Does Hive-Engine actually add value to HIVE?
As it stands right now, there are some serious demand issues for HIVE. Currently there are very few reasons to buy and power up HIVE beyond the posting and voting possibilities.
However, some (many?) are advocating that we take those away and have HIVE instead be truly a base layer with very low inflation upon which other things are built.
I am quazi one of those.
I say quazi because I am one of those only with a major caveat, and that has to do with us figuring out how to create new demand for the coin.
If we remove the social rewards layer there is almost no other demand driver for the coin, what reason is there to own it? To vote on witnesses and proposals? That holds little to no interest to outside users/investors.
From what I have heard the idea was that we would eventually launch SMTs, these SMTs would be tied to HIVE in that it would cost HIVE to create them and then it would also require resource credits to keep them running, more resource credits being required the bigger the token/community were to get.
However, lately I am hearing that SMTs may not ever be a thing and instead may look more like smart contracts, similar to what is being done with Hive-Engine tokens.
That sounds great and all but where is the demand for HIVE going to come from exactly then?
The un-popular opinion is that Hive-Engine and it's tokens have actually sucked value from HIVE as opposed to create it.
(Don't get me wrong I am a fan of HIVE-Engine in terms of what it offers, but from strictly a HIVE value perspective I have mixed feelings)
What I mean by this is that basically out of thin air we have had all these tokens created that now have real market value, where do you think that value has come from?
Has Hive-Engine pulled in outside users and outside money that has invested into these tokens? No, not really...
The majority of this value has come directly out of the HIVE ecosystem and flowed into these tokens, giving them the value they have today.
Not many people talk about this but this has been something I noticed far back when Hive-Engine first launched on STEEM...
I can't remember the exact date but I do remember STEEM had been relatively stable in terms of price, then a few months after Steem-Engine launched, the price of STEEM broke that support and continued to drift lower and lower, possibly because the demand coming into STEEM could not offset the value flowing out of it now.
Whether or not Steem-Engine was the cause or had anything to do with that is up for debate, but the possibility is certainly there and the same exact thing could be happening right now with HIVE.
We have all these tokens with market value that basically all came out of HIVE.
So, while we continue to try to understand why HIVE is having such a difficult time going up, I think this is something that not many people don't talk about that is likely having an impact.
And if we are going to continue down the path of creating tokens on HIVE, we need to do so in a way that ensures they actually create demand for HIVE and add value to it instead of pulling value out of it like we are seeing right now.
Again, this isn't a knock on Hive-Engine per say, it's simply me trying to figure out where the demand for HIVE is going to come from in the future and I'd like to figure out a way that we can ensure tokens created on HIVE continue to add value to HIVE.
All that being said, where is the demand for HIVE going to come from in the future?
Let me know your thoughts below.
Stay informed my friends.
-Doc
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It always goes back to simple business ideals. If we want hive to go up there needs to be a reason to buy it. People earning the token will always have incentive to sell which is fine but not good for price right now as there is too much selling and not enough buying.
We need something similar to smt's or tribes when communities get updated. They have to create revenue or buy pressure on hive and the best way to do that is make them very easy to set up with reasonable a cost to do so. Say 100hbd or the equivalent of hive. This will only be viable if the communities can be used to generate revenue.
For me a community or tribe should be at the level of leofinance when you purchase it and we get to see hundreds of them pop up. With 100's of gateways we will get new users and increase on chain activity. Leo will soon have a sign-up through metamask, twitter, facebook and google. We could see ad revenue from hundreds of sites which can auto buy hive from the market to sustain your community token. More users, more ad revenue. More revenue, higher token price and more demand to earn it.
Imagine if i could buy the sports.hive community with all of the leofinance options set up and ready to go with a slight customization and really own that community an it's keys then it would be a small price to pay. Then it is up to me to market that community externally, bring in users and moderate the experience to make it profitable. The community gets rewarded for being active and i get compensated for running that community successfully.
With hivepay.io in stage one it also opens up the possibility of marketplaces in each community that can accept any of the tribe tokens. Suddenly we have a varied and interlocked hive based economy through growing communities all of which increase revenue and buy pressure on the token. Communities should automatically provide RC to new users signing up which means the moderator account will need to keep powering up hive as it grows and further increases the use case of the token.
