The reward system on Hive serves stake distribution better than rewarding high-value content accurately
When it comes to the main tokens the Hive blockchain is at its core a distribution system. Hive has DPoS as its consensus mechanism with high consensus witness rewards. Content rewards serve as an additional source of inflation counteracting the strong tendency of DPoS toward centralization and as a compensation for content creators and curators for creating value. The problem is, however, that while the distribution works pretty well (at least much better than on most other blockchains) too little of the value created by content creators is not captured. What that mean is that it is not reflected in the price of HIVE.
Misaligned incentives hamper value capture on Hive but less in Tribes
Capturing the value of the mass of content accumulated over the years requires a mechanism in place and such a mechanism is completely missing for HIVE. There is the possibility of the front ends selling ad space and for HIVE and burning the tokens. But the problem for HIVE is the ownership of the front ends being separate from the ownership of the Hive Power and thus control over the chain where the content is mainly stored. What incentive would a particular front end have to not just keep the money earned from displaying ads instead of burning HIVE bought with the earnings from the ads? There is a clear misalignment of incentives.
Tribes with their own tokens do not typically have that problem. That's because they can operate to a larger degree like social media companies with a more centralized leadership without putting chain security at risk. They also typically use a single web front end with the people owning those front ends having strong incentives to use the ad revenue for buying the tribe tokens off the market and burning them to boost their value.
Share some ad revenue from old content with authors and burn the rest
I believe it is more likely that virtuous circles where rising token values lead to more usage and more and better content, which in turn lead to more ad space bought and more tokens burned are more likely to take place in tribes than in Hive itself. The relatively high centralization of stake distribution, which would be dangerous in Hive Power, allows for changes in the protocol to be less politically problematic. Development will be potentially faster for different tribes.
Images like this should capture value through ads with most of it burned and some distributed to the author.
I did not yet touch on the problem of value capture for old content. In my opinion, that could be helped by sharing a portion of the ad revenue generated from a post with the author. That would incentivize the creation of high-quality posts with long-term or timeless relevance. The best way to do this would be to buy the tribe tokens from the market with the ad revenue, distribute a portion of those tokens to the authors and burn the rest.
Posted Using LeoFinance Beta
Yep they need some better solutions here that is for sure. But compared to the alternatives its still the best system around.
That's very true. There is in nothing in existence better than Hive built to do the same things.
I didn't really understand the more technical aspects of this article but I've always thought it would be nice to earn on posts longer than the 1 week period. Now that we're seeing different platforms earn ad revenue a second token based on ad share revenue or even traffic views could help with this as well. A well written blog article with good keyword placement in the search engines can generate a ton of traffic.
I think the burning of tokens bought with advertising revenue will work very well for LeoFinance and other tribes. But any Hive front end could do the same. Trouble is all the front ends can show any post they want and pocket the advertising revenue.