"Dry Powder" and the LHP Token!

in LeoFinance7 months ago (edited)

Since announcing I was powering "down and out" on the Steem blockchain, I have experienced "new life," in a manner of speaking, here on our Hive blockchain. As I have written about fairly extensively now, most of it is tied to what I am steadily learning about the "second layer" opportunities available to us all.

Source: @cardboard's introductory post and HiP Wallpaper

There is one "Captain Obvious" common factor in following up on choosing to invest in any of them. And what is that @roleerob? The old saying is - "it takes money to make money" ...

Where is it going to come from? Here is the answer, for me, as written in my "Money Goes Where Treated Best!?" post:

"... I have always fallen dutifully in line with the "Power Up! Power Up!" mantra so commonly heard. Resulting in no decisions to make about "discretionary funds," as there were none.

With some likely exceptions to be made here and there, that is now over for me."


[emphasis added ...]

Over. Done. Not doing it ... If you are going to chose a similar path, dear reader, you are going to have to have some "dry powder" - readily available funds for taking advantage of market opportunities in a timely fashion!

Source: Creator OpenClipart-Vectors on Pixabay

In the case of investing here into our Hive blockchain, that begins with its external HIVE token. Not its internal HIVE POWER token, with the 13-week "lock up" of its inherent value. There is no "Hold button," on market opportunities, while you wait for 13 weeks to go by ...

There is one problem with the decision to HODL HIVE however. HIVE POWER has inherent within its design the benefit of steadily accruing value, even if you do nothing more than simply HODL it.

  • Note: This benefit is what led to my original investment in HIVE beginning in August 2017!

But, does HODLing HIVE itself have any benefits? Beyond price appreciation (or depreciation, as this is being written ... 😒) in the marketplace? Nope! Nothing, zip , nada ...

________________________

Except for the benefit of having "dry powder" then, are we "on the horns of a dilemma?" Are we stuck?

Let's take a closer look ... 🧐

Introducing the LHP Token!

One of the indispensable and undeniable benefits of the free market is that problems create opportunities. In response to the "demand" for one, to "supply" a solution! And the solution provider benefits to the degree the marketplace agrees they have provided a good one!!

The problem I have described above is not unique to me. Much has been written about the limitations of our Hive blockchain's 13-week powerdown rule. Fortunately for me, at about the time this issue was showing up "on my radar screen," I saw @cardboard's post discussing Liquid Hive Power and introducing the LHP token on LeoDex.

Yes! 👍 Excellent timing ...

Here is a quote:

"You buy them, you get the HP delegation, 1 LHP = 1 HP delegated. No need to stake them, just hold (have them in your HIVE-Engine wallet).

If you sell the tokens, the delegation is lowered by the amount of the tokens you sold. Placing sell offer does not lower / remove the delegation, only when someone actually buys them from you."


[emphasis added mine]

While a lot of additional details are available in that post to those interested in taking a closer look, this captures the essence of the LHP token.

Gain all of the
benefits of HP
without

the 13-week lock-up
of its value!

Note: Technically, there is one very important benefit lost, which is covered later ...

What is not to like?

Here are some key details:

  • The new LHP token is linked through Hive Engine to the @lhp.app account on our Hive blockchain.

  • Your purchase of LHP tokens results in an increase in the Hive Power of the @lhp.app account. Which, in turn, is "instantly" (if possible) delegated to your account:


  • The available HP linked to your LHP purchases, for "instant delegation," can be found on the @lhp.app account's profile page:


  • If there is not enough HP to instantly and fully fill the delegation linked to your new LHP token purchase, then "... oldest delegation requests are filled first." (see introductory post for more details)

Since it is HP linked to your money, the delegation linked to your LHP tokens grows over time, due to Hive inflation!

Great, where do I "sign up" @roleerob? We have two options ...

Execution Options: Use @swap.app or LeoDex?

If you are not yet familiar with the functionality of the @swap.app account, dear reader, I highly recommend you check it out! This account's functionality is a great, great resource to have available to us in our "tool kit" here on our Hive blockchain!