With more users we are a lot more desirable for apps to build here. Keychain makes everything interlocked and we all know how good the hive blockchain really is. We still have time to build web 3.0 but it is fast running out.
Hive-engine hasn't hurt the blockchain. It is showing what should have been build a long time ago and put to proper use. We should already have hundreds of leofinance sites adding value to the community but have been failed by the business minds and too focused on the technical. Those are important but there needs to be balance as you build. A focus on the people as well as the product. If tribes had kept developing at the base layer with the pace leofinance has done we could be doing a lot better as a token. Hive powers apps but we need a those apps prebuild for everyday people to run with.
Yes but I think you are missing my point. Communities and tokens by themselves do not increase the market cap of HIVE if there is very little tying them to HIVE. We need to create real demand for HIVE and simply creating more tokens and communities on top of HIVE doesn't really do that with the current model. Resource Credits are the only thing tying them together and currently it costs so little in terms of resource credits to run a community on top of HIVE that it simply doesn't drive enough demand for the HIVE coin to make a difference.
I got your point. But you seem to be looking in terms of a few thousand users.
I'm thinking of hundreds of communities with thousands of users each. For a start. ( I know,optimistic in the extreme but we should be planning long term.)
I see hive as the base token for all of these and trading pair on all dex the same as with eth or bitcoin. The revenue needs to be used to buy hive in my theory to power these markets.
Also each of these communities then generating ad revenue which will buy hive from the main markets to power their token and create a buy pressure.
Leofinance earned over $700 last month which was used to buy hive from the market. As of now they are a very niche site and only beginning to expand their audience as you know all about.
A community for harry potter could have a lot more members within a few months under the same set up. There could be hundreds of these communities within a couple of years if the tools are in place for people to start and run them. People spend hours every day setting up and running communities for free and with the threat of cancellation hanging over them. Why would they not do it for profit if the option was there.
A $70,000 buy order on hive every month (100 communities) would get it moving very fast and increase interest and speculation on the future of the token. That would only be a very conservative estimate as you can easily see leofinance going 10x more profitable in the new couple of years and these numbers could keep going up. People will drive the price but we need to be able to bring them in and keep them. from that point there is profit to be made from their attention and the higher the revenue goes, the more interest people will have to take part. Start their own community or innovate even further. It has to stat from somewhere.
Ok, but why would the community need to use their ad revenue to buy HIVE? Once LEO is on other exchanges they will no longer need to go through HIVE, correct? And I would imagine most of the popular/big communities will work on listing their token in other places...
I'm sure some of the bigger ones could branch out but taking the harry potter based community as an example. Their token would be hive based and i couldn't see binance listing it as an option. It would need to be traded on a hive dex against hive. The mod account would also need to stake hive for RC.
I mod the community and use the ad revenue to buy back the token with hive. Leo is a tribe with mining, Wleo and probably more to come but as a harry potter community those aren't what people would come for. They would come to engage and earn some crypto through participation. Post/ comment and earn. Buy badges and other token sinks to be added to the sites.
Maybe it can even be done in such a way that ad revenue is paid directly in hive to the mod accounts based on analytical views to each community site. Cut out the bitcoin step altogether? Then the money is already in the system and tying up hive into the chain and off the exchanges.
Who knows all of the possibilities.
I'm just trying to imagine some of them.
HIVE is the governance token of Hive. A successful Tribe will want to also buy some Hive Power to have a say in base layer affairs just to make sure their own community is secure.
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Hive-Engine tokens indeed until few months ago have been getting their life from within the Hive ecosystem itself, but lately they've expanded out of it. Let's just see LEO Finance model where you can blog using an Ethereum address, earn LEO and convert that back to Ethereum. In this equation Hive doesn't intervene at all and it's like LEO lives on its own blockchain.
Maybe Hive can learn from here, but in my opinion communities act like accelerators and models that can be followed by others and Hive itself.
