Breaking Hive News: BlockTrades Votes the Return Proposal!
edicted (82)in LeoFinance • yesterday (edited)
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Wow that’s a big move from our biggest whale…
So I randomly stumbled into the Hive discord a couple hours ago and noticed there was a discussion going on…

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Well that’s one way to do it!
There was a lot of interesting conversation to be had here. Seeing everything get defunded except for Ecency is quite the shock indeed! Unsure how much we can read into that but the Swarm is a buzzin’ on this one.

One big thing to consider here is that Hive is clearly a lot more centralized than a few of the evangelists around here like to admit. Of course this has always been the case, but it’s moments like this where the harsh reality of the situation sets in and becomes undeniable rather than lurking the background where everyone can ignore it. One account being able to single-handedly fund proposals is not exactly a place we want to be in… of course ironically this exact problem has been solved when that account votes the return… but then again makes it pretty much impossible for anything to get funded without a greenlight, so now we have the reverse problem.

Somewhat reminds me of the 2020 hostile takeover.
Because one of the big problems with the DHF is that it controls the ninjamine… which should have been destroyed but instead is now controlled by a couple of key accounts. Remind me again what we did to users that voted both real witnesses and sock puppets during the hostile takeover? We forked all that Korean stake to @null because it was seen as an attack on our consensus and trying to exploit political gain during a crisis… of course on a mathematical level this is not true at all. Voting both sides is the same as voting neither side on a pure numbers basis. Interpret that how you will.

Some users are now trying to claim that huge accounts like Blocktrades should perhaps abstain from voting in the DHF entirely and actually let the community decide what does and does not get funded. Personally I think this is a slippery slope to be on. At what point does an account not have the right to exercise their stake because they “own too much”? That doesn’t really make logical sense (especially with alt accounts in play). On a very real level too many users have been selling too much of their Hive (or not buying enough) which is why we are in this situation to begin with.

I can’t say I’m terribly upset with the current outcome we find ourselves faced with. I will say that it’s a little weird that no statement has been made, but many are saying the vote itself is the statement and doesn’t require further clarification. Not sure people on Hive are going to be sated by that logic. We are a highly political network after all.

Hm… what else?
Where is Hive’s money? All of Hive’s value (including HBD) is contained on razor-thin trading books. Today Hive is worth 33 cents a token. That number goes up or down with high volatility. With this in mind it should be obvious that the ninjamine is not “for development”. The ninjamine can only steal from users that acquired their tokens fairly and redistribute it to funded proposals (many of which have proven to be ineffective). In this regard it is nice to see everything get defunded… because I honestly have no idea how much money the DHF is allocated if we take away the premine that shouldn’t exist in the first place.

The only way to realize the value of those counterfeit tokens is to dump them on the market, and once that happens price goes down and nobody can get that value for their stake. Currently this is the only problem I see with the current state of the DHF: many people on Hive like to pretend we don’t have a premine. It’s right there in the DHF. Stop pretending and make a move to destroy it permanently rather than acting like it doesn’t exist. The “we don’t have a foundation or a premine” narrative is not one we are making in good faith. We’ve swept the truth under a rug and pretend it’s not there.

There’s also a certain corporate/government vibe to the DHF that we see in legacy finance. It is this false reality that we need to spend the money in the DHF or we somehow lose it. The fact of the matter is that money from the DHF should only be spent if and only if the value being created is higher than the cost. This toxic attitude that we have to spend the surplus or lose it (like a government agency) is enraging the few times I’ve seen the concept floated.

Will number go up?
Potentially this move stops thousands of dollars of Hive from getting dumped on the market every day that it continues. I am thinking about buying here because I was going to buy anyway… but I think I’ll give it a few days first to see what happens. Let the knee-jerk reactions resolve before doing anything hasty in either direction.

