Good morning Hivers.
This is a preliminary sketch for a proposal to the DHF that I have had in mind for some time. Before making an ‘’official‘’ proposal I think it's better to make a post like this one to get feedback while I continue maturing the idea.
(It's also my first proposal so if there is anything I should know about creating proposals, please let me know).
I will try to be to the point but still be specific enough with the details.
Background
Since Hive is Hive we have been financing a multitude of propositions over the years, the most relevant being those dedicated to services (Keychain, Multisig...), apps (Actifit, Peakd, Ecency, Splinterlands) or marketing (Leofinance, Valueplan...) etc.
Of all of them we only have 1 strictly ''economic'': The HBD Stabilizer.
While the service is much needed in our chain, it is not actively seeking ‘profit’ in monetary terms.
My proposal has exactly this goal: Achieving an economical benefit (from common resources) for HIVE.
My plan for the ''Hive Hedge Fund''
1) Funding
I had several figures in mind, I started with 250K HBD but really a more ideal figure I think would be 500K HBD.
So funding would be adjusted to these figures without overshadowing the rest of the proposals.
10K HBD daily for 50 days = 500K HBD
2) Storage and Initial Use of Funds
Now it comes the ''tricky'' part.
My idea is to store 100% of these HBDs in a multisig account with a minimum of 3 key holders.
100% of these HBDs would be deposited in HBD Savings to obtain an APR.
At the current rate of 15% for HBD Savings and assuming 500K$ in funding, this would yield approx 6250 HBD/month.
This yield would be transferred periodically (monthly, for example) to a separate, ''more flexible'' account.
3) ''Secondary'' use of funds
Until now we have a multisig Hive account which holds 500K in HBD Savings sending it's monthly APR to a secondary account. This second account will act as the ''main account'' for the operational funds of the fund.
Now we wait until the next bear market only in HBD and/or other stablecoins.
(Yes, I am assuming the ‘’no participation‘’ in this bull market for this proposal).
What would you buy?
Probably Bitcoin only (At least now on paper).
Taking as a reference the next Bitcoin halving in spring 2028, 6 months before seems to me an appropriate time to start accumulating Bitcoin. So we are talking around October 2027. Almost ~3 years.
In 3 years with 500K HBD at 15% (this is another if). The 'Secondary' account would have at it's disposal ~225K$ in stablecoins ready to start DCA'ing Bitcoin.
Let's assume we buy at a decent point and later Bitcoin does a x3-x5. We now have 600K$-1M$ and several options ahead.
- Return the initial investment of 500K HBD to the DHF and continue with the fund's own money. Repeat the whole process.
- Move most/all the profit to HBD and stake it on the multisig wallet. Repeat.
- Set up recurring buys of HIVE/HBD to create a stable price floor.
Benefits
Just to name a few:
More market cap for HBD.
'Soft-Peg' backing of HIVE with BTC and potentially other assets later.
(When ready) Volume for VSC. The Hive Hedge Fund could be a major kickstarter on VSC adoption as one of the first 'whales' on Hive L2 ecosystem.
If this becomes well managed and executed, it's a great marketing story and selling point for Hive -> Which leads to more users and more activity.
Security of Funds
A key aspect for the viability of this scheme is the security of the funds in the initial receiving account (the account that directly receives the money from the DHF).
That is why I believe that this account should not only be multisig, but my idea is that it should require the signature of ALL key holders for any kind of operation.
Not 2 of 3. ALL THREE.
This basically means that if only one of the keyholders goes rogue, virtually all the funds would become innacessible and virtually burnt.
It may seem drastic perhaps, but I think it's a risk that must be taken if we want to ensure the viability of this.
I still have to think better about the management of the secondary account, at first won't be a problem but as the project grows, some limitations will have to be imposed there aswell. (This is a problem for tomorrow though).
I've been talking privately with @silverstackeruk from SPI, @raymondspeaks from BRO, and other people from the HIVE community which I trust and consider friends like @trumpman and @resiliencia as hipothetical 'good candidates'.
Nothing is set in stone. Still many things to decide.
Accountability
For a project of this magnitude, I believe that a fluid communication between the keyholders and the rest of the community is necessary. The following from my side would be the absolute minimum:
- A yearly Roadmap.
- A monthly Report.
- A public Live Portfolio for everyone to check how is the fund doing.
- Fully doxxed wallets.
Keyholder Incentives (?)
This is another controversial point.
Ideally keyholders are invested in HIVE and this is their only incentive. But the truth is the management of this scheme requires a very high degree of responsibility and commitment, so there should be an incentive for keyholders to do it's work diligently.
My initial idea was to take 10% of the profits as commission (excluding HBD APR of course).
It's better understood with an example:
Let's say the fund manages to buy 200K$ of BTC at or near the bottom and it's being sold later for a x3 profit.
The 10% fee would be applied to it's 400K$ profit on this BTC operation. So 40K$ of those 400K$ would be shared between 3 keyholders (so 3,33% each).
Another hipothetical option to take yearly a flat fee based on fund size/profits, but honestly I don't like it.
This definitely needs to be refined (that's the point for this post).
Feedback Wanted
In my humble opinion a part of DHF money should be used for profit ventures with the aim of everyone's profit.
Would you like to see something like that here on Hive? I personally do.
Any opinion is more than welcome. Please, don't hesitate to share ur voice.
-empo.