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Yes that is true, so it no longer pulls value from HIVE, but does it add value directly to the market cap of HIVE? There may be some users that come to LEO (from outside of HIVE) and eventually venture over into HIVE, outside of those, where is the benefit to HIVE directly?
Some ideas. Generally anything which ties through the value in the underlying SMT to Hive at the top level.
Burning fees in Hive:
SMT creation fees (paid by community creating the SMT) to be paid in Hive and burned. Possibly an annual fee or different fees for different SMT functionality.
Trade fees in Hive:
DEX set up for all SMTs with very small trade fee (0.05%?) which is paid for in Hive and burned (like BNB coin).
Make airdrops for Hive holders popular:
Encourage new SMTs to airdrop coins to Hive holders. The balance between attracting interest and rekting your own coin is difficult but as SMTs become more successful / competitive this could start to be a more used option.
If there were a long-term lock in option with SMTs this could protect the airdropped SMT from being sold for an introductory period.
Game item airdrops:
Similarly new games could airdrop introductory items by Hive level.
Lottery functionality:
Pay out any Hive Power interest as lottery prizes rather than the small interest rate currently applied (which most people probably don't even notice).
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I like every single one of these. My question is, what would compel people to airdrop their coin on HIVE holders vs say airdropping them on another coin's holders? For example LEO airdropped on PAL holders instead of HIVE holders...
I think the price of Hive going up is likely to be more beneficial to the underlying SMT than the price of PAL (or other SMTs). Simply because Hive is out there in the marketplace and is the gateway / entrance point for attracting more users to the whole chain.
A periodical (quarterly / half-yearly?) organised airdrop of SMTs / items to Hive holders could be great marketing for Hive with the involved SMTs sponsoring / piggybacking the event and all promoted by Hive's "marketing machine".
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Which was a huge mistake btw...
I believe that the original idea was to use the Resource Credits as a mean to provide value to HIVE.
According the the FAQ:
The use of the Hive blockchain is currently very far from being overused so RC doesn't matter...and I doubt it would ever be since the Nr of transactions seems to be in downtrend continuously so...
Yes for RCs to add real value to HIVE in terms of its market cap the number of users we would need are many multiples of where we are today, many many multiples. When you factor in the ability to be able to rent RCs instead of buying them, the number of users needed goes even higher.
I don't know if it is possible but...What about changing the algo that rules the RC related with the amount of liquid HIVE at the exchanges?
You mean simply coding the RCs to be more valuable than they are currently?
yes
Good question. I've long wondered how the value relation to HP was derived for the RCs currently. That also raises another interesting question, if there was a major bull market in terms of HIVE adoption, what would stop the developers from simply re-valuing the RCs to a cheaper rate so things don't get bogged down from all the activity?
I was thinking about linking somehow the RC costs with the amount of Liquid HIVE in the exchanges.
So, if the amount of Liquid Hive is high then the RC cost should also be high and the contrary.
That would increase the demand for HP, so the price would rise and the RC cost would reduce.
Well mate, I am not really sure what would drive the price to go up anymore. Even tho Hive is "new" in da hood, everyone's hope is that when the BTC smashes it's previous ATH and money start flowing towards the alts we'll be noticed, the very same way it happened with Steem when during the previous bull run Steemit platform was overcrowded.
IS that enough? Hell no.
I do understand that there are a lot of things that should be fixed/ had to be fixed in order to promote Hive as the perfect place for devs to build their apps on, and market immutability that would drive big names who are censored on other social media platforms to Hive, I just don't want "us" to do in the very same mistakes we did on Steem.
We need to think outside of the box...and I guess to continue being patient(?)
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Yea, I don't think that is nearly enough either. There needs to be real demand drivers for Hive, especially if we are going to move the social rewards to layer two and slash the inflation. The way things are being talked about I just don't really see where this demand is going to come from? Is resource credit demand going to be enough to move the needle as that is really the only place I see it coming from?
Who knows? Perhaps if the cost of RC's in order to interact with the chain go 1000x we might have a chance
The number of users needed for that to be the case is many multiples from where we are today and when you factor in the ability to rent RCs, the number of users needed probably goes even higher.
