Please note: if you want to burn some HIVE as part of this initiative to reduce Hive inflation (symbolically at least), please do vote this post as much as you can, since its rewards burn to @null
Inflation has been running hot on Hive for a long time, and our view is that it has severely damaged the Market Cap ranking and price of the $HIVE token.
Everyone says "We are in a crypto bear market", but they can never explain the Coin Market Cap rankings drop. We put it that the reason for the CMC ranking drop is the amount of Hive the community has printed (60 Million - see chart 1 below "HIVE Created from conversions (mostly from the DHF)"), on top of the programmatic inflation, with little to show for it.
Hive has a programmatic inflation schedule that defines how new tokens are issued, author rewards, curation rewards, witness rewards, etc.
This type of new token issuance is predictable, priced in, and programmatically ever-reducing. But the inflation that is hurting Hive isn't the predictable, programmed kind — it's the extra, discretionary money printing happening outside the normal, programmatically decreasing inflation schedule.
Through high HBD APR and excessive DHF outflows, Hive has introduced millions of additional tokens into circulation, far beyond what the economy can absorb.
This non-programmatic inflation is unpredictable, unbounded, and directly affects circulating supply, price stability, and ultimately Hive's global market ranking.
TL;DR
Hive is experiencing severe non-programmatic inflation caused mainly by excessive money printing in the form of:
High HBD APR (15%), which prints ~1.2M HBD/year → ~2.3% inflation.
- Our witness is lowering HBD APR to 6% in an attempt to bring this back to ~1% inflation per year.
Excessive DHF outflows, currently ~2.3M HBD/year → 4.4% inflation per year, which is 3× above sustainable levels (Maximum sustainable level is assumed to be 1.5% Market Cap) at current Hive prices.
To fix this:
- Witnesses should consider temporarily reducing HBD APR to ~6% (while we do not believe that HBD APR will get to 6% any time soon, we would like to see if we can start a move slightly lower to counter act inflationary HBD APR should the Hive price goes much lower).
- Stakeholders should consider adopting strict DHF proposal criteria to curb overspending and DHF outflows into general circulation.
- Existing projects should consider shifting into maintenance mode and reduce budgets as soon as possible.
- DHF Proposals should be small, short-term (≤ 3 months), measurable, and show their inflation impact.
- Value Plan should immediately reduce spending drastically (250K → 39K per quarter) and adopt a transparent S.O.P. All spends should have blogs published before spend event, Spends above 5K are voted on by 3 elected reviewers in the comments of the blog, spends above 20K should be outside the perview of Value Plan and should go into the DHF to be voted on by the community
Our team outlines below a new, much stricter DHF voting policy. Teams issuing proposals that fall outside of these criteria shall not be considered by our team for voting. Intention is to cut outflows from the DHF into the general circulation by:
- Time Limits - 3 months max,
- Expectation of regular, quarterly reporting,
- Includes KPI and reporting metrics presented as part of the proposal,
- Annual inflation impact calculation so that the project demonstrates it understands the impact of inflation on its proposal,
- How value is returned to the DHF
If we don't self-regulate now, Hive risks developing a reputation for unchecked money printing.
If we do act, we can restore economic credibility and protect Hive's long-term value, but we must act now - if the money printing continues, this risks a split in the community.
Chart 1 - 60 Million HIVE Created from conversions (mostly from the DHF) credit: @dalz
The Technology Was Supposed to Protect Us From Inflationary Money Printing - What Happened?
Blockchain technology was created to take money-printing out of human hands and secure sound economies through programmatic consensus.
Unfortunately, Hive as a community has failed to uphold this principle. We have managed to introduce large amounts of non-programmatic, unpredictable money creation — far beyond what the chain itself issues.
The two problem areas are:
- HBD APR, manually set by witnesses.
- DHF proposal outflows, manually set by users requesting funding and by voters approving them.
Because these are not programmatic systems, humans have done what humans tend to do: vote for extraordinary amounts of new money printing.
These concerns were shared in the HiveFest Round Table. Minutes are available here:
See below, thanks to @dalz reporting, we can see that programmatic inflation is far lower than the actual inflation, which the DHF and the HBD APR are now issuing:
Below are our proposed actions following that meeting.
Lowering HBD APR
The current HBD APR is 15%.
But 15% of what?
There are ~8 million HBD in savings.
15% of that = 1.2 million HBD per year printed out of thin air from the HBD APR and added to the Hive supply.
With Hive's current Market Cap at 52M USD, this represents:
2.3% annual inflation; value transferred from all Hive Power Holders's accounts (who are staked for 13 weeks and have lost 97% of their value since the top 5 years ago) to passive HBD holders whi are staked for 3.5 days and have held their value for the last 5 years.
We do not support taxing the entire community at this level.
A responsible economy should devote no more than 1% of annual inflation to passive HBD yield.
Therefore, for this period of low HIVE prices, our witness will set HBD APR to 6%, in an aim to encourage others to help reduce HBD-APR-driven inflation to ~1% of market cap instead of over 2.3%.
The 6% APR is derrived from this: 6% of 8 Million HBD = 480,000 HBD. As a % of supply this is 480,000 x 100 / 52 Million USD Hive Market Cap = 1% of Market cap per year
This protects Hive from excessive money printing should prices go much lower. (Please note that we are aware that this may cause conversions to happen, however, we think a) many of these conversions are coming regardless of what the HBD APR is due to haircut rule looming, and it being an opportune time to convert due to prolonged bear market and b) we do not think that the APR will suddenly go to 6%, but want to see if we can start a slow move lower as we go through the bear, in the hope that as we come out of the bear we are already lowering into a bull (as is the ideal scenario).
Hive's Debit via HBD dominance is looking incredibly bullish (which is a bad thing):
Credit @dalz - https://hbdstats.com/
Urgent Call to Action for Other Witnesses
We kindly ask fellow witnesses who also care about limiting money printing to temporarily reduce their HBD APR in line with a 1-2% annual inflation target, which corresponds to roughly 6-12% HBD APR at current conditions. This should reduce inflation by HBD APR should the Hive price go much lower from here.
DHF Outflows Are Significantly Driving Inflation
The DHF is another major source of new, non-programmatic inflation.
Money inside the DHF is not yet issued into the economy, is not included in the market cap calculation of Hive and thus can be considered "dead" or locked. It is not priced into the price of Hive and once issued into circulation, it becomes a new source of liquid HBD supply. It is the equivalent of uncapped, money printing, like the bankers do to the US dollar, that is added, almost at random to the Hive supply. This has a double negative affect on the price. It is 1) normally converted into liquid Hive which increases the circulating supply and 2) is normally then sold into the market both of these depress price, and harm Hive's market cap rankings, especially if funded projects don't generate equal or greater economic value, which was always of course NOT the intention - the intention was to create more value than the HBD issued via the DHF. This unfortunately does not seem to have worked and it is our view that a period of austerity is now needed for Hive in order that it does not print itself to zero.
We saved oursleves from Justin Sun controlling the Ninja Mine on Steem, but instead have unfortunately become its victim anyway by unintentional, excessive issuance of this money into the economy via our DHF votes.
Since there is no built-in cap on DHF outflows, the only practical solutions in our understanding are as follows:
1) Stricter DHF voting criteria enforced by voters to obtain better reporting and lower budget requirements from projects.
2) Lower APR on HBD.
3) Stricter regulation of Value Plan and a lowered VP budget.
Without these, we, as a community, every single one of us, risk becoming known for exactly what we criticize in the traditional finance system: unchecked money printers.
This would badly damage Hive's credibility among communities that value sound economic policy (Austrian economists, Bitcoin maximalists, etc.) and it would be impossible to regain it.
DHF Outflows: The Actual Numbers
All numbers below are on top of programmatic inflation.
We are currently spending 15,558 HBD/day from the DHF.
If we assume the stabilizer is self-sufficient (subtract 12,000/day):
- 3,558 HBD/day = 35K HIVE/day being issued into the economy.
Add the Value Plan's annual 1M HBD:
- Total annual DHF outflow = 2.3 million HBD
- Equivalent to 22.3 million new HIVE printed, on top of programmatic inflation.
Compared to the 52M USD market cap:
2.3M / 52M = 4.4% inflation added every year from DHF spending alone.
DHF inflows are only ~0.9% of market cap.
We are spending almost 5× more than the DHF receives from programmed inflation.
This is not sustainable at low HIVE prices.
At current prices, a healthy ecosystem would spend ~1.5% MAX of market cap annually:
1.5% x 52M = 780,000 HBD/year sustainable spending
We are spending 2.3M — 3× above sustainable levels.
Spending must come down by ~3× to return to credibility.