Conclusion
I took my sweet time getting this “breaking news” out there so I better just kill it here and hit the publish button. My current feeling over this situation is that it’s some low-risk drama that somewhat highlights a few of the weaknesses that have been ignored up until now (while simultaneously fixing a lot of the DHF-wastes-money debate). It calls into question the value of a lot of these proposals. I imagine the drama has just begun so get ready to wade through it! This is a big move and should be respected as such. I’ll likely have more to say on this topic once some of these events have matriculated.

#dhf#blocktrades#dao#proposals#hive-fund
yesterday in LeoFinance by edicted (82)$38.41
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[-]andablackwidow (68) yesterday
Ouch, couple of topics here.

First, the issue with ninjamine was that it could be (and ultimately was) used for governance. Now that it is in DHF, the funds can actually be used the way the community thought they should be used (they are mostly not used that way currently, but that is separate issue).

DHF currently still has over 37M HIVE from ninjamine. It converts that HIVE to HBD at a rate of HIVE_PROPOSAL_CONVERSION_RATE (5 basis points) per day, which means ~18800 HIVE (about 6000 HBD extra). Example block containing such dhf_conversion_operation.
Compared to funding it receives from inflation, that is significant amount. DHF receives database_api::get_dynamic_global_properties().proposal_fund_percent, which is HIVE_PROPOSAL_FUND_PERCENT_HF21 (10 percent) of inflation. It receives new funds every block, but since payouts are once per hour, the new funds are recorded once per hour as well, indicated by dhf_funding_operation. Currently it amounts to around 3000 HBD per day. It means ninjamine conversions are responsible for 2/3 of new funds in DHF.
Total potential payout output does not depend on new funds though, that would be true if fund was dry. It depends on current amount of HBD on balance, which is over 23M at the moment. Daily output limit is 1 percent of that (I just noticed a small problem – the value is not defined where it should, that is, in config.hpp, but in some local constant dhf_processor::total_amount_divider). Cut that by 24 and get actual hourly payout limit. New funds are responsible for completely insignificant portion of potential payout. Return proposal, even in normal situation, has more impact on future size of pool than new funds, inflation or ninjamine.

Voting for proposals has some inertia. Voters would need to use bots to constantly monitor votes of others and adjust their vote based on what proposals they vote for went below return proposal (and then such bots would end up constantly adjusting votes spamming the network :o) ). Three top voters for return proposal could drop their vote to counter most of influence of blocktrades. Complete counter would require more vote changes, true, but it is not like it couldn’t be done. Of course, I don’t even know why such move was made, maybe whales are in agreement there.

Finally there is also the issue of how DHF funding affects funded projects. The way it currently works is only suitable for infrastructure – when it fails to get the funding, you can just stop renting the server and some Hive API nodes disappear from the network. Once funding is back it only requires at most couple days to set it up again. But there are projects that need one time all-or-nothing funding (f.e. some promotional event or a simple app/bot script). The thing that should be the main focus of DHF – development – requires continuous and secure funding, especially for bigger projects with multiple people involved. Even if you have a team that is also doing other work, switching people between projects generates a lot of friction. Also you might end up having a lot of work wasted, because it is really hard to pick up development of the feature that was only partially implemented, even for the same developer, after some time passed (and partially implemented feature might even have negative value for Hive, because it might make it harder to do other changes).
Allowing downvotes for proposals seems like a good start, but much more comprehensive changes are needed. I don’t have any good ideas though :o)

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[-]edicted (82) yesterday (edited)
Thanks for this comprehensive analysis.
I really appreciate it.
I would not have guessed the ninjamine was only an x3 for the DHF.

You only made one assumption I disagree with:

Now that it is in DHF, the funds can actually be used the way the community thought they should be used.

Again, this is not accurate. There is no money; there is only dumping on the liquidity pools, which dilutes the value of everyone’s money. These are just coins printed out of thin air that should not exist. If we wanted the DHF to have x3 the funding then we should just give the DHF x3 the funding… but we don’t want that so we shouldn’t.