Very good point. There's currently plenty of empty space in the blocks. Each contains about 20-40 transactions only and a similar amount of virtual operations on top of that. A small percentage of 64 kilobytes. When the blocks start filling up, only then will there be a real increase in the organic demand for RC's and thus HP.
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Yep and it will take a big increase from where we are today to start filling up blocks... how do we get there?
I could one day see Hive being more like an EOS where the token pretty much just gives you the ability to make transactions on the network. There will still be a value to the token, but then the main rewards will be handled by the individual community tokens. There have to be compelling dapps that make people want to transact on the chain. What that is I think will be anyone's guess.
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Yes, I believe that too and many seem to have the vision, but how exactly does that make HIVE valuable. Having an app with tons of users that generates revenue and buys up their own token with said revenue doesn't really benefit HIVE beyond the modest amount of resource credits required to run it, no?
Ugh, I replied to this, but it looks like it got lost. Sorry. I am not sure what the answer is. I know it needs to be something besides just a blogging platform...
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I'll play devil's advocate here. What's the real reason/main idea behind Eth?
People originally started holding Eth to interact with the Ethereum Network and pay fees. The thing is that 10 Hive is all it takes to interact to a feeless environment such as Hive and with RC's cost so little we need to find other solutions.
Yes exactly. The reason ETH continues to gain value from all the other coins is that they all need gas to transact and that gas can only be paid in ETH, thus giving the main chain value and driving demand for the coin. HIVE doesn't have that and thus why creating a ton of tokens on top of HIVE doesn't necessarily give it value, in fact it may just pull value out of it which is what we are seeing currently.
I know what you are saying. As I was reading and writing this I started thinking that it is almost too easy to interact on the Hive chain. I think it needs to be more expensive (within reason).
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As you mentioned, the number of users to push this up is a lot, but that is a driver. While 10,000 accounts transacting doesnt do much, 10x of that, which isnt that huge for an online platform.
Governance is glossed over but if projects have a lot of value, those who have stake in it will also what to have a great deal of say over the base layer. A lot of this might come from the business owners of the DApps that are created.
**If a smart contract layer is formed like Blocktrades is discussing, then we could see a similar situation with some DeFi starting on Hive. This will likely mean that all liquidity pools will require HIVE in addition to whatever DeFi token.
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Ok, so if it's going to take hundreds of thousands (or millions) of users showing up to just begin to move the needle in terms of resource credits impacting the price of HIVE, how do we get those users to show up exactly?
3Speak is already working on something according to their last video.
DApps also have to do their own outreach programs. What was built has not pulled in new users to their platforms, let alone hive.
It is one thing to build a DApp, but the leaders of those projects do not seem to be applying simple business principles that lead to growth.
I think a bigger question to be asking is why arent the DApps on Hive growing like normal businesses seek to do?
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Yea, that is a very good point. It's a multi-pronged issue.
Really excellent questions!
I believe the value will come from having a DApp ecosystem in which there will eventually be DApps capable of attracting significant attention and usage from outside the current community. The whole thing is a long-term affair. Tapping into other blockchains through wrapped tokens will also bring added liquidity into the ecosystem.
The second layer apps will each try and target their particular target audiences in their own tailored ways.
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THis is a very solid piece. It would be a great research seeking to know the actual and dynamic effect of Hive-engine tokens on the value of Hive; HIVE's demand and supply. I'll like to share my thoughts in an entire post and would tag you. This is a great muse.
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I suspect thus far they have pulled more value out of HIVE's market cap than they have added to it.
Dont they have each hive.swap token backed by HIVE?
This means they are removing more HIVE from the open market.
If I take my HIVE, move it to HE as swap.hive and buy a HE token, the HIVE is "locked" in until I (or others) swap the token back into Hive.
Isn't that better as opposed taking Hive and selling it for BTC.
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That's the way I understood it to be.
Everything that runs on top of HIVE absolutely has to work like that.
Everything!
Otherwise, someone's getting a free lunch while someone else is footing the bill.
Advertisement on Blockchain level paid in Hive or HBD. Our Content on hive is one of the most valuable things we have and we give it away for free.
there are more than 1 million readers/month on hive. Would they watch ads, that paid in hive, hive would be 10$+.
