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How to maximise the value of content on Hive via layer-2

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Direct from the desk of Dane Williams.


A look at why content on Hive has value and how to maximise that value on Hive’s layer-2 like LeoFinance (LEO).

Yes, content on Hive has value…

The thing is however, we’re looking at what makes content valuable the wrong way.

As such, completely wasting its potential to generate value for the communities who put the work into publishing it in the process!

In this post, I go over the extremely important role content plays in ensuring Hive’s governance remains decentralised, talk about Hive’s failure to fully maximise its value and share my opinion on what needs to happen next.

Let’s dive right in.

What gives the HIVE token value?

The value of HIVE comes from the fact it allows you the ability to transact and influence governance on a truly censorship-resistant network.

The HIVE token will always have value as long as HP gives you the ability to operate on this immutable network.

As such, the key to the network is to spread out the HIVE token as far and wide in order to avoid the type of governance attack we saw happen on Steem.

Something the Hive network has and continues to do very well with its zero pre-mine HIVE token! :)

How?

By paying anyone and everyone for creating content.

I’m sure you’ve looked at the absolute horse shit that gets upvoted on Hive and thought what the hell?

That a system that continues to reward old mate’s crappy insect photos or Mum’s gross looking pics of her cooking must be broken.

But nope.

In fact, it’s an extremely effective system working perfectly as intended!

When it comes to the HIVE token, content is merely a tool to distribute the token to as many people as the blockchain can.

HIVE inflation goes to a reward pool and there it is split between authors and curators depending on their stake.

The content itself?

Well to the blockchain, it has absolutely zero bearing on the job of distribution and therefore it has no bearing on the value of the token.

The 7 day reward pool incentivises repetitive spam by design.

But if you think that sounds like a waste of perfectly good content, of which in amongst the garbage there is actually a shitload of on Hive, then yes.

You would be correct lol.

But before explaining why this doesn’t have to be the case, we need to understand Hive’s layer-2 and the different role their community tokens play.

What gives Hive's layer-2 tokens value (like LEO)?

Unlike HIVE, the value of Hive’s layer-2 tokens does NOT come from giving users the ability to transact on a decentralised network.

At their most basic, the value of Hive’s layer-2 tokens comes from the ability to influence how content is displayed in a niche community.

Unfortunately due the relatively small size of every Hive community, this isn’t enough to generate the demand required to even come close to achieving an equilibrium point between reward-pool emissions and buyers adding to their stack for influence.

As such, every single Hive layer-2 token is either at, or currently on their way to zero.

It sucks to say, but that’s just where we’re at.

But it doesn’t have to be this way!

Every community owner has the ability to monetise the content they’re choosing to display from the underlying Hive blockchain.

The blockchain itself may waste the content by focusing purely on distribution of HIVE, but that doesn’t mean the front-ends have to do the same.

An example of using content to give a Hive layer-2 token value would be placing ads on a community’s front-end and using that ad revenue to buy back and burn their own token.

With the relatively tiny market caps, it wouldn’t take too much of a traffic boost to be earning enough ad revenue to reach an equilibrium point between token emissions and sellers.

Essentially putting a price floor under the token, halting the slide and maximising value in the token that continues to be distributed to that community!

The thing is, not one single community has actually tried to monetise their content and taken this path

Why?

Final thoughts on maximising the value of content on Hive

In short, the answer is simply because no front-end has taken the initiative by monetising the content they’re pulling from the Hive blockchain to display and buying/burning their layer-2 token.

We’re just stuck in the wrong mindset when it comes to tokenised communities.

But it just needs one community leader or token creator to take the initiative and monetise content pulled from the Hive blockchain.

To generate revenue via the content their community provides and then pump it back into the community via those with stake.

For things to change, my opinion is we just need to see one community implement ad revenue buybacks and publish stats on how much ad revenue their front-end generates for x number of monthly page views.

From there, a path to sustainability (by burning more than inflation is rewarding authors) can be mapped and every community, including some new ones, will have a clear path to sustainability.

By maximising the value of content on Hive via layer-2, the age of tokenised communities will truly begin.

LeoFinance are leading the charge, saying they're on top of it and that the ad revenue they're collecting will eventually be used in this manner for the LEO token.

So layer-2 front-end owners and teams, I now hand thighs over to you.

The future value of content on Hive sits firmly within your hands.

Best of probabilities to you.

Posted Using LeoFinance Beta