Inflation impact on current DHF-funded projects
Top Active Proposals Producing Highest Inflation via Non-Programmatic Monet Printing via DHF Outflows
| # | Creator | Receiver | Daily HBD | % of Total | Duration (days) | Additional Money Printed Yearly (Inflation %) | Title |
|---|---|---|---|---|---|---|---|
| 1 | @vsc.network | @vsc.network | 1,151 | 32.3% | 365 | 0.812% | VSC proposal 2025: Smart contracts, cross-chain, and beyond |
| 2 | @peakd | @peak.open | 635 | 17.8% | 366 | 0.449% | Development of several new open source projects by the Peak Open team |
| 3 | @keychain | @keychain | 600 | 16.9% | 365 | 0.423% | Hive Keychain Development Proposal 2025 |
| 4 | @ecency | @ecency | 396 | 11.1% | 457 | 0.350% | Ecency development and maintenance #5 |
| 5 | @howo | @howo | 350 | 9.8% | 366 | 0.248% | Core development proposal year 6 |
| 6 | @worldmappin | @worldmappin | 195 | 5.5% | 730 | 0.275% | Worldmapping 2.0 - Travel Guide, Hive Map Service, Quality Curation & Mobile App |
| 7 | @themarkymark | @hiveanalytics | 100 | 2.8% | 60 | 0.012% | Hive Analytics |
| 8 | @hivewatchers | @hivewatchers | 95 | 2.7% | 911 | 0.167% | The Hivewatchers & Spaminator Operational Proposal for the Period 2024-2026 |
| 9 | @mahdiyari | @mahdiyari | 36 | 1.0% | 365 | 0.025% | Public HAF database & HafSQL maintenance |
Time to Reduce DHF Budgets & Enter "Maintenance Mode"
Below are our new DHF voting criteria. Many existing funded projects exceed these criteria, and we will adjust our votes accordingly in about two weeks from now, so we can digest the community reaction to this blog and allow time for existing projects to adjust.
We implore funded teams to lower their budgets, enter maintenance mode, and reduce inflationary pressure until Hive prices recover.
We have enough features on our eco-system apps now to go to market, we request that as a community we focus our limited remaining funds on marketing these apps for the time being instead of building new features into them.
Furthermore, in future proposals we would like to suggest that two funding amounts are entered: 1) normal scope completion and 2) budget required only for maintenance mode, in case of sudden price drops prior to completion of the funding period.
Suggest Funded Project Burn Remaining Funding
Another way for existing projects to support the reduction of outflows from the DHF into the general circulation is would be for them to partially burn funding coming from the DHF apart from that needed for maintenance. This would reduce inflation massively, preventing new Hive being added to the supply, and preventing that supply being sold onto the market and putting further pressure on the price.
Our New DHF Voting Criteria
Projects that do not meet these criteria will not receive our vote.
We also encourage other large stakeholders to issue similar criteria.
1) What We Will Consider for Voting (to reduce inflation)
We will prioritize:
- Small, low-value proposals
- Short sprint cycles
- Clear scopes of work
- Explicit success metrics
- Ideally: a plan for returning value (HBD) to the DHF
2) Proposal Time Limits
We will not consider any proposal longer than 3 months.
3) Quarterly Reporting (Mandatory)
Projects must publish a public report at the end of each funding period.
A proposal cannot be considered for renewal unless a report is published.
Reports must include:
- Goals of the previous funding period
- Methods of measurement
- Results / KPIs
- What Hive gained from the work
- Any funds returned to the DHF
- Clear goals for the next round
If a report is not published within 10 days of term end, no extension will be considered.
4) Examples of Deliverables & KPIs We Want to See
__NOTE: These are only examples, but are the types of measurable KPIs we should be looking to make sure projects report against:
- +10% QoQ active users (unique sign-ins)
- 5 new dApp integrations; 2 production launches
- 2,000 net new wallets; 500 retained after 30 days
- Marketing ROI ≥ 1.2x; CAC ≤ $8
- Monthly public updates on Hive blogging platforms
- 1 public audit log or ledger export
- 15% of project revenue returned to DHF
- 2 new business partners onboarded to Hive
- Clear sprint milestones
5) Annual Inflation Impact Must Be Calculated by Each Proposal
Every proposal must show:
Inflationary effect (%) = (100 × Total Amount Requested $) / Current Market Cap $
Given that sustainable DHF outflows should remain between 0.5% and 1.5% of market cap:
52,000,000 × 0.015 = 780,000 HBD/year
We will not consider proposals exceeding:
20% of 780,000 per quarter = 39,000 HBD/quarter
⇢ ≈ 430 HBD/day
Additionally, if a proposal stays below these limits but pushes global DHF outflows above the annual 1.5% target, we will not vote for it.
6) Return of Value to the DHF
Projects should commit to contributing a portion of their revenue or profits back to the DHF.
A 10% return is a reasonable starting point.
Projects unwilling to return value will not be considered.
7) Review of Criteria
We will update these criteria as Hive's economic conditions change.
7) Minimum Viable Product / Proof of Concept in Operation
We will only consider projects that already have a minimum viable product or Proof of Concept already running. This proves that the project has already put skin in the game and the path to success is of much lower risk for the community. If an MVP or POC is not possible, then we expect to see strong evidence of the project team having sufficient experience to execute the scope of their proposed project
A New Proposed Value Plan S.O.P. to Reduce Spending
Value Plan currently accounts for:
1,000,000 / 52,000,000 = 1.9% inflation per year
One person directing 1.9% of annual inflation is not acceptable at current price levels.
This must change.
We propose a new S.O.P. using no new code and no multisig requirements:
Public Transparency Requirement
All expenditures must be announced via a blog from @valueplan at least 3 days before spending, including:
- What is being funded
- Why does it benefit Hive
- How results will be measured
This gives the community time to comment and express approval or objections.
Spending Categories
1) Spends < 5,000 HBD
Allowed for travel, accommodation, food, small events, and miscellaneous expenses.
2) Spends 5,000–20,000 HBD
Require approval from 3 elected reviewers.
Process:
- @valueplan publishes pre-spend blog
- Each reviewer comments with approval
- All 3 must approve for funds to be released
- Reviewers are elected via community voting
- Terms last 6–12 months
If only 2 of 3 approve, the spend is rejected.
3) Spends > 20,000 HBD
Must be moved out of Value Plan and into the DHF as normal proposals.
This includes large existing projects such as:
- Rally car
- SWC
- Ghana water wells
- Venezuela pipeline
All can be migrated today, with zero code changes.
Value Plan Budget Adjustment
If marketing should account for ~20% of spending, then:
780,000 annual sustainable outflow × 20% / 4 quarters
= 39,000 HBD per quarter
This means Value Plan should reduce its quarterly budget from 250,000 HBD to 39,000 HBD.
WIP - Working on a DHF Proposal Platform
We are working with @roelandp to build a site where stakeholders can easily issue voting criteria templates that reflect the criteria against which they will and will not consider projects for voting in the DHF
This site will also become a place where DHF projects can more easily write standardised proposals so as to help them see their affect on inflation and help them issue more professional proposals with proper consideration for the economy, reporting and progress measurement requirements amongst other things.
The most important thing here is that the site will alert the proposer if they are asking for a quantity of money that will hurt the Hive price via such inflation as we have seen over the past few years due to DHF outflows.
Conclusion
Note we are not pointing blame and not saying any of this is intentional. It is the Madness of the Crowd phenomenon. But now that it has been highlighted, we hope to see some action from at least some of the top whales on Hive to correct the current inflation and money printing problems on Hive.
We deeply believe in the Hive community, and believe we can come out of this much more anti-fragile; this should be seen as an opportunity to become better and fix our weaknesses.
If we follow the steps outlined above, Hive can:
- Reduce inflation drastically
- Bring spending and excessive money printing under control
- Regain credibility as a sound, responsibly managed blockchain economy
- Demonstrate that decentralized communities can self-regulate
If we fail to act, however, Hive will likely earn a reputation for reckless money printing — one that could have been prevented and that will be very hard, if not impossible, to repair.
Hive has survived many challenges. This may be our toughest yet…
But we can get through it if we act together, and we can come out much leaner, meaner, and adept at making economic adjustments under pressure.
I agree with a lot of things in there, but not everything.
1/ 6% is brutal and will trigger massive conversions. 15% is pretty high so there's so margin to get it down, but it should be done slowly and carefully.
2/ 3-month proposals are unsustainable unless you have the support of the biggest whales. It takes us over a month to gather enough support. What you're proposing will actually penalize community-supported proposals rather than those supported by the select few.
3/ Some projects (of course, I am biased, but not only talking about Keychain) have the potential to help Hive bridge with the rest of the ecosystem and help us develop further. Killing all development is basically giving up.
Other than that, I mostly agree about better selecting what deserves funding, holding projects accountable, and changing the way VP works.
Appreciate your valuable input Stoodkev!