Also, Content creators and token holders can earn more + burning for advertisement. That would be my solution/idea for it. I have written something about that yesterday.
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That is interesting. How do we go about getting something like this setup? It would greatly help to get some revenue flowing through here, and it wouldn't take much to turn the coin price around...
it can be built as I describe here https://leofinance.io/hive-167922/@urun/hive-advertisement-system-on-blockchain-level , important would be to accept 1 standard for the advertisement.
In general, there are 2 ways.
First: Posting key + add space would be placed in the advertisement area on content ( see my posting). On the later Version maybe an advertisement key with really low permissions, only for ads.
Or second, the advertiser buys the add like a custom JSON
image link ( banner) + target URL + keywords ( tags) could be looks like
add: url.banner.jpeg, HTTP://example.org. Tag: Blockchain , crypto , .... Blacklist: // Bid: 20 HDB, Date: Begin:_________ END:________
and with an advertisement standard, it can be used from the front ends.
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BEER.First HIVE needs to ATTRACT ATTENTION. It can do that in a few ways. But the one way it CANNOT DO THAT is by the current model where it thinks CREATORS are going to come running here when in actuality CURATORS (more accurately: blind voters/people that don't even look at the content) are getting the better reward, without the work.
So the system needs an overhaul, or bitch, forever stay niche.
In a nutshell this is how I view growth and sustainability:
So, what I conclude is that HIVE MUST BE THE MULTIPLIER!
Really, it's the ONLY WAY Hive can ever regain it's price.
As a multiplier it would be the base incentive to greater rewards from all operations.
The system however, doesn't even have the tools to gain, let alone retain attention. So before these big dreams can materialise, people need to realise that this is NOT the greatest blockchain. WHY? Whoever believes that does so because they're committed. A person analysing it honestly without bias however sees all the flaws.
The most crucial.
So as you've rightfully pointed out, Hive is actually slowly amputating itself by giving life to projects that go on and succeed (which IMO is not many, but people celebrate anything as a "DAPP"). This HIVE thing needs an overhaul or just giving birth is not healthy.
She either goes broke, descends into misery, or both.
Don't you need Resource Credits to transfer Hive-Engine tokens? In that case it works like SMTs.
But I'm not sure let me know if you know.
Interesting point. I have no thoughts about what HIVE Engine does or does not to the HIVE price. As you, I thought we would get SMT, but indeed, I read the same: maybe smart contracts and no SMT with the idea when supporting smart contracts, no SMT is needed anymore. That said: when going the smart contract route, it seems to me it's gonna be more difficult to onboard new tokens, since a smart contract needs to be coded and protected against hackers, while through SMT, people with no knowledge how to write/code and maintain smart contracts can launched tokens. Why not both, is a question that runs through my mind.
Regarding value of HIVE. From the HIVE stats circling in our HIVE community, it shows more HIVE powerdown over HIVE powerup. We can also see more HIVE transferred to Exchanges than HIVE coming back from Exchanges. Could it be just that what drives HIVE prices down? Could it be HIVE is also an incubator for none-crypto people, and once they got some experience at HIVE, they powerdown and use HIVE funds to get into other crypto projects? Recently I was reading in a few posts, HIVE is the perfect incubator for applications. When HIVE functions as an incubator for none-crypto users, and only as an uncubator, I have the feel HIVE can go down the drain in terms of value of the token. Being an incubator is cool, but long term it doesnt add too much value with more and more chains in the market offering similar features as we offer with HIVE: free and fast transactions.
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We need more Hive Engine games to adopt HBD in addition to their own tokens... For example, CryptoBrewMaster already use HBD for some game features.
It is very easy to hoard game tokens using multiple Hive accounts and then dump them bulk (en masse) on Hive Engine and that will crash value of both the game token and HIVE as people continue to cashing out the HIVE they get from selling the game tokens.
I'm blown away with engagement on this post!!
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Lot of good stuff in here, thanks for sharing! I do agree with you that we need revenue coming in otherwise the days are numbered. What was your idea to bring in the revenue? Ads?