The Tokenomics of Hive, How it Concerns You

If you're reading this, you most probably do not need me to tell you that the Hive blockchain is a fork of the Steem blockchain. The fork became necessary following the controversy that arose from the purchase of Steemit Inc, the company that is credited for creating Steem, by Justin Sun. Since the story is now all over the internet, this writer thinks it a waste of time to appraise the matter again.

As the topic of this essay suggests, this article will focus on the Hive economics and suggest the way forward. But to begin that conversation is to examine how Hive came into existence, how it got its value. And the answer is quite straightforward, Hive was airdropped in the ratio of 1:1 to everyone who previously held Steem. This means that the whole tokenomics of Hive largely hangs on a airdrop.

The implication is that unlike most other cryptos in the market, Hive does not have an entry price mark in which the beneficiaries of the airdrop will be greatly unwilling to sell. That is, even at 5 cents, Hive might be worth selling for those who got airdrops running into hundreds of thousands of coins.

Recently, the stark realities of the words above confronted the Hive community. We had what seemed like a coordinated, massive sell off that saw the price slumping. In the coming days, more of those sell offs might be seen. This is because the methodology used in airdropping Hive unintentionally put a large chunk of it in the hands of the enemies of Hive who will continue to sell until their stake is exhausted. Many believe that Steemit Inc has a hand in the sharp decline seen in the price of Hive.

The other part of the economics of Hive is in its demand. For now, according to the record on Coinmarket.com, the demand for Hive, which can be seen in the trade volume, is relatively low. The major thing that probably accounts for this figure is that most of those who could have massively bought Hive had already received it during the airdrop.

So, we now have a narrow market that only serves a few who either missed out completely from the airdrop or are just trying to grow their Hive Power. We may continue to see this narrow market until Hive is listed on other prominent exchanges or by luck is caught in a bull run that turns dust into gold.

I would conclude by saying that, although the stakeholders of Hive are doing everything possible to improve the price action, more needs to be done in the area of securing new listings, temporarily extending the power down window to reduce sell pressure and stabilize price, and improving on the areas of marketing - this will bring Hive before the eyes of the global world and put some positive vibes in the Hive tokenomics.