We think it is likely that with the Haircut looming, many conversions will happen regardless of the HBD APR. but also agree that 6% is low. the idea behind this is that we also dont think that we will go to 6% even at all. but hope that this triggers a move slightly lower so that we are protected from excessive inflation should the price go lower from here. We hope it will even out somewhere around 8-12% range.
we are currently in a situation where 4 or so projects are funded for the next 6 months or so and i dont want to calculate the affect of the inflation at these low hive prices that will result from the funding that is already approved, its eye watering. Maybe there is a better way here / compromise on how to do this, but huge proposals that last for a year also cannot continue and have us remain a credible chain. the other thing that can happen here is that proposals can plan 1-2 months ahead and start early lobbying for votes. But am open to other suggestions on how to do this while both minimising risk to Hive due to inflation at low hive prices, while also making it easier to lobby for votes in a timely manner. maybe a DHF review committee could help with this function?
i agree that some things should be gotten to the point of shipping that are still WIP and will have a large positive affect on the eco system. We should probably have a go at identifying these things and figuring out what we can afford to ship / low hanging fruit while making a go at not issuing too much more fresh money from the DHF
I dont think we are saying to give up at all. This strategy should be a temporary thing, as we are teetering on hyper inflation, and it is always better to take action that allows things to live to fight another day in my opinion. Also many of the products on hive are great already as they are and far outperform much of what is out there. i think hives products and tools are strong already and can make a huge impact IF marketed in a smart way (which we have not been great at so far).
Sincerely appreciate your input here. Keen to talk more with you and look at ways to build the highest result, lowest cost stuff while doing what we can to limit the inflation
It's good to talk about these things, glad we're having this discussion.
1/ maybe, though I've done this many times it's a long and thankless task when you don't have the support of the biggest whales. I guess I'll just have to get back to it since we've just lost our funding.
3/ I was mostly talking about devs being employed by the projects, not project owners.
1/ seems ur funded again
3/ im referring to both. stake holders diluted to keep "talent" around is a totally unacceptable scenario to both the reputation of Hive builders and stake holders. Like i say, DHF outflows must be cut, and we can maybe find a balance where everyone can win and the people both voting for and receiving DHF outflows may have a chance to save their reputations as people who can avoid Zumbabwe style money printing into oblivion. Have no doubt that the votes and DHF outflows are on chain and everyone can see who is contributing to the situation.
Yup.
My point is that cutting waste is essential, but halting a project is not as easy as pressing pause/resume (depending on the size ofc), and I don't expect a miraculous price recovery from just stopping everything.
I guess we'll have to agree to disagree on that part.
Keychain is more essential than most other projects. I want to keep supporting peakd and ecency but I want to see ALL projects to seek self sustainability seriously and make asks that consider what hive can sustain at the moment rather than just what they think they deserve.
Self sustainability isn’t easy but I don’t feel any projects take it seriously. This is why I unvoted most proposals today. Keychain I kept.
Much appreciated!
Self-sustainability is indeed the goal, but it's really hard as things stand. We barely make 1k HBD on a good month with our swap services, due to how small the volumes are. That's why we've decided to try and connect Hive to the broader ecosystem by becoming multichain. These things take time but if we continue operating in isolation it's going to be hard to survive.
I didn’t know you were working on cross chain. That sounds like a good plan. I feel better about hives future knowing you are moving in that direction, we need some more role model projects that achieve self sustainability!
I can see how it might scare some DHF voters because it looks like a project could get a big boost from the DHF and then quickly abandon hive when they achieve success that isn’t tied to hive (dtube comes to mind though I don’t know the full story) , but this kind of fear has also held us back. I hope projects find ways to build and keep that trust and make moves towards more cross chain and cross community development.
Perhaps there were reasons people didn’t trust Leo to do this, but their overall plans and ideas during the early iteration of their most recent DHF push were the most innovative and potentially sustainable at Hive so far. I wish their critics would recognize that at least, whatever other criticisms they may have. Good ideas are good ideas.
I really hope ecency and peakd can find some method of self sustainability that works. Great work and Hive needs them but I don’t think it should be expected to support them forever.
Hive keychain may be my favorite project at hive though even if it’s not one I think about often, it’s like well functioning connective tissue that we were missing before. I’m not sure I’d still be here without it! Thank you!
Stakeholders can certainly reassess how they vote on proposals, and you are free to advocate for this, but if you want to directly affect the DHF payouts, the way to do that is for stakeholders to vote for the return proposal and stop voting for some or all other proposals.
I'm largely in favor of this, but we also have to accept that if it doesn't happen, we've been outvoted. Stakeholders have differing views on the value that proposals bring to the long term viability and success of Hive, and how to weigh this against a particular short term mechanical calculation of inflation level. I'd also say that for a platform that has only limited present success, longer term initiatives are pretty important to extremely important. But that doesn't mean wasting money has value. So it's all a balance.
Yes, totally agree, however, should those long term initiatives not pan out (which is also possible), then if we are all aligned on that, there is no one left here with credibility when it comes to monetary policy. Im not saying i know everything, but i know enough to know that if those long term initiatives dont work out and we keep printing money, it is highly likely that we are going to zero, or to a place where our reputation sustains such damage that it cant be repaired. So this is in some ways a hedge against that, for members of the community to act to demonstrate that there were people who stood on the other side of the "$££ money printing at all costs" of the argument, such that if it does all go to pot, then some people can express them selves here and maybe stand a chance at another shot at this DPOS community, Network State stuff in the future. As if we carry on printing money like we are and it does go to pot, there is no one here who will have a second chance after that, it will be over, making Justin Sun laugh, which i cant tolerate the thought of.
Well, printing is only way to go to zero, but not developing into something more compelling and self-sustaining is another way.
Yes, agreed, another way to look at this is that we have what we need developed already, if we start using smart, cheap, measurable marketing initiatives, we can start onboarding users with what little money we have available at the moment. This could cause growth and allow us to earn back the right to spend again, as long as it’s proportional to the market cap.
Imo hive dapps are good enough. Far advanced to almost anything on the market, they just need good marketing.
Obvs if there is something that is critical and can’t wait on the core side, then maybe that needs funding. But as it stands, the hive chain is pretty great in terms of what it has built and can go to market as it is if needs be, minus maybe a few more relatively easy to build features on the dapp and tools side at least
1 - yes clear
2 - Yes, you are correct that these are paths of action, but we have a phenomenon of people over history printing money until they print to zero. Its a real human condition. Blockchain tech was supposed to remove the money printer from the hands of people by having programmatic inflation schedules so we could all say "we have sound money policy over here, you should move away from those bankers", and while the Hive price was high, and DHF spending while not programmatic, was still a small amount compared to the market cap of Hive, and so had little affect on inflation. A model where there is no cap on outflows from a DAO and that DAO is paying out in stables, is susceptible to the scenario we find ourselves in right now where groups of humans albeit unintentionally print all the way to 10 cents Hive. For example, we should probably all take a look at how much new HBD our DHF votes have resulted in being issued in to the economy. I think we will be surprised at just how much more new money user's votes have issued from the DHF into circulation on top of programmatic inflation. Shocked even. Its a lot and i dont think people on Hive have any appreciation for it, most on Hive think we can keep spending our way into a higher market cap, but at what amount of dilution to their wallets? They dont seem to factor this in.
Like I said before we clearly have a serious problem and when it comes to running a sound economy, our credibility is essentially used up (maybe not quite yet but we are close to serious damage), and so this blog is a place where people who dont agree with the money printing and who are already voting return prop can voice their views and discuss alternative ways on top of the vote return method, which i also advocate for of course
I don't necessarily agree there is anything unintentional about the DHF spending. People (especially the very large stakeholders who have a big role in funding most of the proposals) for the most part know what they're voting for, and certainly know about the price trajectory. There's probably some disagreement as to the degree to which the spending is responsible for the price drop, as opposed to other market factors (let's be honest, lots of crypto coins/tokens have gone to near-zero with minimal or zero inflation, it's not the only reason at all).
Beyond that, we broadly partially agree and partially disagree, so we can leave it here.
This all goes back to the very origin and the inception of the chain with its predessesor in 2016 and the 80% ninja mine that is skewing the Hive tokenomics. Its effects are much lower now but still present.
The DHF funding that are the biggest source of aditional inflation, would have been much lower and capped by the programatic inflation if the initial tokens were not there. The programatic inflation, if say on average is 25M HIVE per year, alocates 10% to the DHF, or 2.5M HIVE and if say aplied average price of 0.2 USD per year equals 500k HBD. And that would have been the natural and programatic cap of the DHF spendinig.
The 3M HBD per year for the DHF that we are aproximatly running to in the last three years are only possible due to the ninja mine. On the inflation side for 2025 up to now we are at 40M HIVE, probably will end up somewhere around 47M, that is almost double the nominal 25M. This will be a record amount of HIVE put in circulation in a single year!
Long story short, we are spending for funding more than our means, made possible by a pre mine. Another note is this would not have been so damaging, if we had some growth in the last years. The lack of growth and the extra spending is what is putting us in the curent situation. Going into maintaince mode is certainly welcomed. Meanwhile if we can make some quick wins on the growth side that will be amazing.
