LeoGlossary: Hive Power (HP)

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How to get a Hive Account

The term given to Hive coin that is staked on the Hive blockchain.

Hive Power (HP) is what gives people access to utilize the blockchain through Resource Credits. Thus, we can consider Hive Power to be an access token for the network and to write to the database.

In addition to access, HP gives users the ability to engage in governance by electing block producers, curation activity that distributes the reward pool, and funding of proposals for the Decentralized Autonomous Organization (DAO).

HP equates to influence over on-chain activities.

By staking $HIVE, investors do earn a bit of a direct return. Instead of paying out interest, this offers an adjustment based upon the rate of inflation. To compensate HP holders for the dilution of coins, HP is provided to holders.

The rate will fluctuate based upon the liquidity of the coin versus what is staked. As more is powered up, the adjustment pool is spread out more, providing a lower return. If powering down takes place, then individuals will find the adjustment percentage will rise. Over the last couple years, this has ranged between 2.75%-3% annually.

Over the years, there was great debate within the community regarding the lock up period for those who power up $HIVE. There is a 13 week power down period meaning that one gets 1/13th of the account each week once it is initiated (for a total of 14 weeks).

Detractors say this limits the appeal of buying $HIVE since the return is diminished by the lack of flexibility. Supporters, on the other hand, cite this as a security feature. If a wallet is hacked, a power down can be initiated yet no money removed for at least a week. This should give the individual time to see the issue and take corrective action.

It is also a deterrent against the cryptocurrency exchanges from powering up and using stake against the community. This occurred when Justin Sun attacked the network. Exchanges such as Binance powered up their wallets which has customer funds in them, not realizing this was locking them up for 13 weeks.

As a result of this, when the community forked from Steem, one of the features that was written into the base layer code was a 30 day governance staking period. During this 30 day window, newly powered up HP will not affect governance issues.


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