I recently got a message from @howo inviting me to support his renewed proposal (the current one is about to expire).
First, a few clarifications for those who are not aware what a "proposal" is, what is its purpose, and how it works.
How is HIVE distributed?
By now, most people interested in the "crypto" topic are able to answer the question "how is Bitcoin created and distributed?". The bitcoin blockchain appends a block every 10 minutes. The "miner" who manages to "solve for the right nonce", sign and append a block first receives the reward of 6.25 newly minted bitcoins (plus the transaction fees of the transactions it has chosen to include).
But Hive works using the DPoS consensus, not the PoW of Bitcoin. In DPoS, miners are replaced by "witnesses" which get a block to sign with a frequency which depends on the total number of "votes" they receive from the community of users, with a twist: unlike today's political democracies, where each person has one vote, "voting to elect Hive witnesses" is more akin to today's "shareholder democracy" in force in publicly listed companies - where the equivalent of "shares" is, here, the Hive Power.
So all the newly minted HIVE is ditributed to the witnesses, right?
WRONG! One of the best features of the Hive blockchain is that, unlike Bitcoin or Ethereum (or almost all the other blockchains with a few exceptions), it is not a "computocracy" ("Those who master the computer, hold the power").
As a matter of fact, only 10% of newly minted HIVE is distributed as rewards to the witnesses!
The vast majority, 65%, are used in the "reward pool" which serves to incentivize authors and curators.
15% are used to incentivize people to stake HIVE (transform it into Hive Power, HP) rather than keeping it in liquid form.
Finally, 10% are used to feed a DAO, the "Decentralized Hive Fund" (DHF)
Source: a PPT slide I made for a class I teach. Explanatory text in French
What is this DHF?
To find out more about the DHF, you may begin by asking ChatGPT:
Me: What can you say about the "Decentralized Hive Fund" (DHF)?
ChatGPT: The Decentralized Hive Fund (DHF) is a key component of the Hive blockchain's governance and funding mechanism. It was created to replace the Steem Development Fund (SDF) after the hard fork that led to the creation of the Hive blockchain.
The DHF is a decentralized autonomous organization (DAO) that manages a portion of the Hive blockchain's inflationary rewards. The DHF uses these funds to support various initiatives that benefit the Hive ecosystem, such as funding development projects, marketing and community outreach, and other ecosystem-building activities.
The DHF operates through a proposal system, where anyone in the Hive community can submit a proposal for funding. These proposals are then reviewed and voted on by the Hive community, with the highest-voted proposals receiving funding from the DHF.
The DHF is an important part of the Hive ecosystem, as it provides a mechanism for the community to fund and support projects that can help to improve the network and increase adoption. It also helps to ensure that the community has a say in how funds are allocated and used, which helps to promote decentralization and community involvement in the governance of the network.
Ok, but how does the DHF actually distribute the funds? Well, it works like that: there is a "benchmark proposal" called "Return proposal #0". Anyone can vote for it, which "raises the threshold" for receiving funding, as you cannot vote "against" a proposal.
Proposals with less votes (measured in the sum of HP of the voting accounts) than the Return proposal are not going to get funding.
Hive Core Devs
Hive evolves thanks to its "core devs", of which @howo is one. I appreciate him and his work a lot and reckon Hive can use a lot more people like him. Howo has worked on RC delegations and recurring transfers and other features being packed up for HF 27
In this respect, I regret @jga is not among the Hive core devs anymore and chose to go work on Koinos instead.
New features: a Hive-Backed Euro should be a priority
My feeling is that the DHF would benefit from more publicity in order to get more users involved in choosing the development priorities. It would also probably benefit from increased transparency and scrutiny. There are a lot of proposals getting funding but it is not clear how coordinated they are and whether they aggregate (whether spontaneously or though some "nudges") in a coherent vision of where Hive (which is the backbone of the community) is headed.
I believe the HBD is one of the most powerful features of Hive and reckon adjoining a HBE (Hive Backed Euro) to it would do a lot for the increased popularity and usage of this blockchain. I would very much like to see the Hive core developers proposing to work on including a Hive Backed Euro (HBE) complete with an internal market, an LP (stabilization fund) and an AMM, in one of the next evolutions (called "hardforks" on Hive, despite the fact they do not ressemble Bitcoin or Ethereum hard forks).
What do you think? Would you support a proposal to introduce a HBE in the next Hive HF?
I understand why an Euro peg would be easier to follow by the Europeans. And that it would offer the chance to arbitrage between HBD and HBE. And that Hive would seem less US-centric (which it isn't, I believe).