Looking at other chains, you definitely have to evaluate the growth aspect. It's not easy to grow as a blockchain in a Web3 world that has very few applications connected to the real world (which would mean ongoing inflow of capital) but an increasing number of blockchains competing for basically the same set of users and investors. Hive stands out with a unique set of products, but there hasn't been enough growth on those to sustain the inflation, and even if there was more growth (say on peakd or Ecency) many of the users would be net sellers of HIVE because they earn from inflation.
I still think that being able to offer a social incentive layer to apps is a good value proposition, but can't tell how difficult it would be for Web2 developers to integrate Hive (including account creation and resources handling)...
P.S. Debt updated:
Maybe there needs to be a way to pre approve a budget each year, so that the budget is fixed in HBD and then it gets consumed until it runs out or until the year ends.
One of the key 'omissions' in all of this is that it has never been made clear enough publicly that the value from which market caps for Hive are calculated from by sites like Coin Market Cap, do not include the DHF pool. This gave (me at least) an incorrect perception of the state of Hive and its potential, right from the inception. Every DHF payout inescapably lowers the token price. This should have been made abundantly clear and not doing so is an epic failure.
Yes, this is correct, it was not made clear, and it has become clear over the last 18 months or so to me. It seems that even now, many take the view that we are spending "small amounts compared to other chains" but they fail, to the detriment of Hive and its market cap ranking, to recognize that the spending is only sustained by large amounts of money printing, which is a non voluntary tax of value transfer from the wallets of most to the wallets of those being funded / those directing the new outflows from the DHF
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I am growing my HBD stack along with HP at the moment. I will accept a lower APR for the greater good and will continue stacking both.
I don't have the 8 year background on this chain like many others here but I've been digging into the workings of Hive and thus have an opinion, even if it's less informed.
Excessive inflation is never a good thing, and if it exists, it clearly has to outweigh the additional printing. This can work temporarily but it seems both aren't the case:
HBD APR of 15% doesn't lead to large amounts of capital flowing into HBD from other stable coins (obviously) so this should be considered a failure (that's okay) and moved away from. I'd even say that 6% protocol issued inflation is on the high end and could be reduced to 3% or even 0%. Why does the protocol want this to begin with?
Don't get me wrong, I enjoy the 15%, but this hasn't led me to buy 10k HBD and put it into savings, mostly for liquidity concerns
I know little about the DHF and don't usually look at all the current active proposals, but they clearly haven't led to a massive influx of new users / new businesses / new HIVE buyers, which is what every chain needs. As much as I know it would hurt existing projects, but I guess the right thing to do would to (at least temporarily) halt ALL payments from the DHF and reconsider the funding and criteria towards a more sustainable model.
In the end, the people running the chain need to consider what the chain needs. As opposed to other chains, Hive doesn't seem (excuse my ignorance) to have a body like a foundation that would steer things like business development, with a clear goal and kind of a business model in mind.
The competition out there is massive, and Hive as an ecosystem needs to consider its strengths and double down on these rather than hanging on to some band aids.
Just a comment on the math you laid out in the post (might again be my ignorance):
Shouldn't the total HBD inflation be calculated based on HBD in Savings rather than HBD in circulation? I imagine a large portion is in savings, just wanted to clear this up in my head.
You are correct about the savings, Numbers have been updated based on this. Thank you for the kind correction
No worries, always happy to help.
The chain was originally conceived as an intentionally inflationary economy rather than a fixed (or very low inflation) supply model as with other cryptocoins. The idea being that the inflation would be spent to directly support the infrastructure (witnesses), attract more users, build bigger communities, and so forth. Opinions probably differ has to how that has worked out but it clearly hasn't been a huge success.
Whether that means it should be completely revamped is probably going to be highly controversial.
Yeah, I mean I totally get why there's a certain amount of inflation; it's also much simpler to build ongoing, stable incentive systems through inflation than through, let's say, a tax system.
My question was directed to the (protocol -born) yield on HBD specifically. If HBD is supposed to be a stable coin (which it does a really good job in being) that e.g. should be used to make stable payments within the ecosystem, why would the protocol want to generate additional inflation of HIVE to pay a yield to people who just sit on their HBD bags? The only conceivable answer that I can think of (and that's why I asked) is to attract outside capital to buy more HBD just to earn 15% interest. In theory, this could be a scenario if HBD had sufficient liquidity and investors could easily move money in and out of HBD (e.g. by having a deep USDT/HBD pair on Curve) but since there's hardly any liquidity for HBD outside the protocol itself, my theory is that this feels too risky for investors to do. But even if that were the case and we'd have 1bn HBD minted, this would cause a massive amount of additional HIVE issued just to pay for the 150m HBD interest over the years, no? And that would likely cause issues in the long run, even at a much higher HIVE base price originally (reminds me a little of the LUNA / UST situation back in the day).
Anyway, I think it's a great discussion to have as I think everyone here will agree that too much inflation probably isn't good for a token, and everyone wants their HIVE bags to go up, not down.
Originally the exchanges that listed STEEM (HIVE predecessor) all listed SBD (HBD predecessor) as well. It was much easier to trade in and out of the stable token.
Too bad it apparently got delisted everywhere.
Valuable points here, especially from a set of fresh eyes to hive.
As I said today in Hive Thrive's show, and post-show. We are not too late, but we've reached the edge of the cliff, and we've done so with our own actions. This is not extreme in any way, it's needed.
If there's anyone taking this personally, then they are simply being immune to evidence and there's almost no point in having a conversation on the matter.
I keep on making the analogy that when a home has budget issues, its only natural to make adjustments. You cook at home (no going out), you shop smart. It's simple economics.
If there is someone also who is thinking: I'm done building on hive - That just means that person is not thinking straight. To put it simply. The cow is sick, its too skinny, if you keep on milking it, its going to die. We have to get our house in order, and when we do, because we will, we can enjoy the fruits of those results. But, right now, its simply not the time. It can't be.
You do have a knack for summarizing posts in plain English :)) Agreed @meno
I would say we are well past having a reputation as a dead token but we aren’t actually dead yet and have a lot more life that any other token that gets this far into the danger zone.
I was really impressed with @meno’s proposal for Hivesnaps. It seems to be one of the very few that considered first what hive could sustain and not just what the project felt they deserved. It was short and reasonable and the results were fast and impressive.
This is how all proposals should be. As much as I think peakd and ecency deserve to be rewarded for their work and both are somewhat essential for hive, they’ve been receiving funds for years without creating a sustainable business model and they should be focused on that which would bring money into the ecosystem. I don’t think inflation should be supporting these projects forever, and I say that while recognizing their importance.
VSC is out of control. It seems like a nice idea and maybe they can pull it off but the ask is so far beyond what hive can sustain.
The only projects (and there could be others I don’t understand) that I think deserves full sustained support (welfare checks essentially) is keychain because without it we are back to the Stone Age , and I think they should be seeking self sustainability as well.
The ONLY reason I’m still invested in hive is that I know there are a bunch of people who will fight tooth and nail to fix it when it’s broken and people will @meno and others who keep building on it knowing they may not be rewarded. I believe the energy still being put in outweighs the energy being sucked out but posts like this are essential for keeping that true in the future!!
Thank you, as a well know hive project I think your voice will reach further than any individual user account.
Idea 1:
Create a staggered APR and work better on external offerings, better apps, and community-backed marketing by working with experts.
Month 1-2: 15% → 12% (savings: ~330K HBD/year)
Month 3-4: 12% → 9% (savings: ~330K HBD/year)
If the market recovers by 50%, it can be set at 12%, observing the 24-hour buying and selling capacity on exchanges.
Currently, we have very few products that innovate on a large scale.
Idea 2:
Implement improvements in the DHF or create a grant-based competition to seek a balance.
Very interesting way to look at it, whether or not the community decides to do this is another question however.
These kinds of ideas have been proposed countless times over the years - sadly, no changes have been forthcoming and not really even much of a discussion among key stakeholders (in public, that I have seen).
Yes! Although I believe one of Hive's main problems is the lack of in-depth analysis of metrics, we at Hivecreators have been working on this for months, redefining some things, especially the documentation, to start from scratch. The technology isn't the issue; it's the weakness in Layer 2 and the lack of a solid, overarching narrative about Hive's core technology.
Blockchain is a good product that meets industry needs, but it lacks a strong layer of innovation and competition in Layer 2, which would attract external suppliers. This requires shaping the core communication through marketing strategies at different scales, leading us to ask: How do we target Hive's four main markets (creators, players, devs, investors) with a single narrative, without the backing of numerous dApps?
It's just my thought, I could be very wrong.
I think it's a great initiative and call to action for everyone in the community. It's important to keep those excessive expenses under control. I hope that many whales and witnesses jump on board.
I would like HIVE to earn a higher percentage than HBD and of course, for HIVE to reach $1 soon.
It's time for a change.
Stop the crazy spending on projects or events that haven't shown results or transparency.
