On the surface Hive Governance APPEARS to be very centralised...
@Blocktrades controls 10M Hive Power on his main account, and the @alpha account which controls 6M HIVE Power proxies to that, as does the @blocktrades.com account, so that's effectively one person control 16M HP.
And there isn't a single T20 Witness that doesn't have a @blocktrades vote, which doesn't exactly shout 'decentralisation'.
Moreover, the second largest account which votes for witnesses (*) - @smooth and all his a,b,c-f accounts that proxy to him only votes for 14 of the T20 Witnesses, which suggests that the second largest active witness voter commands significantly less power than the top holder - he's influential yes, but Trades has the power to negate a third of his choices - not surprising as Trades has around 3 times more power than Smooth.
There's also the fact that the combined governance power of these two accounts together is profound.... the first account which doesn't have either a Trades or a Smooth Vote is @aggroed - probably the best known face on Hive so probably commanding a significant amount of VP from ordinary users (NB this is conjecture) - but he's lagging a full 6M VP behind the next witness up from him.
I also worked out that with a @blocktrades vote, a witness only needs Votes from the next 35 Hive Power holders to break into the T20 VP threshold which is around 66M; without a Trades vote a witness would need to be voted for by all of the next Top 100, meaning it's 3 times as difficult to get into consensus without a Trades vote than with a Trades vote.
However if we take into account liquid Hive it's not quite that simple....
If we were to stop there in our analysis, then hands down Hive governance is highly centralised, but I don't think it's fair to stop there.
Blocktrades and to a lesser extent Smooth have simply chosen to stack and accumulate significantly more Hive than the average user, and there is A LOT of Hive floating around on the exchanges that is there for anyone to go and buy, power up and increase their governance stake.
And in the grand scheme of the wider crypto markets it wouldn't take that much of an investment to buy 20 Million Hive and make governance a little more decentralised....
According to HiveBlocks there are currently more than 200M Hive liquid, and all it takes is for 1/10th of that supply to be bought up by one investor or a collective and that would be sufficient for a new, or existing party to have REAL governance power on the Hive blockchain...
And there are around 165M Vested, some of that Liquid is in the DAO.
And with Hive at $0.50 that's only a $10 Million Vest, and compared to how much the largest Bitcoin or Eth Holders have, $10 million is nothing.
And with the Hive price bouncing around the $0.40 - $0.50 mark and potentially going lower with a bear market, and lord knows there are PLENTY of sellers out there, it wouldn't be that difficult to patiently accumulate several million over the next few months without spiking the price too much.
And then there's the non-active VP already in existence....
So the very top witnesses have almost 90M HP voting on them, if we exclude @freedom, then there's another 60M HP Vested but not voting on Witnesses - that alone is enough to almost bring a witness into consensus!
So Hive is Potentially a lot more decentralised than it appears...
I've got to say the state of play currently looks centralised, but you can hardly blame @blocktrades and @smooth for (1) Vesting in Hive and (2) Actively using their stake to vote for witnesses.
But it's not as if these larger accounts are stitching things up for themselves: the reason there isn't greater decentralisation is because the rest of us either are not prepared to buy more Hive or because some people who already have HP aren't using it!
So - anyone out there up for a $10M Vest in Hive...?
Maybe someone with more BTC on the exchanges than me can help out? I've only got enough for 29 Hive, which is a start, I guess.
(*) NB @freedom which is the largest account by Hive Power (most likely controlled by Dan or Ned, but this is conjecture) doesn't vote on Witnesses.
I feel it's only to fair to point out that the above isn't a cause->effect as you're implying, but rather the reverse. The actual cause-effect was as follows: during Steem days, there were a number of top 20 witnesses I wasn't voting for (if I recall correctly, I wasn't even using all my votes then). But when vote war happened, I voted for all the top 20 to help concentrate the vote during the fight. For the most part, I just never changed my vote afterwards (with maybe 2 or 3 exceptions). But my point is, you will find that they were mostly all top 20 before I voted for them.
Yes fair point, my analysis wasn't historical which should be taken into account!
