would give enough time for someone to realize the mistake. About the witness shuffling, we currently have the same issue when a whale powers up huge amounts, so it shouldn't be a big problem.
It is unlikely that a whale powers 100% of its stake down if it can powerdown 25% of its HP in one day.
Interesting take on the panic sell.
Although there is much more HIVE on the exchanges now, almost 130M, or around 30% of the supply. But still probably panic sell would impact things to some degree.
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Yes, right now not a lot of hive is powered up because we're at the end of a very long downtrend + consolidation. I expect powerups to increase as the price goes up.
I would definitely opt for that. It's prehistoric to still have that 13 weeks powerdown period. It's not even incentivizing to power up when you know your funds will be locked for that much time. There's stacking on so many projects right now, but quite many have instant unstake and that should be an option on Hive as well.
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Yep, instant unstaking is becoming a thing.
But they dont have a 7 days window to distribute rewards, and 5 days recharge for the voting power. If we want shorter than this we need to adjust those as well.
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You're right. Then maybe a one week time frame. The idea is that 13 weeks is too long. Leofinance seems to have found the sweet spot somehow.
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This is what I would change:
Tie the payment of interest for holding HP to voting on governance. In order to receive interest on your HP you need to vote for block producers and proposals. This would incentivize stakeholders to increase the security of the network.
Use the savings account feature as a second staking mechanism where you can earn interest and take out loans on HBD (for those that are not interested in governance and/or participating in curation. Here the staking period could be must shorter (this is similar to what @edicted has proposed).
With these two options there is no need to change the powerdown period. A four week timeframe to unstake HP is the limit of what I consider safe for the network.
Those who are proposing insanely short powerdown periods seem to forget how easy it was for exchanges to colude during the Justin Sun fiasco.
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Incentivising power up will require an intuitivemodel, if I'm not mistaken. Or is it going to be a situation of individuals having something like a slider where after you click "power up", you then specify how long you intend stake your coins with a slider beside it that also indicates the APY? That would be dope
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great post!
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Not sure of the right way but good to see conversation is still going. Long power downs so exchanges cant vote sounds like we are being held to ransom. Hive: Freedom of speech , Freedom from lockup - FREEEEEDOM :)
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STOPCheck out the last post from @hivebuzz:
I have no idea about the technical implications of any of it, but I really like the fourth option you proposed and described!
Again, I don't know enough about blockchain and stuff to think about the implications, but thinking strictly as a user of Hive it makes perfect sense.
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Eliminate the 20 hive tax on voting content while poor.
End delegation for profit, it is vote selling.
Interest on savings accounts.
End dao funding, it has plenty, for now.
Bring back the 30 day rewards pool eliminated in hf17(16?).
Extend reverse auction to 4 hours and make all votes in it equal while later votes follow current curation rules.
I bet I've missed a couple.
I like the instant power down for a fee idea.
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We have account recovery set for 30 days. This is a great feature of Hive. Why ruin it with 4 week Hive power down. I like the idea of different levels of rewards based on for how long Hive is staked for. You could apply the same for governance.
What about adding a voting weight multiplier based on the staking period?
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