Also, the APR on Hive Power should be higher than the APR on HBD.
Maybe this is our last chance to do something for Hive.
I want to see what the reaction of the community is. Hopefully, we can come together to save the chain once again, despite our differences.
You have a point. Hive power should be more valued.
Yes, it should be more attractive to invest in HIVE.
The HBD accounts were created to sink small investments into instead of Hive, where they would potentially vote on witnesses. More Hive voting for witnesses would make the control of the witnesses, and the code they run, maintained by the ~36 whales who keep more than 50% but less than 51% of the stake on Hive, more expensive to maintain.
development is worth spending on
events are not
Depends on the type of development and if they are showing results or not.
Also the type of events, because there are some that are worth it, others are not.
Developments you can analyze their outputs yourself, you just have to take people's word that events did anything of use.
I don't disagree but the second part of this comment is a bit excessive and dramatic - no offense. Hive will be fine. There's no "saving" of the chain when it isn't at risk of being unsaved - whatever that may mean. As well as "our last chance", maybe it's the last one for you and me, but there'll be other people coming along, and the chain will be here to accustom them.
Yes most likely correct, Hive will no doubt, be here, its the dilution that is the issue for the ppl who have been here building and working for years, it is a complete injustice, and if dilution happens to a reasonable extent (which is now highly likely), there is little to no chance that Hive can regain credibility and reasonably expect people to build or invest in future, since if it can happen once to the OGs here, then it can happen again in future to the next group of users who want to invest.
I Appreciate your inputs Acid!
Why is it an injustice? Yes people have been building and working for years, but that hasn't been very successful. If some new blood comes along and changes the trajectory for the better, why should the old farts who contributed to it all stagnating for years be protected from dilution just because they were first? That doesn't sound like a very attractive proposition to new blood.
Its an injustice because many of the people being funded by the DHF have not lost a single penny and have earned well, while that value has been transferred via inflation from accounts of Hive Power holders to their own. The Hive Power holders had no idea that the DHF could inflate the chain to such an extent, and had this been known, i very much doubt that as many people would have held Hive Power so religiously all this time.
I appreciate that maybe the tremendous amount of money disbursed from the DHF was not necessarily done to inflate away the positions of Hive Power holders, Im sure it was done with good intention in an attempt to build value for the ecosystem, but, the only other alternative position that is then acceptable is that we are some of the most naive people when it comes to managing a money printing economy in a professional way that protects investors and grows the value of their stakes (dont get me started on how much money has been thrown away with zero accountability and how only a very small group of people have the ability to direct inflation on this chain at this point, Value plan for example where one person can decide what they want to do with 2% of the chain's annual inflation, which is now funding rally cars and acrobats in Venezuela, a water pipeline in Venezuela that it totally corrupt, water boreholes that should be now showing local economic activity, but instead just keep printing evermore expensive boreholes... anyway the list goes on and on, almost endlessly).
HP holders are down 97% from the top, the whole time we were losing coin market cap rank while also saying that "we weren't spending enough compared to other chains". That spending has now added 60 Million Hive to the supply on top of the scheduled programmatic inflation.
Its not an injustice from the point of view that there is an aggressor and a victim, however, it is an injustice from the point of view that neither investors nor users voting for DHF funding knew that there was a scenario where 60 million Hive could be added to the supply on top of programmatic inflation by voters from the DHF.
At least more people are now aware of this issue, including, i think people at the top of the chain, and we can now work towards fixing it with the tools that are already built, or not, and if we choose not to and that inflates the chain significantly more (which is the path we are currently on) then at least it is more clear for future investors what they are getting themselves into and where the community can (and most likely will) use the DHF to transfer an unreasonable / unsustainable amount of value out to future elected DHF projects via inflation of their HP investments.
Ideally as a community we choose to change course and collectively reduce outflows from the DHF to match the of the size of the economy. This course of action will make us much more anti fragile than we would have been in the next bull market, had we not have been through this test and passed it successfully.
With all due respect, the algorithms, including how DHF budgets payouts to develop the ecosystem, have always been public, and if you didn't understand how it could result in a larger supply of HIVE, that's on you as an investor.
Yes, DHF contracts are for a fixed value, while HP and HIVE holders have both upside and downside. Again, this is for HIVE/HP holders to understand and decide if they want to hold or not.
Its not that I didnt understand, i understand very well. I have been talking about reducing the budget via DHF outflows for well over a year to prevent the situation the chain finds itself in now. The tool to limit DHF outflows was always to "vote the return proposal", which clearly didn't / doesn't work. Obviously the community is not capable to manage its own economy with the tools available.
Blockchain tech was supposed to take the ability for the community to print money away from it and put it into programmatic code. Which Hive has failed to do.
Sounds like the code needs updating to limit the outflows from the DHF. The lack of a cap on DHF outflows means Hive's economy has a huge exploitable weakness which is a major security risk.
Bring back the whale experiment!
The more changes we have made to the original design the less I've liked it.
It's almost as if somebody wants us to fail.
Can't really blame them, imo, we do appear real similar to an ungrateful mob.
Control freaks gotta control.™
Yeah, I mean I'm pretty much on the receiving end much like most people not holding insane HBD savings or getting excessive DHF funding, the inflation has definitely hurt and we're feeling it in many ways than just the price. I'm just trying to keep a clear head, saying overdramatic things and overreacting to things we should've reacted to a long time ago isn't going to help much, it may in fact make some things worse - like cutting off some crucial funding or developments that may take us to the next level short because we're suddenly too focused on saving every penny than understanding that some projects may be good long term for hive. Again not trying to be biased here with my project's proposal but trying to talk generally.
I do appreciate people finally looking into these things more closely however and the time and effort you and the people who put this post forward and countless discussions that have been had and will probably still be had. Kudos, let's hope we can go back deflationary for a few years in the future as we saw in a couple previous years on that chart by dalz!
Yes, maybe it was a bit dramatic, but I've seen people taking advantage of Hive through VP (and GP) and no one does nothing. It actually backfired to me when I reported and I considered to stop building here.
And yes, the chain might not disappear, but would it be worth it? That's the question. How many witnesses or projects will stay active with HIVE at 0.05 or at 0.01? And we are probably won't be going that low, but it's a possibility if people keep scamming and printing money like crazy.
Maybe this is part of the issue with the way some think about things here, and I'm not directing this your way specifically, but. If people are going to instantly shut down their witness or project just cause the price of hive isn't great or you get unfunded for a few days, maybe you're not here for the right reasons.
Yeah, I know. In my case, I don’t mean shutting down the witness because that’s only about $50 a month. However, I do plan to get a full node, and with the current prices, I can’t afford that unless I get a part-time or full-time job elsewhere. That’s complicated because I already invest a lot of time on Hive, so I’d have to delegate more, and there are some things that are difficult to delegate.
Anyway, let’s see how things progress from here. I hope that things can improve, and we can all continue building. I have several projects on my backlog, and I’m excited about what we’ve accomplished with Mantequilla-Soft, the open-source project with @meno and @kesolink.
This is great! Shared with all the witnesses I know. Hopefully things can change. Hive is for everyone at the end of the day. We can always try and try till it works. Good thing is the building hasn’t stopped yet.
Totally agree.
We have lot of expensive projects going on. Don't know if it's realistic values asked (maybe just very expensive people involved) and I always have the feeling that is not very transparent the spendings and reports.
PS: If the APR drops to 6%, I’d rather move my savings to Base DeFi.
I just prefer seeing the DHF used wisely.
We went low, It might end up at 9% gradually, over time. Or maybe stay at 15%, in which case we are almost certainly going to hair cut price for Hive since HP holders take all the risk (down 97% from the high) and they get less APR than HBD holders, so the ppl doing the work (voting with HP) get paid less and take on more risk. it makes no sense, and now the APR is also inflating the chain at what was it? like 3.2% PA. something has to change, or dilution is coming.
However, this APR has nothing to do with the DHF, other than it is another source of non programmatic inflation being added to the supply of Hive. But IMO Hive is no longer in a position to fund such a high APR. When Hive was 1USD it could do it easily, but now its just burning money to market 15% to ppl and there hasnt really been an explosion in HBD holdings since the APR was at 20% years ago. so now this should help us see exactly how much this marketing effort costs us all. At the current prices, its around 3.2% of value take from all HP holders wallets and sent to HBD holders. its starting to get pretty expensive
I know that you are good with financial numbers more than I. But make totally sense to me.
A drastic lowering of HBD APR at this time may have unintended consequences. It may be highly inflationary. Hive stakeholders do not want HBD being converted during bear market, this is highly inflationary.
Buyers of HBD are compensated for risk with high APR when staking. Risk with HBD relates to the debt ratio, it is higher when debt ratio is high and lower when debt ratio is low.