Let's say, hypothetically, HBE would be introduced. Hive is currently a two-token economy, at the base layer. How would that change things? This adds to the complexity of distributing inflation where HBD is currently involved (what to distribute, HBD or HBE?). Conversions to and from HIVE as well as the haircut rule - core Hive economy elements - would also need to be redesigned. You no longer have one debt token, you have two of them: HBD and HBE. I don't know, maybe in this case the expression "if it's not broken, don't fix it" applies.
HBD has in fact nothing in common with USD apart from the soft peg to it. 1 HBD is valued, at the blockchain level, at 1 USD worth of HIVE. So, it's HIVE, not USD. The peg can be changed much easier - if at one point this seems necessary - than adding a new token at the base layer and changing the tokenomics.
I wonder if a different solution might be easier to implement. We would continue to have only HIVE and HBD on the base layer. HBD would continue to be pegged to USD. User interfaces could offer the option to display amounts as Euro or other currencies (Ecency has that option in Settings).
Thank you for starting the discussion.
I pursued the discussion in a separate post in order to not make the comments unwieldy:
One of the elements of @howo's proposal is facilitating the monthly core dev's meetings which are recorded and posted, with a transcript, on @howo's blog. Here's a recent one. While this doesn't address fully the question of a coherent vision for Hive, it does allow us, the owners of Hive, the opportunity to scrutinise what's happening and put forward our own proposals (whether for funding by the DHF or not) for a vision for discussion, critiquing and evolving.
I like the idea of a Euro-backed Hive token and I guess that once the principles are in place, it could be extended over time to other fiat currencies. I wonder how many Hive users there are in the Eurozone and how this compares to other geographical regions. I know @steevc has published some work on this in the past (I believe he has a script), perhaps we could ask him to update that and include an aggregation for the Eurozone.
I'd also be interested in crypto adoption across the Eurozone and how that compares with Hive adoption. In the UK, the last report (about 18 months out of date now, I'm expecting the next one in June) suggests that about 3.0 million people hold or have held cryptocurrencies (roughly 4.5% of the population). Using @steevc's last Brit report, by comparison, it looks like there are 508 resident accounts with at least 1 HP (170 active posting).
Yes, I know about the monthly core devs, noticed those by looking closer to howo's proposal :)
Thanks for the figures, I think it's important to have this kind of data. As I'll explain in a separate post, I think HBE could spur adoption in the eurozone
Appreciate your clear writing style and bonus points for use of the word "reckon." 😀
The real question is: have I used it correctly? 😄
Absolutely, I reckon you did indeed.
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My first thoughts on HBE are positive. I think it may be preferred by those living where Euros are the accepted fiat currency. It also might add Forex type of trading possibilities as people can hedge one fiat against the other.
Are other people talking about HBE or is this a new idea, maybe just suggested for the first time in this post? Are any devs or core developers seriously considering it at this point in time?
Thank you. Good question, I recall the idea has been floated around already, I seem to recall a discussion with @acidyo. I asked @jga and in his opinion it's technically not too difficult, the main impediment he sees is getting political consensus. I don't know what the core devs of Hive think about it, I hope they might drop in here and lay out their views. Any thoughts, @blocktrades ?
Hello from Cuba. I agree with your reasoning around a HBE. But I liked as well how you introduced how Hive works for anyone, and the difference with other crypto environments.
Best regards.
Thank you!
👍🏻 Very good summary of the distribution of newly created Hive and the DHF. Very interesting to see how much ChatGPT knows about our Blockchain!
Am not a big fan of stable coins though and think the HBD is enough, no need for a HBE.
Thanks!
Interesting that you are "not a big fan of stablecoins". Why is that? Care to elaborate?
Question for me is: Why do we need Fiat currencies mirrored into the crypto universe? If I want to own a dollar or euro I can just hold the real thing and not buy a stable coin.
Second thing is I don’t trust the stable coins that much, maybe because of a certain event around Terra Luna…🤷🏼♂️😜
Thanks for uploading your PPT-slide on how Hive is distributed. Very useful! Adding HBE to the payment ecosystem would definitely benefit the Europeans (user perspective). We have quite a few UK members on Hive, therefore the next logic step will be the question: What about HBG (pegged to GBP)?
For people transitioning from your typical web2 social platforms to Hive things are already quite complex and complicated as they are. However, if devs can integrate another payment option like HBE or HBG or HB(XYZ) seamlessly, I don't see why it wouldn't benefit the onboarding process in particular.
HBP "Hive Backed Pound" - why not, see shanibeer's comment above! :)
Let's talk, let's talk, let's talk. This thing can open up incredible growth scenarios! 👏🏻👏🏻👏🏻