I was reading an article from the founder of d.buzz today about his mistakes in building the app and how it could have been done better.
The DBuzz Journey: Building for Freedom, Learning About Incentives
It's a great read and brings up the issues around the costs of running apps, rewards, incentives and purpose.
After spending 8 years in the crypto world I have seen hundreds of interesting projects bite the dust due to the time and cost it takes to run an app and running a web3 app just multiplies those issues.
One of the biggest flaws in building these apps is the lack of a business model when they start.
All of them launch tokens and generate hype but very few have any actual plan behind them or ways to generate money to make it sustainable in the long run.
Running any sort of app or project takes so much time and costs so much money that unless you are bringing in external money it will not survive.
When I first got involved in crypto and in STEEM, I saw huge potential in tokenization to enhance the way that we operate in certain industries.
Unfortunately since then the whole thing has turned into a huge casino with people trying to get rich as quick as possible at the expense of everybody and anybody.
It's sad that very few people are building on the original principle of crypto which is giving power back to the people and distributing wealth to the masses.
Hive has the technology to make that possible but so far only a couple of projects have used it to make a sustainable business while a lot of others have built on the technology but have not tried to become sustainable.
It's the whole reason that our token price is down so low when we have some of the best tech out there and a smart and creative community behind the scenes.
Splinterlands generate revenue, Leodex does the same and that is it. Everything else on the chain drains value rather than adds it. Now we can take a certain amount of cost as necessary for everything to run such as keychain and devs ect... but as a community we should be trying to move the whole eco-system toward a net profitability with our apps and projects buying more hive than is hitting the market.
Hive roundtable.
I imagine it looked a little like this..............
I know that there were related discussions around the DHF and how money is being spend but it needs to go deeper than that. It's great that we can help fund projects but there needs to be a turning point for every one of them where they generate revenue and start buying hive back from the open markets and support the eco-system that has supported them. It should be a priority for every single project here to add value back to the chain and I said as much in my comments.
The heart of the problem is that we see huge amounts of hive hitting the market and driving down the value of the whole eco-system that we have invested in by a few individuals, with limited results and no transparency.
If this were a company instead of a community blockchain, heads would roll at the waste of funds we have seen year on year.
Funding is good but it should be very targeted for a tiny project like hive and it should not be thought of as a constant source of funds. Projects should get nothing without having build at least a minimum viable product and a have a multi year plan showing how they will complete the project and become profitable to repay the eco-system. Funds should be received in stages and withheld if targets are not met.
Projects need to become sustainable and generate revenue. Nothing on Hive is profitable and sustainable bar splinterlands and leo. Every app should be doing something to bring in external money and soak hive up form the market or we will disappear. Our community cannot soak up the selling pressure from the rewards pool and the DHF and should not have to. It's a small community that has already bought up so much of the market supply over the years but funds run out. We have also seen so many users driven away, projects driven away and other just leave through indifference or other reasons. The community is shrinking and the supply is growing. A recipe for disaster.
Development funds are vital but should not be handed out without extremely detailed plans plans, milestones, regular progress reports and that we make sure nobody is working on the same projects wasting more funds.
I do think that visibility at crypto events is one of the good uses of the fund when we have brilliant representatives like crimsonclad that can showcase the benefits of building on hive and have the knowledge and personality to be front and center of our community.
I know that GP is in charge of value plan but somebody needs to be doing this role for all proposals and pushing projects for real plans and gatekeeping the approved funds if strict targets are not met over the period of the proposals.
Nobody is responsible for what are huge sums of money pouring out of our community funds and that is a huge issue.
With all of our talented devs and community members we should not be depending on market sentiment to determine our worth. We should be driving the token value through our own actions.
Content and data are valuable but we have spent years here creating so much but giving it away for free. Leo have built a dex that generates funds and buys their token. They have built cross chain market makers that do the same. Splinterlands have hundreds of thousands of accounts sold to users but what have ecency, peakd, vsc, 3speak, actifit, worldmappin done to generate income after years of funding other than soak up more funds from the pot.
The mentality is wrong here and worse again you have the likes of hivewatchers receiving funding and policing the "Decentralized permissionless chain" getting $95 a day to drive away users and piss of a lot of people who could become part of the eco-system. They have been paid almost 100K as part of their latest proposal. What could have been build for that money that would positively effect the community instead of shrink it??
This is not to be considered as a negative rant as there are so many people putting in so much good work but we need to change the mindset if we want hive to survive and to grow.
Apps need to think like any other business and plan to survive on their own merits and to grow as a business. They can't be funded indefinitely by the chain.
I would also like to see some of the devs here building profitable projects or tools that people in crypto are crying out for. We have the talent working away in blocktrades, keychain, ecency and the community so why not find ways to tap into the wider crypto market, take a cut of the business and bring it back to the fold. If you build things that people want and need they will have to join hive to get them. If you can make a profit doing that it helps everyone.
Can we build profitable apps?
I think so.
If we tokenized reddit it would be profitable form ad revenue. The same for twitter, facebook, youtube or thousands of other sites because they have to. The only difference on to hive based apps is that they earn because they have to. Otherwise they would fold straight away without a fund to cover costs.
There are some projects in the crypto world that can generate revenue by building services that people want and charging a small fee to use them. Not many but the ones who can are the ones that will lead the line going forward, that will survive the next bear while others fade away.
I know that peakd trialed ads this year and I was a huge fan of it. I never saw the numbers but they did tell me that the money earned wasn't worth the disturbance they created on the site but I think that we can do better.
If you read the post at the top of the page it goes into incentivizing behavior.
The ads didn't work as the traffic wasn't high enough or from enough high quality sources. This is fixable but there is no incentive to write better quality posts or to share them across the internet and drive traffic.
People here get hive just for posting, not for pulling in traffic which is a problem but one that can be improved on. If you were to build an app it would have to incentivize the best community behaviors and penalize the worst.
This is just one example of where we could do better with a social media app but if we take a page form the successful web2 versions then we could move in a better direction but with distributed wealth instead of it all flowing up to a narrow selection of the population.
Copy their model, but do it better.
Posted Using INLEO
I could argue that splinterlands took a lot of money from the dhf to save and also all its contests have been used by people to sell hive and buy splinterlands assets... Value plan has been an astronomical waste of money, with all that money I could have hired people to go around recruiting users for months!
Some projects like ecency, peaks and Keychain have to be founded even if they can't sustain themselves as they are needed for the blockchain
I think Hive is perfect for Web3 gaming apps. Free transactions and the games can be promoted / talked about on the blogging platform. That is what really got Splinterlands off to a good start. Aggy and Matt had serious audiences on their blogs. Unfortunately web3 games have not ended up being very profitable in general regardless of which blockchain they are on. Even Splinterlands had to ask for money from the DHF to pay a dev for land. DEFI exchanges are really where its at in terms of profits. They are raking in a lot of money. We have LeoDex. But in general I don't see DEFI synergizing that well with a blogging platform. Figuring out how to make Web3 gaming companies profitable is key for Hive I believe.