DHF Proposal: Ethereum Price Support for Hive

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This document serves as a reference for the DHF proposal that links here, going over the idea and any updates made in the future.

Creation date: 2021-02-17
Latest revision date: 2021-02-21

Proposal direct link: https://peakd.com/proposals/157

The Idea

The idea for this proposal is fairly simple: Bring value extracted from the ethereum ecosystem to the Hive ecosystem by supporting the price of the HIVE token.

The Proposal

The proposal is to fund an account with 1000 HBD per day for up to 90 days.

  • The HBD are then exchanged for ERC20 stable coins.
  • The ERC20 stable coins are staked on ethereum defi platforms (e.g. Curve, Swerve, or similar) in order to obtain a yield.
  • The yield is then used to purchase HIVE on the open market.
  • The HIVE is then burned.

In this way, the HIVE token will capture value extracted from the ethereum ecosystem.

Any code developed in support for this proposal will be open-source.

All transactions will be posted on Hive for transparency purposes.


Q: Who will have the keys?
A: I'm open to community suggestion. Off the top of my head, I would think giving the keys to @blocktrades and @yabapmatt would be sufficient.

Q: Where will you buy the HIVE?
A: On binance. There are two reasons for this.

One, it's one of the most liquid markets for HIVE and doesn't have the wallet maintenance issues like we have seen on Bittrex.

Two, more importantly, by buying HIVE and then taking that HIVE off the exchange, we will be squeezing the short sellers in Binance's HIVE futures market. Over time, this should create additional price support for HIVE as it becomes more expensive to short.

Q: How will this be decentralized?
A: This is a difficult project to decentralize since it involves multiple chains and a private platform (Binance). One Hive user suggested sharing the keys with a number of top witnesses. I'm fine with that solution and open to other suggestions.

Q: Won't this hurt the price of HBD?
A: It's possible there will be a market effect. HBD is intended to be used though. I'm not too concerned about additional supply hitting the markets. Still, if anyone wants to enter an off-market exchange of ERC20 stable coins for HBD, I'm open to that. Such an arrangement would mitigate any market effects.

Q: What do you get out of this?
A: Aside from a higher HIVE price? I'll be taking 1% of the yield as a management fee. I will not be taking any fees from the DHF HBD payouts.

Q: What happens when all this is over?
A: The staking platforms on ethereum show no signs of abating. This setup should last almost indefinitely. If, for some reason, market conditions change drastically and it's no longer worth continuing this form of price support the ERC20 stable coins will be unstaked, HIVE will be purchased on the open market, and that HIVE will be burned.