TOKENS
Goals with mining:
- No geographic restrictions
- No patents (open and fair access to all)
- Contribute valuable resources to the network (not wasteful)
- Anyone, regardless of background, can participate on any scale.
- The more that participate in mining, the more decentralized it gets.
- Punish attackers while rewarding the honest network participants simultaneously.
Now that the Hive Video IPFS Desktop dApp is out and we finish the last touches on it, the main focus now switched to the Speak Incentive Layer.
We wanted to start putting my thoughts out there for feedback, as this will be a community effort.
Why a 3 Token System?
We didn't combine the governance token with the resource token because of a few reasons. When you combine a gas/RC token with a governance token, it needs to have inflation. You can't (or rather very difficult/inefficient) have a capped gas token, as you don't want the value to skyrocket, and you want it widely spread so users can use the platform.
We want to know exactly how much of the network governance we own without ever being diluted. So we separated the gas token from the governance token.
Hive got it right when resource credits, it is "free" to use the network, or at least it feels free because you got the RCs for free by staking your HIVE. We wanted the uploads to feel free, so BROCA is in the spirit of RCs. I think BROCA can be fungible; as RCs deal in text, BROCA deals in images and videos, which deal in more data; therefore, BROCA can be fungible and used to pay miners. If anything, we want BROCA to be a low, stable price.
The reason for Miner tokens is a few things. LARYNX miners will be open and equal to all who wish to buy them. Unlike with PoW mining, for instance, ASIC's, a company can create a revolunatry chip, patent it, and refuse to sell it to you. Specialized, patented miners create a centralized mining environment. Having digital miners sold in a decentralized way prevents this attack vector.
Having digital miners gets away from the electricity centralization. Cheap electricity for some, expensive for others makes unfair mining experiment where people are at a disadvantage based on where they live, or governments can subsidize cheap electricity. Hard drive space is the most commonly used, cheapest to acquire within no way can be specialized and patented and cornering the market the same way Asics can.
LARYNX Miner is mining SPEAK, a capped governance token. Without the MINER token, anyone can mine the network; this leaves it vulnerable to a money attack—someone coming in with mass resources and trying to nearly 51% attack the network.
With Bitcoin, you need to buy hardware, so there is a cost to attacking the network, as you purchase Asics in bulk to mine crypto. The SPEAK miners have a fixed investment in LARYNX Miners; the only thing you can do with these miners is to provide resources to the SPEAK network. You can't repurpose the miners for anything else.
Once you made that investment in LARYNX Miners, you're going to stake those miners and keep providing resources to the network as long as it is monetarily beneficial. Even then, people might still mine since you already sunk the money in the miners and hard drive space and bandwidth are so readily available. So the setup is amazing because the LARYNX miners are providing resources to the network, and they have an incentive to keep mining whether the price goes up or the price goes down.
However, the Speak Network deals with harddrive and bandwidth, two things readily available on web 2 used by various other things. Meaning, a centralized Youtube, for example, can point their exact resources at the network without having to "buy-in" - the Miner Tokens prevent this type of money attack to a large extent.
That is why distribution is essential. To try and 51% attack the network to gain an edge on gaining governance tokens, you'll also need to buy a ton of LARYNX miner tokens, which enriches the Hive community and will not be an easy thing to do, as the more you buy, the higher the price goes. So it is a defense on the governance.
Having Miner Tokens only be purchased by the asset it mines creates a continuous demand for SIP purchases, thereby creates an ever-growing fund backing the project. This is the definition of a value feedback loop.
Give out free miners to mine Speak. When you stake a Miner token, they can never be unstaked, essentially burned, but you retain your mining power on that account for life.
Every year a better miner comes out that can only be purchased with Hive. Since some Hive is sold for Speak, and Speak is capped. Every purchase, therefore, makes Speak more scarce—supply & demand. More demand for a deflationary asset like Speak increases demand to mine it, which means people need to buy more Hive to mine Speak. Increased demand for miners raises miner token prices. Rising miner prices mean miners sell Speak for higher prices (in a healthy environment) - by design; when there is demand, the network fully captures and harnesses to the fullest extent. Things like this are not possible on one token system.
Giving free miners to Hive holders offers a fair token distribution, and SPEAK only reaches the open market if it has been minded by providing resources to the network. Every SPEAK in circulation only exists because it improved the network's infrastructure, which is very cool when you think about it. We believe Hive is one of the fairest, broadly & diversely distributed assets on earth.
The power of tokenmics; the miner purchases create a bullish sink for all of Hive. Future LARYNX Miners will suck up a lot of SPEAK/HIVE/BROCA. A game theory in tokenomics that ensures the governance token remains scarce is capped and continually locked up while also helping add value to the Hive community.
Multiple token systems will be a thing. People will get used to them, and communities that build them right will do amazing things. You can't lump everything into one token. Hive has RC's, a separate token (virtually), except you can't trade them.
Having a capped governance token alongside an inflationary gas token allows the governance token to grow in value as the network grows while allowing users as close to a "free" feel as possible using the gas token.
Creating multiple tokens with smart parameters can create a token system that drives scarcity while spontaneously adding security while not affecting user experience.
In theory, the idea is with a high SPEAK token price, the more Hive can be taken and locked from the market forever. Eventually, when there is demand, Speak is scarce, and there is an ever-increasing demand for miner tokens, the SIP will be overflowing and can even help fund HIVE witnesses.
Think of a scenario where there is 100's of millions of USD value (common for DEFI today) equivalent locked in tokens in the SIP generated 5-10% interest a year. Potentially millions in funding dished out for infrastructure cost. The community can vote to take SIP funds to fund the Hive witnesses, thus lowering or even capping Hive's inflation altogether.
The SIP idea is not just to SPEAK, but for HIVE, and if the game theory plays out correctly, the fees generated from the SIP could pay for Hives infrastructure in a non-inflation way.