I'm happy to see a discussion started regarding value plan and the DHF in general.
Accountability and reporting
First of all, I believe that all supported projects need accountability and reporting. I don't know any other place where people get financial support without needing to deliver results and a clear financial reporting.
DHF is not value it's inflation
People fail to understand that when the DHF distributes funds it's not real value. We simply increase the circulating supply of HBD and Hive and therefore anything that is paid out is actually financed by all the token holders through dilution of their assets. The more the DHF pays out, the more the sell pressure on Hive increases. If demand for Hive doesn't increase, it will automatically lead to lower hive prices.
Wrong incentives
It seems that once a project is financed by DHF or value plan, this becomes their business model and there is no incentive of creating a finished product and a different business model. The longer the 'construction' of the product last, the longer the funding. It sets wrong incentives.
My suggestion
The DHF damages the Hive economy and I honestly don't have the feeling that many funded projects really add value to the blockchain. It also prevents existing projects from finding other business models.
Therefore, I believe that the DHF shouldn't finance projects, it's purpose should be to strengthen the hive economy. A fund should be created to invest in other blockchains that provide a regular return. This money should then be used to purchase Hive. 40% of this hive should then be burnt, 50% should be used to fund projects. 10% would be used to fund the work of a group of people that are employed by the fund. They would be employed according to their competences. These people would define the criteria to be eligible for funding according to accountability, funding, use for hive and reporting plan. Only projects that are eligible could then be voted for by hive stake owners. If a project doesn't comply with the initial plan or doesn't deliver, the fund can cut the funding on a monthly basis. The employees would document all their work and their decisions in hive posts so that everybody can follow the process.
Why it is different?
We would have a situation where the money distributed is not financed by inflation but by generated value coming from outside. The 'risk' for hive would be smaller and the money distributed would be according to the profits that the fund makes. It wouldn't impact hive inflation and actually be a real tool develop the blockchain.
This is why I am a huge proponent of using DHF funds to seed VSC liquidity pools. It directly brings in returns for the DHF/Hive ecosystem while also increasing the utility of Hive as a whole. It's a win-win solution with little to no downsides (besides investment risk of course in an asset of choice i.e BTC, ETH, etc)
That would be quite a neat solution. The funds would need to be sold only in half to be invested. As long as the pools reward liquidity providers with fees, it would generate a nice return for the Fund and at the same time help Hive as a whole to be integrated with other chains.
Yep exactly! That's the magic of it.
@vaultec Was great getting to know you in my short attendance on the Discord chat - good stuff - looking forward to more rounds.
Absolutely! Great speaking to you and eager to holding the next town hall!
Great, any dates already planned?