DeFi the Savings Wallet and Supercharge the Second-Layer?

in LeoFinance3 years ago (edited)

I remember taking this shot. I remember the day very well, but the days to follow became a blur. It was taken on the day my daughter was born and, the day I almost lost my wife. Many people have faced these kinds of days, some people are luckier than me, some people less so. I prepared for the day knowing that there was a risk, so I did what I have done for quite a while - I imagined the worst of the worst in an attempt to prime myself just in case it happened, but I still needed to act. It isn't a fun practice, but it has been effective in dealing with a lot of negative over the years.

One thing I have never thought that much about though, is the inverse, where rather than the worst case, I spend time deeply imagining the best case scenario. I think this is because I have a pretty good understanding of the worst, as there are pretty well defined floors - but the upside is all an unknown. What's the biggest number you can imagine? What about that number, plus one?

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On this note, I was thinking about the recent rise in price a little and what that might mean for my own future. From my perspective, financial success isn't a big lottery win, it is the ability to own and have access to several small wins that can keep on trickling in, hopefully to the point that I do not have to worry about money. I live in a very expensive country however, so what is enough is relative to circumstances. Perhaps one day my family will move, but that won't be for a long while I suspect.

Hive is pretty cool if looking at it from a way to generate various trickles of incoming value, of you consider that there is the ability to post to earn as well as voting for curation. I used to think that curation wasn't really worth it and I am still very bad at maximizing stake, but the risk of staking does come with the ability to generate some income. No one should ever forget that staking on Hive has a cost, which is why so few do so, as they can make more with the same value elsewhere. Until they can't.

Curating is Risky Business

I am one of those idiots who believes that Hive is highly undervalued and that in time, we will see an increasing floor on the price that will change the entire platform socially, as well as the economic capabilities users have. Currently, the feed price is at 25 cents based on the 3.5 day moving average of price, which gives me a vote of 2.50, 10 times a day. However, this allows me to earn about 1200 HIVE in curation a month, which means at the same price, my curation return is about 300 dollars a month.

This probably seems like a lot to some people, but as I said, there is a cost to this opportunity and if you consider an alternative where instead of putting it into Hive stake, I bought Bitcoin, Ethereum or put my earnings into mining pools instead, you can image there is a pretty high cost indeed. As said - Do not be jealous of people who are getting curation returns, as it has probably cost them a lot of opportunity to do so.

But, the reason people do it is that it allows them to have some influence over the platform governance as well being able to reward members of the community that they enjoy. They take part in this side of things (obviously not all take part well) because they hope to be able to influence the platform to improve the experience, the community and in doing so, the price also. If that floor price raises to for example 2 dollars, Hive will have a billion dollar market cap and instead of 300 dollars a month in curation, it will be worth 2400 dollars for me. That is almost my wife's salary covered. Of course, to keep that similar level, it would mean not selling my stake, which would be technically worth around 400K dollars. This creates tension between points.

Oh, by the way, a billion dollars does sound like a lot for Hive to be worth, doesn't it? However, a lot of people believe Bitcoin will reach a million dollars a coin one day. At that level, Bitcoin would have a market cap of around 20 trillion dollars, three times larger than the largest managed fund in the world, BlackRock. If instead of 2 dollars we said 4 dollars a HIVE, the market cap would be about two billion, which is 1/10,000th of the value of Bitcoin at a million dollars, 0.0001% of it.

At that value, the curation would be 4800 dollars worth and my account 800,000 dollars worth. Is that a best case scenario? That would also mean that 2000 Hive would be getting 48 dollars a month in curation. Yeah, I know, we seem a long way away from 4 dollar Hive, but that 2000 Hive Power is currently about 600 dollars on the open market, which would then have a payback period of six months at that point, but in the meantime, it would be earning Hive actively through voting, meaning that if it took a year from today to get to 4 dollars, that 2000 would earn about 300 more Hive in curation along the way, worth twice that of the buy-in. But, none of this is stable, so it can't be relied on, which is why there is a high cost to powering up to take advantage.

Adding First Layer DeFi

But, new capabilities are coming too, with more DeFi products entering into the space and if Hive starts to move, additional income streams will open up to use stake in new ways.

One thing I would be interested to explore is the use of the savings wallet as a DeFi pool wallet, where an account can use that as collateral, whilst still maintaining account control over it. It is better than it just sitting there doing nothing liquid and it would allow for the staking of liquids without having it actually able to draw on the pool or act on governance. That would likely attract some Hive back from the exchanges and could be leveraged by second-layer tokens, giving them utility. We already have a decentralized network, we already have a lot of holders and a lot of liquid out there, we already have the security on the blockchain, internal markets, exchange listings and feeless transfers. Still your keys, still your coins. Shouldn't this be a no-brainer?

