Banking is an as yet unexplored area of finance on Hive
- Banking in the decentralized sense is a bank created by code, which exists to serve it's customers and provide them financial tools the world restricts to certain people.
- In what seems like another lifetime I created an idea of a bank called the Sun, and it's token was called Honey. It was a fork of MakerDao on Hive. It served one purpose custody of assets provided as collateral for loans and it printed a token called Honey.
- Honey was a stablecoin pegged to the dollar.
- This digital bank would provide overcollateralized loans to people depositing cryptocurrency Hive and HBD in the bank.
- This woud allow you to save Hive in the bank and take ouit loans in Hive Dollars.
- This would normally require an EVM layer like Ethereum or Binance Smart Chainm, and of course smart contracts.
- But here on Hive we don't have an EVM and we can't clone smart contracts from ethereum or Binance Smart Chain to recreate things here.
- Here we need trust to do these things, but one day we may have some trustless systems.
- Here we have staked Hive called HivePower, which can be seen on the blockchain and in wallets.
- You could run a loan program with a clear transparent ledger and proof of assets would be straight forward.
- It would require some trust, but you could see the funds locked up in your vault and you would have to trust the funds would be returned if you paid back your loan.
- I have a six year history of running projects and returning funds, but these things are still hard to get off the ground.
- But lending is coming to Hive, and I will bring it.- It won't be as trustless as Makerdao..yet.
- But it will allow you to save your Hive in an account and you will be able to verify it isn't being invested in anything risky, but you can still borrow against it.
- I am still working out the details in my head.
- It will need to provide a service people want, the ability to accumulate Hive and spend it too.
- This requires locking up your funds in a vault and borrowing against it: spendable HIve Dollars.
- I still need to work on the business aspects of this.. I need to determine how much interest to charge on the loans, obviously it needs to be small enough to make this atractive, but it needs to cover costs and at least make the operation break even, although a small profit would be nice.
Hive Lending : How will it work?
- 1st buy 100 dollars worth of Hive.
- 2nd sign a loan agreement with HiveBank or HoneyBank I haven't picked the name yet.
- 3rd get 40$ in Hive Dollars per 100$ of Hive deposited in HiveBank
- 4th track your deposits on the blockchain by auditing HiveBank as all Hive would be powered up in the HiveBank account.
- Pay back your loan plus interest and get your Hive back.
The loan agreement
- You are allowed to borrow 40% of the current value of your Hive as Hive Dollars.
- Your Hive will be powered up HivePower and used to curate content on HIve.
- You get your Hive back by paying back the loan.
The loan agreement stipulates that HiveBank will hold your Hive as powered up HivePower until until you payback the loan. it in a Honey vault, and it will be powered up as HivePower.
I am open to ideas and discussion how this could be incentived.
What do you think?
I think it could work but there needs to be a way to guarantee the interest and there needs to be a smart contract. I remember someone mention it before but that project has kind of gone nowhere (Hive Loans). I even invested a bit but I have no idea where that project went.
I think I would take the Hive Dollars and deposit them in a Hive Account Wallet for the interest there as a source of income to fund the project, and stake the deposited Hive to generate curation to support the program. I would represent 3rd party risk to depositors, so eventually I would need to adapt a MakerDao type situation, but potentially could work something out with a smart contract if EVM or similar capability came to Hive. .
I am not sure, but i need some clarification.
From the 3rd point, you said "get 40$ in Hive Dollars per 100$ of Hive deposited in HiveBank".
Why does it sound more like a savings terms than a lending terms ?.
I am being curious and i will appreciate some explaination.
Incredible post by the way.
Thank you.
The topic is complicated, and I am still thinking it through.
But in answer to your question:
If you purchase $100.00 worth of Hive at 40 cents it would be about 250 Hive. Then you deposit it on Hive Loans and borrow a maximum of 40% of the value of your deposit or 40$, and the loan is paid in Hive Dollars, this places a hold on your 100 dollars worth of Hive, which is released when you pay back the loan.