Recent price action
HIVE is currently at 10.9 cents and at a support level where its descent stopped last spring (green). HIVE/BTC (yellow) has crashed through the floor, however.
Image from coinmarketcap.com
The blue line denotes market cap and it seems to be holding much better as it always does because HIVE's inflation schedule is faster than most coins.
A handful of successful apps
Hive has a handful of successful second layer apps. Splinterlands and LeoFinance come to mind first. There are some smaller and newer ones such as dCity that some people seem to be playing. What separates the successful ones from the rest is clear and detailed plans, constant development and measurement of progress.
Content creation with base layer rewards is failing to capture value
Hive's predecessor which Hive is a fork Steem of introduced crypto rewards for blogging in the platform's native token. It's still an interesting idea. But when the completely unprofessional manner in which content creation was treated only as a token distribution mechanism with no attention paid to how it could be harnessed to capture value is embarrassing. There is a big difference between the way this is handled on LeoFinance and the way this aspect of content creation has been totally neglected on the base layer ever since the days Steemit was the only app on Steem.
There's four years worth of content on stored on Hive and the front ends and it is capturing zero value. At one point there was quite a bit of traffic and that's when steemit.com's Alexa rank was 4000th. At that point, Steemit, Inc should've been accumulating a war chest to get through the bad times and paying attention to capitalizing on the high Alexa rank through an advertising model. There was a lot of opposition that idea until it was adopted in November 2019 out of sheer necessity by Steemit, Inc's managing director Eli Powell as the company was deep in the red. For the longest time, dogmatic opposition to ads had been prevalent among the user base as well. Ads did make a small difference along with cost cutting measures at Steemit, Inc.
Advertising is ultimately the way all the content will monetized for the most part. In the beginning growth is key, not revenue, though. But so far we haven't seen much of either.
Apart from Twitter spamming there is no serious attempt at increasing the reach or relevance of the content
It would be useful to know how effective sharing the posts on Twitter is. No consistent reporting has caught my eye. I'm glad if such efforts exist but there are none that I've heard of. The campaign has resulted in at least one large account being banned permanently from Twitter. I accidentally stumbled on Dan's comment that tweets with a link to a Hive post get shadowbanned on Twitter. No wonder my posts when I've shared them haven't had any comments or likes in recent times.
One of the biggest problems these otherwise laudable - simply because they finally exist in the first place - to make the platform better known is the lack of metrics used to follow progress and change course if necessary. There is little in the way of feedback.
The second layer is taking the lead
As far as I can tell, LeoFinance is tackling every single one of the fundamental issues I've mentioned here and many more. I listened to the latest LEO Roundtable Podcast. I think the founders of LeoFinance have it together. They seem to be thinking about the right things. The roadmap makes sense and it's getting implemented at a breathtaking pace.
Development at the base layer is focused on base layer issues
Hive developers are busy upgrading the base layer as they should be. Hard Fork 24 is done except for tying up a few loose ends. I heard Khal say in the roundtable that he heard from some Hive devs that the poor documentation of some APIs is causing problems. They haven't been all fixed, yet.
The Smart Media Token (SMT) protocol will make the second layer trustless
Scot bot is the one server that handles all the second layer token transactions on Hive. They're controlled by a single entity. If there was a decentralized network instead of a single server no SMTs would necessarily be needed. I wonder how much investment in the liquidity pools apart from Hive users willing to provide liquidity out of their other cryptos we will see until the second layer is decentralized. How much will investors care?
HIVE relegated to being strictly a utility token?
We're already seeing a slow drift downwards in the price of HIVE both in fiat and satoshi terms as well as its market cap ranking among other coins going down. Since HIVE was never designed to be a store of value coin as opposed to a utility coin deriving its value from all the activity on chain, growth will be required for it to grow in value and see positive price action. A handful of successful applications won't cut it unless they grow really big. All eyes are on LeoFinance and Splinterlands.
Has HIVE been systematically marketed to developers?
DApp developers are the people Hive should be marketed to. Not end users who should be the targets of marketing by DApps instead. Is there a corner of the Internet where a lot of DApp developers hang out?
Should content rewards paid out in HIVE be done away with?
This is a hotly contended issue. The second layer should be ready to take the base layer's place in rewarding users first. When would the second layer ready to do that? The following things should be in place:
- SMTs or decentralized Hive Engine (Scot bot replaced by a decentralized network)
- a fully developed set of tools to deploy wrapped tokens on Ethereum and other chains to make use of liquidity pools on DEXs like Uniswap - requiring no coding
I may have forgotten something. But that short list gives you an idea, which is that to thrive Hive needs A LOT of apps with tokens having access to as much liquidity as possible. There need to be hundreds of apps that generate serious attention for HIVE to continue to appreciate. Even its speculative value is tied to development taking place.
The key is reusable tools. @khaleelkhazi who is the founder of LeoFinance is also its lead developer. People who have both leadership skills and developer skills are in short supply. In the best possible case, for communities where there is vision and drive but no coders available, the availability of reusable tools can make a huge difference. Since all the projects on Hive are joined at the hip because they share the same base layer, a degree of collaboration by paying attention to the reusability of the tools developed is imporant.
If HIVE dips significantly below 10 cents and stays there for a long time, HIVE rewards will turn into a long-term investment as opposed to an asset for speculative investment. That will put off those content creators who use at least some of their rewards to live on. I'm a bit worried about those content creators who do not yet have thriving second layer app like LeoFinance for their content.