The Tremendous Upside Of Hive
It is sometimes hard to remember how early in the process we really are. When we look at the cryptocurrency market compared to the rest of the financial world, it is mind-blowing how much room there is for growth.
Cryptocurrency talks in millions, or perhaps billions, while the rest of the financial realm is into the trillions. When we look at the potential of tokenization, we see enormous upside.
A blockchain like Hive has tremendous upside. When something can be layered, we see how much growth can take place. It is here where exponential moves can occur. The entire crypto space is littered with possibilities along these lines.
One of the reason why we can see the potential of Hive is because we have a number of areas covered at the base layer. Even though Hive is rather focused in what it can do at that level (no smart contracts), there are some powerful tools built in.
We will look at each area and see how much potential truly exists.
Decentralized Finance (DeFi)
Decentralized Finance is going to overtake everything. To me, this is an unavoidable outcome. When we look at the tokenization process, we are going to see it interwoven through most everything online. This means that most websites or applications are going to have it built in.
How much does that total when we project forward a decade or so?
To grasp how large this can become, we simply look at this chart. Even though DeFi exploded the last couple years, with Total Value Locked (TVL) going through the roof, we see it is a drop in the proverbial bucket.
If DeFi were a bank, it would rank 31st in the world. Looking at this list, we can see tens of trillions in value in these banks. This does not include companies such as Blackrock or Fidelity who both have many trillions in assets under management.
DeFi totals a couple hundred million dollars.
As for Hive, we are talking about a few million dollars. The HBD that is in savings is a rounding error in these discussions. It is, perhaps, $3 million. Here we see the growth potential. Many feel that hundreds of millions being on-chain is impossible. These numbers suggest otherwise.
We discussed the idea of time locked accounts as a part of Hive Bonds. The main idea is to have differing layers of return in exchange for commitment via lock up periods. Obviously, if one wants a higher rate, simply opt for a longer term vault.
Stablecoin Expansion
We know that stablecoins are getting a lot of attention. The Collapse of UST really put people on high alert.
Nevertheless, stablecoins are a legitimate part of the future of cryptocurrency. We are going to need mediums of exchange and these serve that purpose.
Here we have a chart measuring the M1 money supplies of different countries with the total stablecoins outstanding. While not fully accurate because M1 isn't solely cash deposits, it is overstated. However, we get an idea of the potential.
We see that the total stablecoin issuance, as of this chart's creation, was $170 billion. There are tens of trillions in M1 money out there. Again, we see a lot of room for growth.
Many talk about sustainability of the Hive Backed Dollar (HBD) and its interest rate. This chart alone depicts how much room this is for growth overall.
As for HBD itself, we see this from Hiveblocks:
Basically, if Hive is going to do its part in the stablecoin markets, we are going to need a lot more HBD. This will be the foundation for not only payment systems but also derivatives, collateralization, and investing.
The construction of these areas will drive value to HBD. However, due to the way things are structured, it will also provide a great deal of value to HIVE. Essentially, we are able to create a positive feedback loop.
Decentralized Autonomous Organization (DAO)
DAOs are just starting to get some attention. This is another area of cryptocurrency that will see major innovation over the next decade.
For now, we see most of the DAOs that are in operation tied to the native tokens. Fortunately, Hive has the Decentralized Hive Fund. At this moment, there is over $50 million in the wallet.
This is designed to fund proposals that seek to develop projects that are beneficial to the Hive ecosystem. It is our own builder's pool if you will.
There is starting to be a lot of money accumulated in this area. As we can see from the following chart, it is now into the billions of dollars.
We have a powerful mechanism on our hands. The DHF pays out 1% of the total per day. Due to the work of the HBD Stabilizer we actually see the number of coins in the DHF increasing. Even without that, the value of the fund, in USD, can increase as HIVE moves up.
It is likely that we will be able to fund a great many more projects in the future. This will help to create another feedback loop, whereby developers can propose to get funded, helping to create more use cases on Hive. Like was mentioned earlier, this all helps to push value into the native layer coins.
The Tremendous Upside Of Hive
When we break things down into their core components, we see the potential that exists. Notice we did not discuss social media or anything to do with blogging. Instead, we are simply focusing upon the base layer offerings that are tied to potentially larger moves within the industry.
A lot of the future construction will take place on the second layer. This is one of the benefits to keeping the coding at the base level tight. For this reason, we see the scaling consistently moving higher.
If the overall industry is going to reach levels that mirror what the existing financial system is doing, then we have to see a lot of growth in general. With what is already at the base of Hive, we can easily see this being a part of the transformation that will take place over the next decade.
As long as the building continues, the future is bright for Hive.
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