Given all that has been written about LeoDex and Hive Engine elsewhere, I am going to just focus on a quick example of my own use of @swap.app, before providing some input on which of these two options to use:

  1. It is a simple one-step process, to convert your LHP tokens in your LeoDex wallet to HIVE, using @swap.app:




  2. The resulting conversion details are nicely displayed in this transaction showing up in your PeakD wallet, a few moments later:


Hard to improve on that! 🙂👍 While I had no need to do it myself, this is easily done in reverse, i.e. converting HIVE in your PeakD wallet to LHP in your LeoDex wallet, as touched on below.

________________________


Okay, then, should you use @swap.app or LeoDex? I believe the choice is pretty simple, based upon what you are wanting to do. There are two classifications:

  1. LeoDex is your choice, if you are wanting to conduct any sort of trading amongst the Hive blockchain's "second layer" tokens.

  2. @swap.app is your choice, if you want to move funds back and forth between your Hive wallet and LeoDex. See my example above!

    Note: On August 11th, @swap.app published a post with all of the details needed to transfer HIVE into LeoDex and buy any token, e.g. LHP, in one simple step! Costs no more! Saves time!

Want to move your LHP clear outside of the Hive blockchain to BTC or ETH? Two considerations, based on destination:

  1. Wallet addresses: On August 17th, @swap.app published a post with all of the details needed to transfer any "second layer" tokens, from your LeoDex wallet straight to a BTC or ETH address of your choosing. And it can encrypted!

  2. Exchange addresses: While Option #1 would still work, it is unnecessary and would cost you more in fees. Why? Because all of the exchanges on which you can trade HIVE have accounts on our Hive blockchain! Transfer your Hive to those accounts for free and exchange your HIVE there to BTC or ETH.

    Only if the fees of using @swap.app are equal to or less than the fees of your exchange, would it make sense to use @swap.app.

________________________


With the LHP token now introduced to you, dear reader, let's take a step back and finish up with a look at an essential part of its story ...

Market and Liquidity

If there is any common "complaint" about Hive Engine, it is that a relatively tiny market is being served by it. That is a "global" statement. Any particular token will invariably have some subset of those engaged in this overall market.

So ... How is the market for the new LHP token?

Source: LeoDex LHP market, as this is being written

Not looking too bad on the supply side, for getting "in." 👍

A little uhhh ... "light" on the demand side, for getting "out." 👎

While not ideal, we have to bear in mind this token is just getting started. Anyone with any experience at all on our Hive blockchain knows of the challenge of getting "eyes" on any particular subject matter. With that, we have no way to measure how widely known it might be at any particular point in time.

We can just assume, given it was only introduced less than 3 weeks ago, the benefits of investing in the LHP token are still fairly unknown.

________________________

So ... This post represents @roleerob's effort to attract "eyes" to the opportunity that the LHP token represents for all of us on our Hive blockchain. And, in doing so, improve the size and liquidity of the LHP market!

If you like what you see, dear reader, please do what you deem is in your best interest in giving serious consideration to owning some yourself. And passing the word on to your Hive network!

Closing

Wrapping up this post, I would feel derelict in my duty to provide all the information you need (to the best of my ability anyway) to make a well-informed decision, without coming back to the one benefit lost mentioned earlier.

And what's that @roleerob?

Buying the LHP token with your spare HIVE, instead of powering it up, results in a reduction in the number of MVests you have for voting in support of our all-important Witnesses! 😳 Not ideal, admittedly, but ... I think we can agree most of our decisions in life are weighing the pros and the cons, i.e. very seldom is anything 100% ...

From my perspective, this decision is really quite simple. I am going to hold the LHP token, as the benefits override this one downside. Particularly since I still have plenty of Hive Power and can't currently imagine that changing! It is simply a matter of deciding the % of your total discretionary HIVE which you want to have powered up (and locked away ...) vs. investing in the LHP token.

I touch more on my thinking on this split % question in my recent Is the Future Bright in Hive's "Second Layer?" post, if you'd like some more "food for thought" on it.

________________________

With that, I trust you have enjoyed learning more about an exciting new option for us to consider in the "second layer" of our Hive blockchain. I for one, am excited about it!