Sound monetary policy for HBD would be commensurate with risk AND relate to the ideal outcome for stakeholders:
Hive witnesses have taken "stability" approach, which is poor economic policy for HBD. The price of HBD should be stable, APR does not need to be. While HBD savings is not the main driver of inflation at the moment, it can contribute to it in the long run. Drastic reduction of APR at this moment is likely to lead to HBD stakers selling and as a consequence, HBD being converted in larger amounts, leading to immediate high inflation.
Some great points here!
We think that it’s starting to look risky to hold HBD here due to looming haircut and so a bunch of conversions will likely happen regardless of the HBD APR. we also don’t think that the APR will get down to 6% anytime soon, but it is starting to become a major factor in inflation another 2 cents Lower from here and it will become significant. Maybe it will work out that as we move back into a bull, the HBD APR will be slowly decreasing as you say it should be above (which we would also like to see).
Respect and value ur opinion as always Demotruck. Appreciate the comment
Not sure if the HBD Savings APR is our main problem.
What about the DHF or value plan that gives lot´s of money to sometimes questionable projects? I see it more often that it looks that some of the bigger people here just shift the money back and forth between them.
Also what about initiatives that try to drag people here on Hive to then give them massive rewards? Of course they cash out right away. I think the problem is not just the APR.
I am not a pro about all these things of course. But these are my feelings.
Mine is likely ending in 10 days, so it will be a moot point.
Iirc, it mostly falls inside our particular criteria.
it was only the initial test proposal. Doing a new proposal every three months isn't practical and even one exhausts voters.
Sure, I understand ur point, the issue is that many projects don’t report, so the hive community has little to market in terms of new features. Need to encourage regular reporting to show how much cool shit is being built. This will hopefully bolster the price. It’s a tough one. Damn it
I’d love to see this cool shit you speak of.
Well if there was more reporting, I’m sure we’d see it, the reporting in and of itself kind of forces the issue
I'm not. If there was cool shit, I'm sure they'd report it.
There are multiple issues with our current DHF setup, which are rarely mentioned, which doesn't make them nonexistent... So, your post is a nice starting point for a broader discussion, and a wake-up call for Hive stakeholders, as they are those who are carrying the weight of all this... Every vote (witness or DHF proposal) has its weight, and it makes the VOTER RESPONSIBLE for it! The responsibility is taken very lightly, and unfortunately, people are not looking too much in the long term when they make decisions...
Some of the other issues that come to my mind randomly are...
If I want to launch a HIVE frontend, how can I compete with some other frontends that are funded by DHF? In a way, it kills the possibility of having a competition (it's a monopoly), which again means that maybe some better devs are discouraged from even trying to build on HIVE... Btw. frontends are just an example...
With the current setup, DHF-funded proposals have no incentives at all to see HIVE flourishing except for the possibility to be funded over and over again... So, in that way, your proposal of capping the fund with the HIVE marketcap makes a lot of sense... "If you want to get more funds, work for it!" At this moment, in a way, people work for HBD, and not for HIVE...
Building a self-sustainable project is the only way the DHF would have any meaning... What you proposed to give 10% back to DHF is a nice start, but it should be 110% back, if a proposal gets funded...
Maintenance expenses can't be equal to the project development expenses... The project has to have a business plan and define the "final product"... Everything after that should be considered maintenance, except for some crucial updates and upgrades of the product, which should have a separate proposal...
There are plenty of good ideas out in the community... As I said, this is a nice discussion-starting post, and thanks for taking the time to write it down!
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Good point, having a small chain with two cryptocurrencies like HBD and Hive creates massive conflicts of interest, and is a dangerous and opaque source of inflation (algorithmic stable coin). HBD gets higher APR than Hive stakeholders and projects bother more about the value of HBD than Hive if they are paid in HBD.
In many ways, yes i dont think its malicious, i just think its human and the code is what it is, at the moment
hey there @ph1102, cant disagree with any of this. I hope that people are more rigorous with their comments on future proposals, most of these points are pertinent in helping make projects accountable in some ways
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We had a 20% hbd APR and decided to decrease it to 15% due to inflation and such. Nothing much happened in terms of something positive. The main reason is the DHF, everyone needs to understand that. Another reason is that we don't do anything collectively; everyone does their thing for their own sake.
It's not like we have endless money or something to fund whatever. Also, the way we decided who would get the funding is pretty much the opposite of democracy. Even let's say we are okay with a few people determining who will get funding, there have to be multiple layers of protection in terms of Hive and its people.
What will happen if they don't meet their goals?
Where is accountability and in what form?
If i write down that the cost of a dev will be 5k per month and i hire an indian guy for less than 1k and keep the rest, who will know? Where is transparency?
We don't follow collective marketing efforts. We need users, we need investors, we need builders, yet we can't even make on decision about DHF. I keep on hearing and talking about this for years and nothing is happening, it's crazy.
Lowering HBD APR is not the solution if nothing happens with DHF and we don't follow a clear path. It's like we're constantly avoiding it. Also note that HBD APR is something that everyone in here can get into. Even people who don't have a lot of money can collect 1$-10$-100$ and receive, let's say a more stable "income". Mostly, one can get a DHF funding.
It’s tighten the belt time clearly. The lack of structure in DHF process, lack of follow through, lack of proposed kpi’s or demonstrated kpi’s after, the lack of regular reporting… it has felt bewildering.
and then there is Value Plan which is even more absurd hive reality. We have GP who was not voted into the position and no one even can explain how he got in the position of controlling this massive marketing budget.
I dont think GP is a bad person or ill intentioned. It’s just crazy to not have that position be voted and be overseen by a larger committee.
I’m thankful that we are finally openly talking about money printing.
Im hopeful that @guiltyparties will move towards a more of an on chain committee / reviewer system within Value Plan so that inflation distribution is done by more people and over a more rigorous decision process which is directly accountable to the community. I like to think he will move to something like this.
I believe that we have been living much too cosy in our own bubble. Creating and developing tools that are mainly used on Hive for Hivians and not focusing on Partnerships where we create dapps and tools for people and companies to use.
Not sure if this sounds logical, but I guess I will just go with the flow here and speak my mind. Better speak and make a full of my self then not say a word.
First I think we should disable dapps like @reward.app that allows Hivians to take the full amount of rewards and cash it in. Because of this possibility Hivians are powering up less then they used to.
Stop buiding dapps and tools that are only ment to survive out of Hive users. This means that Hivians will be spending HIVE and HBD on the dapps/tools and the owners/developers cash it in and there go our coins.
Devide DHF in to 2 or 3 funding sectors with different criteria and funding size.
Defund Valueplan unless Valueplan criteria will be changed. And I believe that we as a community have the right to make that criteria for Valueplan. How is it possible that 1 or 5 people decided that this is Valueplan and we want this amount and we will do marketing? Hive is a community and not everyone agrees with how Valueplan operates. Also we have ZERO information about the amount of users that have been onboarded to Hive with Valueplan. I think Valueplan should not be one DHF proposal, but seperated in many different DHF proposals so we as a community can decide who to fund and not Valueplan decite who to fund. That is why I wrote that we need 3 different DHF sectors for different size of funding.
I will probobly think of more stuff to write, but overall I see Hive and our community sufficating slowley. I 100% agree that changes have to be made.
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yes the idea of Buckets for value plan has been discussed. Maybe it will happen. I hope so, It cant continue that one person can direct almost 2% of the inflation. that is just not in the spirit of decentralisation.
I know @starkerz 's been pushing recently on trimming down the expenditures and avoiding a potential death spiral. I highly value this, as I understand the positive intentions for Hive ecosystem overall.
I agree with a lot of points mentioned above, with feedback on a few (and a perspective based on our experience/involvment):
It would be great to see more developers participating in Swarm of Swarms.
It could influence proposal voting. As in, voters choose to support Proposal 123 because the funding recipient has track record of transparency and consistency, sharing weekly updates.
yes that is actually a GREAT imitative! i know that @sagarkothari88 was taking part in it too. Need to find a way to get that on trending more often!
Thinking about gathering some stats. Since it has been running for 63 weeks, we can see who has shown up most often. I think @techcoderx will be the leader.
I share too 🥹 every week 🥹
Please help encourage more participation from others!
All very very valid points @mcfarhat, as always. I will include the open source point, totally forget about that. but its a great point.
The HBD at 15% to "market" the stable coin will never really work while there is a 5% fee to get any stable coins. Maybe future liquidity pool developments will change this, but while HBD was not on exchanges and there was a 5% fee, the idea of getting people to hold HBD for the APR was never going to, and did never work out.
Will be nice to see if you can lead by example and find a way to cut funding somewhat while still keeping the most critical parts of innovation work you are working on going within reason.
Unfortunately, Hive just isnt at 5 USD, and so the market is calling us to look at tightening
The somehow funny aspect of some DHF 'projects' that suck Hive is that they fail to bring the sort of value that justifies their bill - new active users, investors or projects that Hive badly needs. At the end, they end up taking value away from Hive. It's even funnier that the real marketing projects bringing value are left to run without funding. Both of these situations keep sending the value and existence of hive down the drain
We just gotta keep on working on, it will all come through eventually!
