Hive: Hundreds Of Millions Of Dollars In Development Funding And How It Works
Hive is being established in a way that offers the possibility of being one of the top blockchains. Much of what hindered the progress with Steem is being eliminated.
In this article, I decided to cover something that is little talked about. In fact, most people are not even aware that it exists yet it has the ability to propel Hive to great heights.
Were you aware that Hive has, potentially, hundreds of millions of dollars available to pay for development? This is something that does not have to come out of the pockets of any group of individuals. It is written into the code enabling the ecosystem to keep funding itself.
How is this possible?
The answer is that it was available on Steem. However, due to the albatross that was present there, things were hindered. On Hive, this is not the case.
The Steem Proposal System was to be a way to fund development on Steem. The challenge was the funding. Hive took care of this by setting up this account.
Notice the HBD balance: there is 445K which is worth 71 cents apiece. This adds up to roughly $315,000.
For those who remember the Steem Proposal System, all payouts were in the form of SBD. The same holds true on Hive. All this money is to fund the Decentralized Hive Fund. This is where the individuals are able to submit proposals to get funding.
https://peakd.com/me/proposals
Two things we can see here. The 445K HBD is the same on both images. Also, at present, there are 4457 HBD allocated daily to fund development.
Of course, there is a huge difference between $315K and millions of dollars. How is that gap closed?
Let us go back to the wallet of the DAO account.
In this, we can see there is 83 million HIVE tokens. At present, this is worth $20 million. A nice run up in the price of HIVE to, say $3, would mean there is close to $250 million available for development on Hive.
In my opinion, this is the secret weapon that Hive has. There are going to be hundreds of millions of dollar available, over time, to fund development and other necessary activities on Hive. This will help Hive to be a self-funding mechanism.
To start, many are probably wondering where all this came from. Remember the Ninja-mined stake of Steemit Inc that caused so much controversy? This is the mirror image of it on Hive along with some other tokens that were not dropped.
There is, of course, a major difference fwith Steem and where understanding how it works if vital.
Unlike the Steemit Inc stake, nobody (or everybody) owns the Steem.dao stake. In fact, there are no keys to it. There is no individual or committee making decisions.
So how does it work?
The HIVE is converted to HBD slowly over time, like water dripping. This is to prevent the inflation rate from going through the roof and the market being flooded with tokens. All proposals on the DAO are paid out in HBD, thus providing a consistent stream of funding. This is coded in meaning it requires a fork to change it.
As a side note, this also explains why there might be a fork to give HIVE to some Steemians who were overlooked.
Obviously, the goal over time is to make Hive more valuable, in turn, pushing the value of the token up. As this is accomplished, we see value of the account, in USD increase. This will obviously enable more funding to take place.
In effect, it becomes a cycle that builds upon itself. The greater the value of HIVE, the more development we can fund. As development increased, it should help to further increase the value of the token.
Rinse and repeat.
Ultimately, this was the intention of the original stake on Steem. Unfortunately, due to the events that took place on there, it never came to pass.
Here we see one of the biggest advantages of getting a fresh start. Hive does have the ability to fund itself on the development (and marketing) front. It is a system that is designed to keep feeding itself as the entire ecosystem grows.
It is very important to understand how all this works. In my view, this is one of those things that adds a great deal of value to the ecosystem, yet generally goes unnoticed.
The ability to fund ourselves is crucial and the money we are talking about could be enormous.
If you found this article informative, please give an upvote and rehive.
Posted via Steemleo