While many people do not see the point in buying Hive, they do not yet recognize that Hive isn't a token like most others, it is a highly versatile token that can be applied in many ways to generate value. Not only that, it is on a network that is making it increasingly easy to build applications upon. So if, you imagine that the staking rewards in a DeFi wallet could earn tokens that can then be used in applications on the Hive blockchain or, integrated in cross chain solutions at very, very low cost, I think that the usecase of Hive as a platform increases to .... yeah, there is no known ceiling - Let's see what is up there.

While I don't have the technical knowledge to build on this idea or shoot it down, I would appreciate if people do spend some time thinking or perhaps sharing it out to those who might be able to investigate it further. I do think that we have all the tools and skills available to do something like this now and do it well, we just have to gather the will.

Taraz
[ Gen1: Hive ]

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I have to agree, Hive is going to go place, where those place will be is an unknown. One thing about the people/users on Hive Block Chain, they have many eyes and all of them looking to the future. We are almost at the one year anniversary of the Hive Split, it will be interesting seeing the post of how well/bad Hive is doing compared to steem, I hope there are a few of those type post anyways.

I have slowed down on my powering up, I have been running the 50/50 option. I used to power up everyday, but then I wanted to buy some H-E tokens, and then it was saving for the Big Bee Power up day. Still I would guess I power up about 80% of that 50% not auto powered up.

I listened to the Dev Chat that Howo post this morning, from what I heard HF 25 is still going to be working the kinks out of the foundation layer of Hive, no talk to speak of about reward pool manipulation, that is always good news, get the foundation solid first. RC delegations/pool should be in HF 25, still some talk about the dead voting and fixing the witness vote issues, and the DHF voting. Those three things alone could have enormous impact for Hive. I wasn't able to really follow to well the talk about lite accounts, but it seems they would actually be more expensive in the long run than regular accounts.

Nothing is written in stone, but yes a nice steady rise would be nice, now if we can maintain a $0.30'ish price for a week then another creep up the ladder to say $0.45 would be nice, maybe Saint Patties Day for a $0.45 price.

it will be interesting seeing the post of how well/bad Hive is doing compared to steem, I hope there are a few of those type post anyways.

Most will focus on price - which is not an indication of health at all.

I haven't listened to the talk, but I probably should. I think the advantage of lite accounts I can think of is that they do not have to take a name, they can be a number. This would be good for applications to use and they could swap them between users. But, there might be better ways, like an account token that attracts value, not a full account with wallet etc.

If you remember 2017. Steem went from 6 cents to 2.80 in 8 weeks. Will it happen again on Hive?

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Not sure on the price rise, to me it still feel a bit like fallout from that spike, but with the HBD price to Hive ratio, we may be on an actual price rise. I kind of do hope for a nice jump in price, not sure how it will effect me, but it will be fun to see.

It is always fun to see how things change on the up - also the drama on the down :)

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!ENGAGE 20

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It would be good to have some use for the savings wallet. Something beyond its current non-use.

But can we act quickly enough? Will we ever act quickly enough to ride a wave. Or will ideas that sit firmly out of the box be poo poo'd as they often are.

This or something similar or something would be a fair old shot in the arm!

But can we act quickly enough? Will we ever act quickly enough to ride a wave. Or will ideas that sit firmly out of the box be poo poo'd as they often are.

This is my fear. We were meant to be ready for the bullrun - here we are, in the bullrun. Ready? There has to be more to Hive than price action to drive interaction.

Totally agree. Nothing muhc has changed. And here we are dependent on price for action!

I think that is a great idea to look at the absolute best case scenario. I totally agree that it is hard. Difficult to imagine infinity, but not that hard to imagine zero. We can can put a value on loss. I'd be okay with a little more than a trickle of passive income from Hive. Maybe more like a steady drip!

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A steady drip would be nice. I would love to show up for work knowing that I am doing it because I want to, not because I need to. =)

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Preach it!

Taraz, thoughtful post. I think we talked briefly about funding that proposal about the loan. I am curious how this pans out.

I don’t know if you have seen aggy’s post about Hive Engine LP. They are introducing smart contracts as soon as this Friday :)

It is going to be diesel and without the gas ;)

I am excited!

I have since the H-E LPs, but does that create a sink for Hive? I think it would be interesting to be able to sink a portion of my Hive into savings and use it as a DeFi hot wallet of sorts. A contract to put calls on portions of the Hive in there that could be used to enter into for example, the H-E pools. Wouldn't this work?

I am excited too :)

Not a sink in a traditional way that you are thinking. But it does take a lot of the native token out of circulation. If rewards are high there is no reason for the user to unstake from the liquidity pool. Please look at pancakeswap at Binance smart chain. Which is a ETH clone but MUCH lower fees. It's transaction vol is now higher than ETH. That is saying something!

Full disclosure: I am invested in Cake and HE model is influenced by BSC and Pancakeswap

Please look at pancakeswap at Binance smart chain.

