Greetings #Hivers,
this post is an important one. It's about how I envision the future of Hive; as a developer & stakeholder. And most importantly, how I would re-design the rewards system to introduce staking rewards on Hive.
If you're only interested in my staking rewards proposal, you'll find it at the bottom of the post, under chapter V (roman 5).
However, I encourage you to read the post from the start, so you fully understand where I'm coming from and what my thought process is.
0 - The Beginning
Let me quickly start from the beginning:
In my 3 years on Steem, the project has ever only been a niche project.
While Steem had THE first-mover advantage (fast & scalable blockchain), it didn't even scratch the surface of its potential.
This had multiple reasons (some are very obvious that I don't need to name), but one of the major ones was IMO that the features advertised were NOT in-line with how the blockchain was used.
Instead of only users trying to adapt to the blockchain, the blockchain should adapt/be modified (over time) to the users. After all, it's just software and not something static.
I - Author/Curation Rewards aren't working on scale
One of the major problems Steem had, was vote-selling/self-voting, where it was economical more lucrative to do that, instead of voting honestly on other people's content.
This problem was ultimately softened with the introduction of "semi-free" downvotes/higher curation rewards, where the negative consequences would be harsh enough to prevent that type of bad behavior.
However, while vote-selling has vanished, there is still the problem of auto-voting/trail-voting. This means, the software is automatically voting on certain posts/following other voters, as this is the easiest/most-efficient way to earn curation rewards. Sadly, this behavior screws the algorithm where only a handful of users have most of the rewards and eye-balls (high rewards => trending)
While the idea of incentivizing manual & honest curation via rewards was and is still a great idea; in practice, based on years of experience, I'm quite certain that it won't work, at least not if Hive wants to get out of the shadows; something that Steem never achieved.
And personally, this is a major criterium why I'm putting my time into this project. The layer 0 (community) of Hive is so strong, that we should easily be inside the TOP 20 cryptocurrencies.
II - Top 20? How do we get there?
Before you might misunderstand me: this is not about market-cap, but rather about Hive becoming a blockchain that identifies problems and provides a solution.
Because, right now, the current version of Hive is solving too few problems, and unless something changes, new tech will replace it.
Now, in order to work on solutions, we first have to ask the right questions:
For example:
- Why should developers integrate/build on Hive
- Why should individuals buy HIVE and potentially even hodl it?
Answering these points is crucial IMO and isn't done with answers from 2016; the year where the whitepaper of Steem was released and most of the design aspects of it got released.
Between 2016 and 2020 a lot has changed; most importantly the use-case for Steem shifted from a 100% social application-driven blockchain, to a community-driven blockchain, that is supposed to fulfill everything that people want to throw at it.
And to be very clear: HMTs will not solve any problems unless Hive is able to provide solutions on its own.
III - Why should developers integrate/build on Hive
Smart contracts? No. There are already more than enough blockchains focusing on that problem, which creates other problems such as scalability & security issues.
As a developer, the reason I would want to use Hive is in order to leverage it as an easy form of storing & retrieving data.
Let's take Splinterlands as an example, by far the most successful dapp on Hive-tech (still on Steem chain).
While the game is running mostly off-chain (making it very efficient & cost-effective), the cards and everything else is being kept on-chain, via JSON objects, text in a specific format. For that, the custom_json operation is leveraged.
If Hive is going to adapt to its use-cases, then we need to have better tooling, API & marketing for custom_json.
IV - Why should individuals buy HIVE and potentially even hodl it?
When I look at cryptocurrencies to HODL, I'm usually quite conservative.
My portfolio isn't that diverse. The newest addition I added recently was Ethereum since Ethereum 2.0 should be released in summer, which will introduce staking rewards.
Besides being a stable asset in DEFi, having also staking rewards as an incentive is quite big for me TBH. It's the same reason I still have some MCO locked. 6% APR? Why not!
With the same thought process, I also look at HIVE. I'm obviously much more involved with HIVE, which is an incentive in itself, but the staking can't be overlooked.
Problem is though: I'm far more experienced in Hive than the average user/investor, so I'm already familiar with auto-voting/ the curation game-theory. But I'm also more than aware that auto-voting is in the grey zone and not something I want to advertise since it undermines manual curation.
Which is the reason, why I believe we need a new way to incentivize staking?
V - Hive Staking Rewards
This is what I came up with when I brainstormed about how we could replace the current system. The goal was to have a system that is very clear, transparent & positivity driven and which also offers the option to give away without actually having to make a "donation".
The current rewards system could still be offered via SMTs.
Imagine the following scenario:
- You bought 100,000 HIVE (100 thousand)
- You stake the 100,000 HIVE for min. 2 weeks
- When you start the staking, you can decide on a minimum duration. It takes min. 3 days to unstacke.
- Every minute/hour (it depends what's most efficient for the blockchain) you're getting staking rewards (% APR) and RC (resource credits) credited on your account.
- Since your un-staking takes t - 2 weeks (after 11 days only 3 days), you're getting some amount of RC already credited on your account. (Info: I'm not sure if it's better to add a minimum staking at the beginning of the term or when it's unstacking time)
- You take a look at hive.blog and upvote a post. There are no rewards, just likes & dislikes.
- Because you want to support that individual anyway, you direct a max percentage cap of 0.5% of your staking rewards to him/her; with a daily-cap of 4 HIVE, a total cap of 25 HIVE and a max duration of 2 weeks. (whatever is smaller in the specific timeframe; if 4 HIVE equals 0.2%, then you still have 99.8% going to yourself/others).
- The rest of your staking goes towards your own account and the other accounts you have set.
- The staking to other accounts can be canceled at any time.
- You take a look at dlease, if there are potential buyers for your RC (resource credits). There seems to be a new app on Hive that is in dire need of RCs. You sell them part of your RCs and also accept a RC delegation to another app for a daily revenue of HIVE.
- You decide that you want to take part in governance voting & DHF voting. However, you need to have staked your HIVE for at least 4 weeks to be eligible to take part in it. So you need to wait 2 more weeks until you're able to do that.
- The reason for that is that individuals can't just buy stake (HIVE), overtake governance and then sell the stake again.
So, what do you think? I'm really serious about my statement that I don't see a thriving future for the current rewards system on Hive.
I welcome you to take apart the scenario I made and look forward to some great feedback
With this said,
Wolf
therealwolf.me