Some ramblings
I was on my bed, thinking about things that I am going to talk about in this post. But also as I couldn't sleep and got up, I saw the post series by @chiren. Those are also good reads, and while we share some sentiments, I am going to a different direction with my post.
You might agree or disagree with this post, but I am sure you will come out from reading this post with different perspectives on Hive.
Reward Pool
Let's get straight to it, Hive pays for everything with inflation and majority of this inflation is allocated to the reward pool. As the wisdom of yesteryear will tell you, this is supposed to be a way to spread Hive stake around.
In reality, reward pool is currently the biggest failure of Hive. Some people will disagree with this, they will tell you the reward pool is a good thing, it brings people to Hive.
Sure, it does bring people to Hive and it is also biggest reason for people to leave Hive. Disagreements on which content should be rewarded, who is scamming the blockchain, or fuck this guy in particular. It doesn't matter the reason, it causes people to leave.
Rewarding content might have been a big advantage of the Hive in the past, but in current social media paradigm, it is no longer a unique feature. Hell, Hive's model could be one of the worst ways to monetize social media content. When you can earn from your content as long as someone sees it, why limit yourself to a 7 day window after which you almost certainly earn nothing from it.
And spreading stake around is another massive failure. More accounts have a KE ratio of > 1 than people that have a KE ratio of < 1. For every account that have a KE < 1 ratio, there are 2 accounts that have a KE > 1 and this is for active accounts. If we include inactive accounts, I am pretty sure that number will climb even higher. Even the screenshot from hive.io is a way to prove this, there are more liquid Hive than staked Hive. If stake was spread around you would expect this to be inverse.
We can further expand why it is failure, even whales are voting @buildawhale burn comments or @hbdstabilizer posts/comments. These votes are actively preventing spread of the stake because they know if they don't vote these post they will get diluted. They know if they don't vote, rewards for other posts which they don't want to get rewarded will increase. Correct me, if I am wrong. But I am going to call out, what I see. (For the record, there is nothing wrong with them doing this. This is their right as stakeholders. I am writing this to illustrate the failure of the reward pool.)
DHF / HBD
There is nothing to say about it, other than what a waste of resources that it has been. But it is also good to see that people are becoming more prudent about DHF.
But I also seen some comments on HBD APR. Current price problems of Hive does not come from HBD APR. You can argue it is coming from HBD, but that is due to 50% liquid rewards we are giving to every post/comment in HBD. This is the HBD that gets sold, and converted by hbdstabilizer not the HBD in the savings. At some point we should cut APR, but it is certainly not this time when you do not want a flight of capital to hammer the price of Hive even more.
Solutions
We need a decentralized ad network for Hive, that would generate revenue and distribute to the posts/comments and frontends that earn views and phase out the reward pool this could be done incrementally. I know this is not an easy task but this is precisely a sort of task for DHF.
Inflation that were going to reward pool then can be either eliminated completely or redirected to holding staked hive.
We can put a conversion fee on the both sides of the conversion mechanism. Currently it is just HIVE -> HBD. This is what tether does, if you want to redeem USDT to USD, you pay fees. But for this we would also need to reduce the conversion fees. It is too steep at 5%. A 1% fee both ways would be more sensible.
Feel free to tell me how stupid I am to suggest these things, if you feel like it. Thanks for reading. :pained_laugh:
I thought about this recently. Yes, we are overpaying for HBD, and lowering the percentage might make sense. But what if, when we lower this percentage, people cash out their HBD on Hive and withdraw their money from the ecosystem? Would this benefit us or harm us?
It would be harmful on the short-term, and neutral/slightly positive on the long-term. Because in the end, HBD interest does print extra inflation. But the times to reduce it is when times are good and when to increase it is when times are bad. We've been doing the opposite, we made Hive interest rate 20% when times were good, and started cutting it as times get bad.
We want to get people to buy Hive off exchanges and lock it up as debt at the moment. But we should also reign in the other spending like DHF for this to succeed.
And when the price recovers some-what we can gradually decrease the interest, and not this current let's cut the interest rate by 5% shenanigans.
Also as a large HBD holder, all this talk about HBD interest made me stop bringing in new cash to save in HBD.
It will definitely be beneficial in the long run, but I'm not sure. In cryptocurrencies, a small snowball can grow into an avalanche. You're right about what you said; it would have been better to do this when things were going well. Although, at that time, it could have been seen as the reason for the upward momentum to stall.
Probably, we would still had a runway to cut it and bounce back. Now, we don't have that runway. And conversions from HBD to Hive would not caused ton of inflation. Because in essence, inflation from HBD is based on Hive price. When Hive was 1 USD then all the HBD would have amount to 11M Hive. Now it amounts to 110M Hive.
We want people to convert to HBD at these times and remove ton of Hive from circulation, and when times are good we want them to convert from HBD to Hive and reduce our debt.