Source: LeoDex "Richlist" for LHP! 🤷‍♂

Putting my $$s where my mouth is, I am currently in the "pole position!" 🤑 I truly hope to see that change in coming weeks, as the word gets out!

I’d love to hear any feedback you may be inspired to provide.

Until "next time," all the best to you for a better tomorrow, as we all work together to build up our Hive Communities and add increasing value to our Hive blockchain! 👍 😊

Respectfully,
Blogger @roleerob
Hive "Dolphin" 🐬, LeoFinance "Whale" 🐋, & Man Cave "Dragon" 🐉

🐝 🍯 🐝


________________________

P.S. I am not a financial adviser. Please consider this post as financial information and / or opinion only. Please perform your own due diligence, in whatever manner you seems best to you, if you have found it to be beneficial.

________________________

Posted using LeoFinance and “immutably enshrined” in the Hive blockchain on Monday, 21 September 2020!
🌲 No trees were harmed in the publishing of this post! 🌲


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Thank you very much for the wealth of information in regards to LHP, I believe once more liquidity is available it might 🚀 maybe the addition of DEFI on Hive will help support that and well there we go if we don't ever get a lower power down and you are into that sort of thing you can power up and down as you please, .. of course considering there is liquidity a token's worst nightmare.

Posted Using LeoFinance Beta

Being a new token @chronocrypto, I've done my small part to help support growth in its liquidity. For the reasons presented, I really like the idea and hope it succeeds long-term.

Thanks for stopping by! (no BRO fist available ... 👌)

Posted Using LeoFinance Beta

outstandng post! Although I think for now I will still just power up the old fashioned way

Thanks for stopping by and letting me know you enjoyed it @tobedata!

"... for now I will still just power up the old fashioned way"

Sounds good to me. Free markets in action! 🦁🙂

Posted Using LeoFinance Beta

Thanks for putting all this together @roleerob!

This is actually the first time I have seen a comprehensive article that at least makes sense in terms of explaining the LHP idea.

You touch a bit on my primary reservation: Is it truly "liquid?" As in, if I have 1,000 Hive in LHP and decide I need to use the money for something, am I going to get a kick in the shorts when I try to sell those LHP tokens? Are they going to be marketable at anywhere near Hive parity, or will any potential benefit from having additional curation power going to be erased by a large spread?

Yes, I realize it's early days yet... so I guess we'll have to wait and see!

=^..^=

Posted Using LeoFinance Beta

Agreed @curatorcat.leo ...

"... am I going to get a kick in the shorts when I try to sell those LHP tokens? Are they going to be marketable at anywhere near Hive parity, or will any potential benefit from having additional curation power going to be erased by a large spread?"

... this is a valid concern. I raised it myself with @cardboard on their Discord server. And I see I could have addressed it better in this post. Specifically to your concern, he said he and his team would work to maintain a "buy wall" at $0.99 and a "sell wall" at $1.01. I even brought the image in this post to his attention, as it clearly shows they are a little short on the buy side ...

He referenced a 3,000 LHP sell order that needed to be handled and so they would expect to have their buy wall back up sometime tomorrow.

Overall, I have both a high enough regard for what I have seen of their work, as well as my appreciation for the benefits of what they are offering to go for it ... Crypto in general is quite speculative, as we both know. I am hopeful this will be a long-term viable token, given its structure.

Thanks for stopping by! 👍

Posted Using LeoFinance Beta

Just a small correction, the buy wall usually is at 1 Hive, had to lower it yesterday because there were sell orders at 1 Hive :) Not it's back to usuall Buy at 1.0, Sell at 1.01 Hive.

Okay, thank you for stopping by @cardboard and letting us know that. In my response, since I had not drawn it out adequately in my post, I was referencing what you wrote in yours:

"Currently the service is selling the LHP tokens for 1.01 HIVE and buying them back for 0.99 HIVE ..."

Buying them now at 1.00 HIVE sounds find to me! Anyone interested in your LHP token is going to be concerned about liquidity, as I am sure you can appreciate. On our side of a "mutually beneficial" transaction ... On your side? There will need to be sufficient motivation to keep it going, i.e. the spread between buy and sell ...

