Defensive thinking in a world of exponential growth is more than being conservative. It's being protectionist. Which would be understandable, if you were part of an organization at the top of the food chain. Not so much if the organization is trying to be recognized for its undeniable qualities and expand.
I mean, protect what? A big slice of a small pie? Wouldn't it be better to protect a not-so-big slice of a much bigger pie?
The issue is not defensive thinking per se. That has its role, and in some cases is very useful to prevent you to do stupid things.
The problem appears when defensive thinking turns into a de facto break for your potential exponential growth.
Let's take Hive, for example. Defensive thinking makes people worry about higher inflation, potentially hyperinflation in the bear market under certain unfavorable conditions.
The problem with Hive is not that it has or will have a high inflation rate, it's precisely the opposite. That there aren't enough HIVE (and especially HBD) on the market to service the needs of anyone with significant amounts of money to buy in or sell out. Liquidity is thin and not easily accessible and will continue to be this way for a good while, because there are simply no mechanisms to print orders of magnitude more HIVE or HBD, if needed (conversions are the best way, but that means HIVE is destroyed when is converted to HBD and vice versa, so either way you lose one of the tokens).
I understand that we believe a "money-bag" will come in and moon our bags at some point, because he/she sees no option but to buy HIVE. But I see that very unlikely without sufficient liquidity so that the money-bag feels safe to get in or out without pumping the price to the sky or dumping it into the ground. Or without sufficient incentive to buy and hold long-term, considering the alternatives.
Why is the price of LUNA mooning and passing ATHs, even though Terra ecosystem is far more centralized than Hive?
For a couple of reasons actually, and most of them revolve around their stable coin UST. Why do I make this comparison? Because UST is also an algorithmic stable coin pegged to the US dollar using the relationship with their main token, LUNA.
- Both LUNA and UST are listed on enough exchanges and traded on many AMMs and part of deep-liquidity pools
- As a consequence, UST has had almost 1bn trading volume tracked by coingecko in the last 24h (this includes volume on the linked AMMs to coingecko)
- UST has a market cap into the billions (16bn), but I heard they started low and grew aggressively
- there is a high APR paid for staking UST inside their ecosystem; currently at 20% but will drop to more sustainable levels now that they established themselves as a top stable coin and attracted serious capital
- and last but not least, they started to build a bitcoin fund to back the pegging of UST, when needed
How is HBD doing by comparison? Not well. The problem is not that, because UST was not long ago very small. But exponential growth in their case didn't come from small hesitant steps every now and then. They pushed it like crazy, both when it comes to marketing and development. They are one of the few chains connected to Thorchain so far. That took development effort. They are practically the only big stable coin on Cosmos. So they've gone places where regular projects haven't gone yet, besides the regular destinations.
By contrast, HIVE used to have a pool on Uniswap at some point and shortly after most everyone pulled out. The pool is probably still there, but without liquidity. Sure, maybe given the fees a pool on Ethereum wasn't the best idea. But there was a proposal to fund a pool on BSC, I believe, from DHF. It probably didn't pass, or I would have likely heard about it.
Neither Splinterlands nor Leofinance became what they are today by acting like Hive maximalists. They went out there and connected with other ecosystems. Terra succeeded the same way. Do we have a pattern here?
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I feel you...
For the good of HIVE, I'm of the opinion we need successful, forward-thinking communities like LeoFinance cycle their profits back into HIVE.
We need to influence Hive governance to encourage innovation!
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Indeed! And Leofinance, as well as Splinterlands, did a lot of good things for Hive ecosystem as a whole by spreading their wings.
Huh... I will have to pick words in my comment... lol...
Sometimes, I have a feeling that "our" biggest whale doesn't want to see HIVE mooning... Also, they are slow, more like elephants, and don't like change at all... A lot of them have no idea about existing of Hive-Engine or other blockchains out there...
So, in some weird way, your statement that LUNA is less decentralized than HIVE doesn't stand... I know what did you mean, but in a reality, some great proposals, like that for the HBD-BUSD pool have failed because of the "don't care" attitude from whales...
Anyways, the HIVE token distribution is changing as we write, and every next day, some whale is less powerful than it was a day before... :)
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Not true. I saw some stats recently. All HIVE stakeholder categories decreased by total stake except whales, which increased (I believe it was from 46% to 49%).
That's interesting! I remember the good old steemit and their stake that it was going down constantly as time was passing by... With lower inflation and curation rewards, it has no sense that whales gain more than others, but if data says so, then it's true :)
Btw... that's even worse news then... lol... HIVE sucks in decentralization big time... :(
That's the problem... protectionism in a small pond.
Since I have not invested any money in the Hive, I am full speed ahead, and damn the torpedos. I have nothing to protect and everything to gain. Thanks for your post.
Well, I have invested money in Hive, but the way I see it the way to protect it is by growing faster. And you can't grow faster if you're only focused on your small pond.
Lovely article @gadrian ,our mindset needs to be purely positive and the possiblity of any development. Major coin took unimaginable steps to improve their worth and dominance ,I believe Hive is also got the possibilities.
Of course Hive has the possibilities. It's exceptional in many ways. But if you are not ready when exponential growth happens (that means more than scaling), you get left in the dust.
I have to agree that liquidity is a huge issue. Of course, this also includes HBD, and the proposal for BUSD/HBD is still not really supported by the higher stakeholders. I think the DHF and the stabilizer are great but that will only do so much
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Exactly. This could both improve the liquidity of HBD and work as a sort of indirect publicity for Hive ecosystem as a whole.
The problem that I see with hive is that it can only grow at a very slow speed. As you say it's not that interesting for big investors and maybe I'm not unhappy about that. As for HBD, the fact that you recieve 12% interests actually reduces its liquidity because nearly everybody puts HBD into savings.
For some it's a pitty that Hive is not ready for big investors, for others like me, I believe it's good like that because it means that it can only progress in a slow, organic manner. In my opinion that's the best way to build a system :-)
Exactly.
I understand your point, and frankly, I wish that were true, so we can gain more early adopters benefits. That would make sense if we were alone in a bubble. But we are not, and everything around us in crypto evolves at a rapid pace. I don't believe the fable about the turtle and the rabbit makes sense for exponential growth. But who knows, maybe I'm wrong.
Wow, I actually understood this. At least, I think I did. My response/question may sound stupid but bear with me.
I was thinking about this and something occurred to me; do want Hive to be the one going up with all the other tokens/front ends growing? I feel like, in a way, having Hive as the conservative center of all of this is like an education city, providing the infrastructure, but you're not meant to just stay in the middle of the street but you'd actually really benefit from the colleges/schools/universities in that place. The city itself needs to be stable/conservative or as you put it, defensive, as that is simply its role. Hence, we evolved into communities/tokens/front ends.
If I am not making sense, sorry. Take what I am saying by intention.
I don't have an issue if changes happen on the layer 1 or layer 2, as long as they happen. Where they should happen, it depends. Layer 1 should be secure, but not necessarily conservative. At the same time the proposal to fund a HBD/BUSD pool on BSC through DHF wasn't voted above the threshold, which to me makes little sense.
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