Thanks for the clarification.
You hit the nail on the head. Any one who has confidence in Hive ( and funds of course) can increase their stake and influence. Most don't and they're usually the ones who complain that Hive is controlled by whales.
Interesting analysis.
If 100,000 buy 100 $HIVE and power it up, that is 10 million. That is each person putting in $50.
Here is how things move from centralized to decentralized. You are right, there is plenty of $HIVE out there. The question comes back to numbers.
If Hive has 1M users, would 10% spend $50? Hard to answer but we know it would change the potential on the governance voting a great deal.
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Out of those 100k users, how many of them do you think are actually going to pay attention to and participate in governance?
!BEER
I think less than 5%
View or trade
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The concentration of Hive on whales, in addition to being noticeable in the votes of the witnesses, is even more noticeable in the vote of the DHF proposals, because currently a proposal to have enough votes has to have the whales vote otherwise it will never have enough votes and this is related to the concentration of large amounts of Hive in some beads.
I didn't do the calculations, but even if the entire community votes on a proposal, excluding exchange accounts, I think that without the top20 vote, the proposal could not be approved. this worries me
Yeah as things stand it takes some top accounts for sure, unfortunately.
I think this is a big problem because the community can have a lot of ideas to make things to our ecosystem but the proposals are only approved if the top accounts like it or are friends of account that requested.
Very interesting and needed analysis. It is true that Blocktrades basically “owns” Hive. They are not bad but it does not help to thrive as a Web3 decentralized community to have one master
I mean personally I trust Trades, but what bothers me is that it also means I can't 'hand on heart' call Hive decentralised when I'm trying to sell it to people - it doesn't take that much intelligence or research skills to find out what I've found out and there's literally no way I can win an argument claiming Hive is decentralised other than the 'potentially decentralised because Hive is relatively liquid and cheap line' - it's just the facts!
pretty good points here
how much decentralisation do we want? how much is healthy?
Indeed, and I appreciate you sticking with reality/the truth!
We are not there yet and not sure we would be there ever... As Blocktrades or big whales sell less than smaller fishes trying to make a living out there.
The key are people like us Dolphins/Orcas who could go to the next level and wouldn't have to sell weekly/monthly. But it does take a financial commitment that I do not know I am willing to make yet.
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I think Aggy is still backed by steemmonster account , it is very hard to break in Hive witness.
On other notes, Hive is not on radar for any crypto whale , otherwise 16 miilion stake is still values less then 10 million.
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This kind of information is so fascinating to me. My brain hurts imagining the HP of some of these accounts compared to my own. I'll just keep building, growing, and learning. I wish I had sufficient spare funds, to boost my HP to even a fraction of some of those accounts. I think that HP needs to be far more evenly distributed across accounts, so that more people have a practical say and influence in Hive governance. Thank you for this analysis. Very useful information that I think lots more people need to see. 🙏 💚
A lot of it was gained when Steem was cheap and/ or easy to get hold of, many of those T20 have been around since 2016.
That puts it a bit more into perspective. Thank you for that!
Many Hive user still need to join the balancing of governance that suit their taste and keep those witness vote updated.
Probably not Ned given what happened with the fork.
Hopefully not him. That fucker should stay away from Hive for the rest of his life.
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Yes fair point actually, dunno how I missed that one!
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Decentralized Governance?
¿Huh? Witnesses here are ranked based on the HP power of their electors, not on the numbers of votes. };)
Yes very true, so Hive is as decentralised as Hive Power distribution.
I think the word decentralized is hard and the only thing that has ever come close to it is hive the fact remains that in the nearest future where more people accumulate more hive we should close the gap
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Well it's better than mainstream social media at least!
Yeah
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The policy for the SPinvest accounts (spinvest, spinvest-leo, eddie-earner, lbi-token) is not to vote, although they hold sizeable amounts of HP, because they are community accounts, rather than one individual. They were brought into play during the hostile takeover, but not otherwise.
That seems like a fair way of doing things.
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I wish him well 🥓