When Ned promised everyone “don’t worry the coins are for development” that was a farce. He premined the token because he wanted all the power for himself. We can not magic up money out of nowhere. And now we as a network are continuing the farce and acting as though “no really the money is really for development!”. Yes well if we want to print more tokens out of thin air we should just do that in real time rather than pretending like the 80M lump-sum ninjamine was a good idea.

$0.29
5 votes
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[-]bozz (80) yesterday
I think this is a really good thing. If you look at some of the proposals, they aren’t too far off from making it above the return even with the Blocktrades vote. This might force them to rethink their current proposal and adjust it to get the support they need. Either that or redouble their efforts looking for votes. I think this is also a good way for them to consider who they support. If they support users who are dumping their rewards every chance they get (I’m looking at you valueplan), then that is wasted stake that could push them above the threshold.

$1.85
14 votes
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[-]azircon (76) yesterday
absolutely!

Let the projects lobby for support from individuals. Most of the projects don’t even know 95% of the individuals, and 95% of the individuals do not know the projects.

$0.94
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[-]bozz (80) yesterday
It would be interesting to see how many accounts with large enough stake to move the needle are not voting on an proposals. When you are talking 62 million, being a couple million short doesn’t seem like too much unless you figure 80% of the chain only holds 10,000 or less shares right? I just made up those numbers to try and make a point.

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[-]azircon (76) yesterday
In my mind, things will self adjust with time. Projects that can convince more people to vote will get funded, those that can’t, won’t get funded. It’s rather simple.

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[-]bozz (80) yesterday
I guess we will see, unless BT decides to suddenly change course.

$0.001 vote
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[-]valued-customer (73) yesterday
Something to consider is that my account holds considerably less than 10k staked Hive ( 15 000 / 87 000 000 = 0.0001724… <====

… 0.0172%

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[-]toofasteddie (76) 10 hours ago
I'm playing both sides

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[-]alokkumar121 (81) yesterday
I imagine the drama has just begun so get ready to wade through it

Many projects will be affected with this so let's see how it goes and surely some drama is expected.

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[-]chinito (70) yesterday
whoa! That IS some big news! I hope everything pans out good for hive.. 😉😎👊

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[-]fredaig (67) yesterday
Well the lord has spoken!!

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[-]ijatz (63) 22 hours ago
Thanks a lot, @edicted, for shedding a light on how the DHF works and its usual impact on the $HIVE price. That's something I was completely unaware of 😅.

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[-]bombus (61) 17 hours ago (edited)
If decentralization means putting in a little and taking a lot then there is a problem of meaning. In this way it is obvious that there is cannibalization of value. It's like politicians who only thinks about their own pockets instead of the common good. On Hive I have bought much more than I have sold, so I support any DHF expense that generates value, otherwise I don't like anything that costs a lot but is useless for growth. This should be a strong ideal for everyone here

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[-]hatdogsensei (67) 12 hours ago
This is a very big news that can affect the status of Hive in the next days

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[-]dreamtales (54) 11 hours ago
So what motivated @blocktrades to vote the return proposal? Curious to know his detailed side of the story as to why.

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[-]tobetada (76) 7 hours ago
Blocktrades unvotes the return proposal again… maybe he just likes the drama?

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[-]pizzabot (58) 2 hours ago
PIZZA!
$PIZZA slices delivered:
(1/10) @danzocal tipped @edicted

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[-]jackjackson2nd (47) 2 hours ago
ecency getting funded is good, also i think all good ideas deserve a chance but on the other hand manipulation needs to b prevented as well- so things needs to b carefully balanced. "problems with the DHF is that it controls the ninjamine… which should have been destroyed but instead is now controlled by a couple of key accounts" wanna read more about that, "Hive is clearly a lot more centralized than a few of the evangelists around here like to admit" i'm not aware of any other platform & coin that's completely decentralized but i hope n general & for hive more specifically that situation improves gradually overtime & hopefully more adoption specially with "EVM compatible hive". have a great day

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[-]danzocal (60) 2 hours ago
!PIZZA

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