Why keep funding value plan which has been a hole to throw money into? They should get funds only if they show bills and community approves the expense, event by event with a poll
I thought that 15% meant to bring investors, clearly it didn't work out - best idea atm would be gradually lower it down. Additionally it would make sense to keep important & necessary infrastructure and let it re-build by itself (or rather us) , we got enough people which are more than " if you don't pay me I go to another chain " - and luckily / hopefully we are growing, we are more bullet proof against those that trying to squeeze out of chain.
I'm all for more professional communication, regular reporting, reevaluation
I've posted and talked about it quite a lot in the past, even when it was 20% it barely failed to bring in any new investors - all we got was finance bro's who care about APR already on here or some Steem whale to stake 2m hbd because he understands the chain and doesn't mind sending it in little at a time and potentially also withdrawing it little at a time if he feels the apr is too low.
Had there been some effective promotion along with it it could've done well, but even the very little attention it got was mostly seen as "that sounds like a scam" and that was quite literally all the attention it got. I couldn't point to one account where I could say "this is a new investors holding more than ~100k hbd". Yet we continued down this path for 3+ years now or so and even at these prices there's very few regular users converting hbd into hive from what I've seen.
yup, im seeing this too. All good lessons learned
Investors were never going to come with a 5% fee to enter HBD in bulk. The whole idea only worked if we found a way to wave the fee for legitimate, large stable coin investors. I dont think we even attended the large stable coin conference in Mexico this summer.
I know of at least one project that has failed because it never had a funding mechanism. It is severely underappreciated that we have it imo. That said, I have no problem with stricter funding.
Also I doubt these relatively small numbers have much to do with price. Price is set by exchange whales mainly. Last year we had like 3 Billion (!) weekly volume on Upbit alone. If they decide to buy, we'll be at $1 in no time again. Unfortunately, there doesn't seem to be much rationale behind it other than making money with pump & dumps.
And that is a problem. We have a lot going for us to actually give everyone reasons to buy, regardless of what whales do or do not
Alright, newbie stepping into the deep end here, please don’t throw tomatoes, ok? 😊
I agree that "printing" money is dangerous, and I would hate to see HIVE lose its reputation. That should be avoided at all costs.
As far as I understand, if one of the main issues is the size and length of DHF proposals, then making them smaller and shorter sounds like a smart and practical step. Reducing spending in a responsible way also makes sense. Without clear accountability, there is too much room for inefficiency and even potential misuse. Three months, clear goals, measurable results, and smaller budgets should be the minimum expectation for anyone being funded to provide a service. In my view, proposals should follow something similar to the S.M.A.R.T. approach: specific, measurable, achievable, relevant, and time-bound. Projects should also clearly show what they accomplished, what value they produced, and the inflation impact they created.
That being said, lowering HBD interest from 15% to 6% feels like a very big cut. I do not know the technical reasoning behind it, but 6% sounds extremely low from a user perspective.
Regarding “maintenance mode:” Forgive me if I misunderstood the point, but I am not sure whether shifting into that mode is the right approach. I think new features or improvements should always remain a priority. For example, it is my perception that I have not seen any visible improvements on 3Speak.tv. since I arrived on HIVE 3.5 years ago. The interface has barely changed, performance can sometimes feel slow or outdated, and overall growth seems more limited compared to other major HIVE projects. If “maintenance mode” means no improvements for another two or three years, that would be unfortunate.
There is one question I have, and I am not sure if it is relevant to this specific discussion, but it is something I have wondered about for some time. Is it actually better for the Hive economy when users earn HIVE by creating content, or when they buy HIVE directly? I would love to hear different perspectives on that, because I honestly do not know which of the two strengthens the ecosystem more.
Overall, I support the intention of protecting HIVE’s economic health, and I appreciate seeing this discussion happening openly.
Ultimately we dont think HBD APR will get down to 6%, somewhere around 8-12% is probably where it will end up, we are kind of playing the low extreme of the curve to see if we can get it to move slightly lower.
Innovation is of course important, however, it should not be at the cost of sending the price to the haircut and expanding the supply to such a point that normal investors become diluted.
IMO right now the best way and lowest risk way is to earn hive from creating content, using tool, spending hbd, and taking part in @hive-echo by @minnigunner and @artakush and #POSH by @acidyo
3speak has not moved for so long because the Hive price has been so low for so long now that we cant afford to progress. but there is an update coming very very soon which people like @meno @eddiespino and @kesolink have been doing amazing work on!
The HBD APR% you mention sound much more reasonable to me. I think understand better now what you mean about balancing innovation with economic stability.
And just to clarify, I wasn’t criticizing 3Speak.tv I only used it as an example to highlight that if 3Speak.tv wants to be appealing to users who are used to platforms like YouTube or Rumble, ongoing development is essential. But, I fully understand that finances play a big role in what’s possible or not. By the way, thanks to @meno, @eddiespino and @kesonlink for the work they are doing behind the scenes to make 3Speak better.
Regarding your suggestions, I’ve definitely been focusing on creating content, and some of those initiatives are already on my radar. I participated in the @hive-echo CTA and found it not only fun but also a great way to introduce Hive to web2 users. I need to start participating again.
Anyways, I’m still learning, so I really appreciate conversations like this that help me understand the ecosystem better. Thank you for the explanation and the work you do, @starkerz!
15% APR is only paid on HBD in savings which presumably isn't all (though I have no idea what the percentage is).
I seem to recall a while ago that there was some discussion about introducing a certificate of deposit style mechanism to HBD whereby you would get a higher interest rate if you locked it up longer. I guess nothing ever came of that. Personally, I see no reason to hold HBD if it drops below 10% but I'm willing to lock it up longer to get higher rates.
I'm not sure what the solution for the DHF is. Maybe there should be a maximum distribution rate and once that rate is surpassed, nothing else is funded.
Yes, would be nice to see a programmatic cap on DHF outflows. but this will reqire coding. so we are trying to do this the manual way, via social consensus. We will see what happens and whether or not the community has enough impetus to reduce the outflows and the money printing itself or if it wants to continue on this path and hope for one of the Dapps to go viral. IMO, we will end up somewhere between the two extremes, which may well, just about be good enough to get us out of this downward spiral
Savings is about 80% of the total (not including HBD stored in the DHF fund, which is excluded from most of the calculations).
It seems to me the fundamental problem had been and probably always will be the Ninja Mine. It was a problem when Dan and Ned had it, It was a problem when Justin bought it, and it is still a problem now that the DHF has it. Hive had a golden opportunity to burn it at the Steem/Hive fork but that did not happen and here we are.
What to do now? I don't know. Will the above suggestions help? Probably. But what I don't see is a serious discussion about what to do about the Ninja Stake. I hope the chain can survive the Ninja but I'm beginning to think it can't. Just too much money and too much greed, IMHO. Sorry for sounding so pessimistic but it is hard to stay positive these day.
We can survive, if people start buying.
Probably another 50% down from here should make the power to price ratio much more attractive.
wow it took this long to take action. this should've been done months ago. why wait until the damage is done to do something. All this was known (the data and math could've been done any time and the damage could've been minimized way earlier but nobody made noise because as decentralized as people/hive claim to be; it's not. there's big top whale holders making decisions and some of these decisions aren't really in the best interest of hive.
future proposals need to be way better, way more strict and all spending should have accounts publicly shared with receipts to see how the money is being spent so we can take accountability more
It's still better to act if you know things aren't working out, than not act at all, right?
true but would you rather act when someone stage 1 cancer or stage 4?
Doesn’t necessarily need receipts, as there are lots of personal details on them, but regular spending reports is good to see if spending is ahead or behind, what was spent and why and wether the spending is affective, that’s good enough to show productive spending is being done and as long as the spends are reasonable, it’s good (IMHO)
personal detail can be blurred out. key is the items being purchased and for what amount. Like we don't want to see stuff being overpriced and whoever handling the budget to pocket the extra amount. with everything being more transparent as well there might be fellow hivers that can see the costs and maybe even offer a cheaper, better alternative.
Yes agreed, and this is normal practice when it comes to making spending accountable, and should be expected in regular reports from funded projects
Double entry bookkeeping avails the receipt only upon audit. However, when audited, those receipts need to back the books. GAAP is good enough for every 7-11 in the world, it's good enough for Hive.
The transparency with value plan should've been done from the very start really. But it's great to see people starting to actually ask where the funds are going and also stating the importance on whether they're even justified based on performance. Actual transparency before spending and after would really help.
agreed!
First this is a great analysis of the funds and a real picture of what is affecting the Hive economy. I would love to see Hive being successful. However there needs to be some sort of consensus that can be reached between the development that needs to happen on the chain as well as the possible gatekeepers of the fund be held more accountable including the beneficiaries. I have talked on this topic about having a group that can report on the current beneficiaries of the DHF and can shut it down if they don't comply with their projections.
we started a group called @steemba back in the day, it was to advise on projects that were worthy of receiving funding. had a bunch of projects involved. Maybe we should be doing something similar on Hive. Appreciate your comments as always JZA
I fully agree with:
Not sure whether it can realistically be achieved, but it should be tried
In my opinion value plan brings a lot of value ... but I'm not sure to whom, and it's manifest that not to Hive. I mean ... rally car, seriously?