So if there's no content, because no reward pool, who is viewing the ads? Stakeholders that have no reason to be here?
Rewards will come from the ad revenue, instead of inflation. Your posts/comments will still get rewards and some part of it will be even sent to the frontend that was used to view your post.
And I am not saying we should get rid of the reward pool at this instant, it should be gradual. If ad revenue is making x amount hive on average we should cut that much from the reward pool and when revenue from ads eclipses the reward pool, we can safely get rid of it.
I'm no whale but I frequently vote for burn posts because I can't find enough stuff I like enough to vote for. I also tend to avoid giving significant votes to people who are just powering down everything. It's hard to distribute hive better when there are so few to distribute it to. To be fair, content I like certainly isn't the only good content on hive but I'm not going around voting for stuff I don't pay attention to.
As far as the reward pool and rewarding content with it, I mean this is still the fundamental use case for hive. I don't think you can do away with it, at least not now. That isn't to say it can't be improved.
As far as ad revenue, I think that has been experimented with by a couple of front ends. My understanding is that It didn't make enough money to be worthwhile.
I think that conceptually the DHF is a good thing. However, I think there needs to be some algorithmic cap on the rate of spending. Plenty of others have written on ways to improve the DHF that sound promising.
And that is what I mean by it being a failure, most rewards that get distributed is just gets sold out and we end-up with our current value when you combine that with insane DHF spending.
And that is why we don't get rid of it immediately but gradually, as the ad network revenue picks the slack.
I think that was because it wasn't a blockchain level ad network, it was fragmented. With a blockchain level ad network, we can leverage all frontends for the ads. And iirc those ads were basically opt-in.
I am not claiming these are foolproof solutions of course, there could be better ways.
Rewards are actually a very small part of the hive networks overall inflation, its the DHF that costs the most.
That is false. DHF could be the one that costs the most but rewards are not very small at all. Hive was expected to have 5.5% inflation this year and 65% of that is rewards pool. So around 3.5% of inflation is Author/Curator rewards.
If you take hbd inflation into account which has to be converted to hive, the rewards are a small percentage.
There are bigger problems for hive right now than the reward pool, the dhf is being sbused and 15-20% on hbd was never going yo be sustainable long term. A run on hbd right now would fuck shit up massively, a few posts wont.
No, they are not.
https://peakd.com/dhf/@threespeak/how-to-reduce-hives-inflation-problem-our-new-dhf-proposal-voting-criteria-hbd-apr-and-a-proposed-value-plan-sop
Here you can see the inflation calculations for both DHF and HBD interest payments.
In order inflation would be
So deffo not 65% of the overall inflation in 2nd place from that then, and how much overall @dalz ...the reward pool is not the problem and its the one thing that makes hive attractive other than splinterlands and the hbd interest. The dhf and hbd interest are the problem. And bear in mind im not a poster, not intersted in making money from the pool, been here a while though and dont want hive to go down the pan.
live 0.01% every 250k blocks or so? :p
That is just reducing inflation, not phasing it out :P
peakd has had adrevenue running for a while now, it is still nothing according to them and that's after all the extra traffic posh is creating
i don't understand how people think we should just remove inflation rewards when it's the one thing that makes this blockchain unique from the 2150 others instead of putting in some effort to curate better both up and down
Isn't that opt-in? Because I've seen 0 ads on peakd.
Because it isn't unique anymore. Its uniqueness was in the past and we are clutching to this it is unique narrative.
You can get paid on X, you can get paid on medium, you can have a substack and get paid there, you can get paid on Patreon, subscribestar and so on. And all of these, accomplishes this better than Hive's reward pool.
Reward pool is just a circlejerk at the expense of people who are putting money into this chain.
That's no where close to what hive rewards are, we can have that on top of hive rewards. You're talking about adrevenue and donations, not stake i.e. shares in a company.
You saying it's "just a circlejerk" undermine's everyone's efforts trying to use it well.
Because most people do not give a shit about the stake, they only give a shit about how much dollars they can get for that stake and that is what we tell people to bring them here. "You can earn rewards for your content." We are not selling the people the idea that they are going to "own shares" in company, we are selling them that they will get dollars.
Time to wake-up to reality of this.
Do you exclude people from your curation who is above certain KE ratio? If so what is that threshold?
Because throwing more stake at the expense of mine to people that don't want to hold that stake is not using it well in my book.
I vote burn posts as a direct counter to the insane DHF spending on projects that offer little to no value to Hive. There are other reasons as well but none of them are to "prevent the spread of stake".
Well, I would be happy if you elaborate on those other reasons as well and even if your reasoning for it is to counter DHF spending, it does prevent the spread of stake.
And for the record, it is not a callout to you individually.
For a couple of years everything I posted and everything I upvoted was downvoted by two large whales. This was why I stopped posting and part of why I stopped curating but a large part of the curation is because in some way I want to counter the massive sell pressure of bad proposals.
Appreciate it.
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