Hope it all comes together for the long-term!

Posted Using LeoFinance Beta

Good explanation about LHP. I already ordered small amount 😁.

Thanks for stopping by and letting me know you found this post useful @seckorama. Hopefully, with anyone interested banding together to do their small part, there will be a nice market for this new token and it establishes a bright, long-term future!

Posted Using LeoFinance Beta

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Bang, I did it again... I just rehived your post!
Week 24 of my contest just started...you can now check the winners of the previous week!
8

If there is any common "complaint" about Hive Engine, it is that a relatively tiny market is being served by it. That is a "global" statement. Any particular token will invariably have some subset of those engaged in this overall market.

So ... How is the market for the new LHP token?

Not looking too bad on the supply side, for getting "in." 👍

A little uhhh ... "light" on the demand side, for getting "out." 👎

While not ideal, we have to bear in mind this token is just getting started. Anyone with any experience at all on our Hive blockchain knows of the challenge of getting "eyes" on any particular subject matter. With that, we have no way to measure how widely known it might be at any particular point in time.

We can just assume, given it was only introduced less than 3 weeks ago, the benefits of investing in the LHP token are still fairly unknown.

Dear senior @roleerob, Do you mean to recommend investing in LHP tokens because the trading volume of Hive tokens is not yet large?

As I read your article, I guessed that the value of cryptocurrency is determined by the amount of market share and trading volume of cryptocurrency.
In the end, do you mean that cryptocurrencies fight against each other over market share and volume?

Does that mean that the tokens that occupy the most market and traded have the highest value?

I will do what I can to answer your questions @goldgrifin007. Be aware, however, a lot can be discerned from questions. They indicate to me that a challenge for you in both in the translation of my words to Korean, as well as a fundamental understanding of the Hive blockchain and the various tokens available to us, through its "second layer."

"Dear senior @roleerob, Do you mean to recommend investing in LHP tokens because the trading volume of Hive tokens is not yet large?"

No. As written, I recommend it to obtain all but one of the benefits of powering up HIVE, while avoiding the restriction of its 13-week powerdown feature.

"In the end, do you mean that cryptocurrencies fight against each other over market share and volume?"

This is a vague question. Fundamentally, "free markets" and the value of anything is based upon all of us making whatever decision seems best to us with whatever money we have - the demand side. "... fight against each other ..." touches on competition over suppliers for that money. They all, of course, hope we pick their value proposition over that of their competition's - the supply side.

"Does that mean that the tokens that occupy the most market and traded have the highest value?"

Again, a vague question. Market value is not necessarily based on market share, if you are referring to price. Sometimes, competitors will undercut price, i.e. offer more or less the same product, for a cheaper price. So ... As a result, they may obtain a greater market share over their competition, at the expense of their profits ...

Hope this helps some!

I will do what I can to answer your questions @goldgrifin007. Be aware, however, a lot can be discerned from questions. They indicate to me that a challenge for you in both in the translation of my words to Korean, as well as a fundamental understanding of the Hive blockchain and the various tokens available to us, through its "second layer."

Dear senior @roleerob, What is second layer?
Please understand first that I speak English at the level of elementary school students in America.
Most Koreans know that they can earn virtual currency for free by posting on the blockchain. However, they are not interested in the relationship and ecosystem of various cryptocurrencies and blockchains.

I think I will be able to understand your claim only by trading cryptocurrency myself.

Senior, I'm sorry I ask you too many questions. I will ask you questions carefully in the future.

"I think I will be able to understand your claim only by trading cryptocurrency myself."

Agreed @goldgrifin007. I "spoke" to you about just that on a different comment. I have not gotten a response ...

"What is second layer?"

Tokens built on top of the "base layer" of our Hive blockchain. They are dependent upon Hive for basic functionality. Then they can "do their own thing" from there ... Best example right now is the LEO token, which has just become the first "second layer" token to become more valuable than the HIVE token upon which it has been built ...

"Senior, I'm sorry I ask you too many questions."

No. You don't ... But, I have told you that before ... 😉