I'm abstaining on the HBD APR. Because it's an unique selling point. We don't know how to sell it, but that's not its fault, it's ours.
I think it can easily go to 14%. At 12% we're no longer standing out from the crowd and then we might as well reduce it to 6 or 7%
Actually, since there isn't much I can contribute in terms of voting, but based on my thoughts regarding the issues that were brought up and discussed here, I decided to make a little service that is designed to accrue value outside of Hive inflation, and (ideally) combat some of the selling pressure by injecting a bit of value into the ecosystem. Check out my announcement post, would love to hear feedback!
I think there is more to focus on besides these important factors to reduce inflation. The inflation can be adjusted when more outsiders join the economy with new money to absorb the inflation; otherwise,the little inflation can make hive losing value if the demand is not increased. We are lacking investors and projects that are not adding value to the Hive most of the cases. Despite these high APR and massive DHF funds expenditure, we need a more rigorous way to make Hive a good player in the sphere through marketing aspects that many chain adopts to make their shifts into demanding ones in the sphere, but Hive is lagging behind being a solid blockchain, but has no proper marketing strategy to promote it in my observation. May be I am wrong but the crash is so severe that affected all with more severely than the inflation is in reality. I hope these steps will be taken into granted by all.
Hope so too! yes we really really need to focus on marketing initiatives that clearly bring in new users and have a low cost per onboard. This should result in us getting partnerships with existing apps with user bases too imo
Do you believe they (especially whales) adapt to these conditions before voting? Honestly, I don't believe it.
We need a mechanism to downvote these proposals. The gtg_return proposal can't stop this money leakage; it needs a strict mechanism like flags if we feel something is not worthy enough to earn from the DHF.
Anyway, it's good that big HP holders are starting to talk about this. I think we are the only chain that prints money out of thin air and pays these proposals without questioning what they are doing. 😄
People who raised their voices against this are either labelled as spammers or added to the blacklists of whales forever. At least now you are discussing what can happen here. Actually, these whales were the first people who understood the risk we are in—because they hold millions of HIVE, which means millions of $$$.
Let's hope they will strictly follow what you pointed out here.
Cheers~
Good that we can have the conversation here!
I guess more people could vote for the Return Proposal, but projects ought to know to expect less funding.
I'm not against reducing the HBD APR. It's pretty generous for now and was higher before. I'm sure people love that income, but we cannot afford to be greedy when the platform is suffering. We have to balance attracting users with building something sustainable.
If everyone sent 100% of all Rewards to @null we could reduce Inflation to Zero
Give it a Try….
Everyone should set the Beneficiary to @null for 1 year until we get inflation to zero … or even Negative
Let’s see who wants to save Hive …
This blog is set to null, there is a start :)
Everyone who posts on Hive should set 100 % of Every Blog Post reward to @null
Let’s see what Whales (besides me) are willing to do this to save Hive.
I bet you I am the only one who will do this.
Well, I do care much more about Hive per se than some cents I get from it (since I live in Europe, Hive is not really changing my economy 😅)
Sooo I think I will. I'm still a little fish here so my contribute would be insignificant. But at least my actions would be where my words are. As I like to say: BURN 'EM ALL 🔥 (usually referring to billionaires)
Yes.
This is how we will save Hive.
Little fish like you and me setting all our Rewards to go to @null
Somebody needs to Save Hive ….. Might as well be us .
Hi.
Thanks for the analysis.
I had offered to lower the value of Hivewatchers' proposal and also asked which value would be acceptable in the private DHF channel.
No one responded.
I have read the whole thing and I completely agree with you.I also want hive to be in a stronger position in the future.I know about its past.At one time all the steem users came out of there and within a short time hive got love from everyone.Within a short time hive was in a strong position and within a short time it gained popularity.From the past predictions I have come to know how strong it was, although I am a little over a year old here.At the end of the day I love hive and we want it to improve more in the near future and maintain its strong position.For that I welcome all your initiatives.
It was a long read but worth my time.
Whatever step we can take to see that things get better with hive is much welcomed !!
Great job guys 🔥
I don't know how many years it will take (I heard it somewhere) for Hive to stop producing. But I do agree with supporting projects that can help the Hive economy and the world.
On the other hand, lowering the APR to 12% isn't all bad if it works to combat Hive inflation and allows us to survive in this uncertain crypto market.
Don't forget about Latin America; there are other countries besides Venezuela. Blessings.
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good to see you here @davot
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STOPI completely agree with you
Although I never thought that a higher APR% for HBD would affect Hive inflation. I was actually happy hoping it would return to 20% but considering these reasons I now agree with you that it should be kept at 6%.
Glad to hear you want tighter monetary policy
I think I'll just kick back and watch the show. Been out of the loop for too long.
Im glad you are here to watch!
Paying attention.
Plenty to read here and I hope to see more. A lot to think about.
I still give a shit about the place, after all these years. Not much else I can add to that. Well, that's not entirely true. There's a lot I could say. Prefer to see where others are at, after this many years. I'd prefer to be at the seeing results stage by now. So I want to see how everyone else plans to get there. Gathering outside perspective.
Keep your cool and carry on.
Agree on all points, how does Value Plan get its quarterly budget of 250K paid out?
Via DHF proposal. its normally sent in a short period of time, so they money quickly enters their account for the quarter and then the proposal is no longer shown on the proposal list.
IMO we should have several value plans for different things (travel - food - accommodation, workshops, others)
I believe Hive being unique needs unique strategies to fund promotion. Did anybody considered idea to change entire model of marketing fund to delegating HP to help building communities? In that way we'd remove conversions, have KPIs on the table and community leaders would be rewarded with APR as HP. In that case some part of HIVE from DHF would have to be powered-up, and then decision process behind delegation could be similiar as Hive Fest round-table arrangements.
That was a practice that Steemit inc did on hive. it seemed to work reasonably well, although favoritism still prevailed there in some cases
Excellent. Thank you for letting us know.
Let's compare goals versus effects. Instead of searching for ways to lower DHF outflow and money printing try finding another goal which has this as a side-effect.
For example maybe if the DHF would not print NEW money and instead paid with money which are already in circulation the side-effect would be a stricter release mechanism, big MAYBE.
Yes would be great to do this without using the community's money (your money) but if you go ask ppl if they will personally fund the funded projects instead of voting for them with the DHF, i dont think i need to tell you what the answer would be
That's exactly how the DHF should work, then. The reason we're funding a rally car is that's it's free,magical money, and not anything anyone has any stake in. Send the Founder's Stake to @null immediately. Then we can leave HBD interest rates where they are, or even raise them, as @demotruk points out we should during a bear to discourage conversions,
20% here we come!
When Hive hits parity with HBD, we can drop rates gradually to encourage conversions, which will also help to ease volatility. @demotruk, correct me if I'm wrong.
Did anyone see 'The Gods Must be Crazy'? The DHF is like that coke bottle that fell from the sky in the Kalahari, nothing but trouble, because it just fell from the sky. It cursed Steem, and now it's cursing Hive. Restore our fiscal diligence, our prudence, by burning all free mined stake that just fell from the sky. Nothing good ever fell from the sky.
There were towns that received incredible bounty of minerals that fell from the sky, and they would confirm that bounty was a curse instead, if we could ask the residents of Sodom and Gommorah about it.
It depends on witnesses getting on board with this kind of policy. If they don't reduce during bull market then it doesn't work. In the long run I think it should be made a stakeholder vote (based on stake-adjusted median). It's economic/monetary policy and stakeholders are the ones paying the cost of being diluted.
TBH I'd rather stick with 15% now and gradually reduce once Hive price starts to recover.
Burning the DHF would end the hemorrhage of Hive onto the market from that source, and that would strongly assist the restoration of token price.
It would be a strong signal of commitment to fiscal prudence.
However, I honestly think the market isn't really watching for signals relating to Hive governance decisions. Rather, the price goes up or down primarily due to broader sentiment, with token supply having an effect as the rubber hits the road (ie. more supply directly landing on the market).
I don't know. Projects get funded all the time outside of Hive. I think it could work. I've had this idea for a while now but only published it recently. In that post I talk about one way the DHF might be able to support popular efforts at a lower level while most of the funds would be coming from other Hive users.
https://peakd.com/hive-102930/@moeknows/someone-steal-this-idea-swarmshare
I'd be interested to follow your progress in this. Would help with inflation and dilution situation imo
😆 Well, there's a reason I'm asking for people to steal the idea. I've never been great at bringing projects like this to completion. Hopefully someone will take it and run with it.
I'd love to be involved though.