I have staked a bit of usdt using this on autofarm - I have no idea what I am doing, but it is there doing it :)
I also bought some cake, but unsure if I should stake it anywhere - at the mo it is sitting on Binance.

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Oh no. You got stake them :)

Hook up BSC on Binance smart chain. Look for post I did about 20 days back. I have step-by-step instructions

use of the savings wallet as a DeFi pool wallet, where an account can use that as collateral

That would bring many people onboard and invest and sit and see their funds growing. May be @leofinance can build it ?

Maybe they could, but they can't put it into the savings wallet I think. It would be interesting to be able to have all of the functionality behind one owner key.

I'll just quote your quote :)

One thing I would be interested to explore is the use of the savings wallet as a DeFi pool wallet, where an account can use that as collateral, whilst still maintaining account control over it. It is better than it just sitting there doing nothing liquid and it would allow for the staking of liquids without having it actually able to draw on the pool or act on governance. That would likely attract some Hive back from the exchanges and could be leveraged by second-layer tokens, giving them utility.

Surely this has to be given consideration, especially in the current climate.

Hopefully some bigger brains can input.

It could be huge, especially given the security of it and the attention it would bring to all other parts of Hive.

Hopefully some bigger brains can input.

I have enough room inside my head to fit another brain or two :)

Thanks for the tip!

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I think the apy loaning is coming to the network. I heard whispers of one user doing so.

Also I think the best case scenarios raise also need to look at competition, Hive was an early working model and it's great. But a fork from Steemit made two. No doubt in the future there will be more forks and more networks.

Competition will enter the market and new initiatives and blogging sites will start up.

Well done on your stack though, I did learn that there is a tax on earnings that don't exceed 20 Hive per payout.

This limits smaller accounts and prevents growth. As the hive price grows so to will that tax as 20 hive is further away from being reached.

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I think for it to really be successful, it would have to be part of the core functionality of Hive.
There are several forks of Steem, most have no developers that can build on the blockchain - which is a bit of a problem, as they end up with only a condense and not much else.

There is no tax, there is a curve and that curve can be and likely will be removed in the near-term future. It was part of a package to curb abuse of various kinds and it worked well enough that parts of the package could be removed.

I understand the concept but what's missing is a top. There needs to be a curve that prevents abuse at the top end from people who stack.

Either way, great work on the future projects coming out and the changes implemented by witnesses to make change in progressing the block chain.

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The curve at the top to stop abuse is through downvotes. It has been effective enough that the curve at the bottom could be removed.

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I think that it would be a lovely thing to be able to earn a living doing what you love to do:writing. I would love to see that happening for you
!ENGAGE 20

I am in the same boat as you as there is a cost to staking in missed opportunities, but believe the opportunity here is far greater. I think I have 1/4 of what you have (haven't checked) as you grow so quickly as we can see how things get compounded the more you have. This is a beautiful system and look forward to a stable $4 Hive sometime soon hopefully.

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I think there would be a lot of value capture to bring defi onto Hive and leverage the security of the owned accounts. It would make the place attractive to pure investors, plus it could help build second-layer support. Might be a lot of fun :)

I did see some stuff on making Hive into a mini Ethereum offering defi. This could be really big as there would be other use cases for holding Hive.

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Especially if it is on the already decentralized layer :)

Isn't hive engine "sort of" defi?

The De is for decentralized, HE is not yet, but getting better. However, I think it would be valuable to have a HIVE sink for defi, as it underpins the infrastructure.

I thought Hive Engine had witnesses now? Not disagreeing with you on the HIVE sink, I also hate my sleeping coins.

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I could say just started in hive but I realize it is a fairly large ecosystem and it is constantly updated, yesterday I discovered through an article from a community partner that they have a platform to tokenize NTF art. I see a lot of potential.
As you say, the DeFi and the possibility of making loans backed by what you have on the platform is great.
In the future, I see the arrival of many people to the platform, wanting to know and join these communities of finance, art, technology, etc.

Hi @tarazkp hope you are online,
I have couple of questions about hive, kindly reply if you notice this comment.

  1. How to undo delegation?
  2. what are the best accounts on hive to delegate?
  1. You can undo delegation from the wallet in peakd.

  2. Depends. If you don't have much Hive Power, I suggest keeping it and using it to reward the people and content you like. In fact, I recommend everyone to keep at least most of their power to do this.

I have about 200,000 power, I delegate 10k to Leo.voter, 10k to @ocdb. These have a return. The other 10k I donate to a charity account to help them build. Other than that, I keep everything actively under my control. Your vote is your voice, many people are selling theirs for what they think is profit, but losing in other areas because of it.

Thanks that helped. What is the recovery account in peakd? Should i replace it to Hive instead of steem? in permissions. If I change Am I going to lose steem in steemit account? Can I transfer steemit funds to hive? Am i gonna lose them if i change my recovery account to hive?