I think the crucial things for the ecosystem is to have marketplaces (shops) developed. We often talk about economy yet there is very little commerce.
If we want to stop people from blogging, getting rewarded, and then going to exchanges to sell the HIVE, we need to give them a place to spend those tokens. While in game purchases are great, for much of the world, being able to buy some basic necessities would go a long way.
This would ensure that the tokens operate in a circular nature and do not leave the ecosystem.
Commerce is crucial.
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In my view, commerce will never be equal to a systematic burn mechanism that scales perfectly with every single impression delivered to site visitors.
The things like LeoShop and in-game NFT's are interesting and certainly have a place in the token economy. But, at its core, this is a social media blogging/vlogging platform. Most of the users will come here for that. Therefore, we need a flagship token mechanism (like BNB's "buy and burn") that is correlated with that overwhelming primary use case.
Stinc I think was already doing it, but using it to pay their developers if I'm not mistaken.
Why not both?
I think this is a good driver of value. Knowing that every time you viewed something on a site you increased, by just a little bit, the value of that economy.
Of course, having both is fine, like I said. We can sell investment reports, in-game items, Zoom consultations, whatever... But like you said, it's just keeping the turkey alive for another few days. Eventually Thanksgiving happens and someone sells the HIVE on an exchange.
Of course. Though exchange value matters less if there is an internal economy.
Exchange value matters a bunch because the development DAO is denominated mostly in HIVE. Increase exchange value, longer runway. Decrease exchange value, shorter runway.
Tokens never leave the economy (apart from burning). A sale is merely a transfer to an exchanger, hence the lack of economic activity manifests as an increase in the % held by the exchangers. But nothing ever leaves.
Staking is also one way to encourage tokens, at least temporarily to stay within the eco-system. But, for sure, the commerce that you describe could also be another. Except that commerce which accepts payment in a token and then immediately changes that for $$ is not much different in effect than somebody selling their tokens on an exchange and then buying something. The net effect is that tokens left the economy.
We already have staking. That's what Hive Power is. Are you suggesting another way to stake that provides some other benefit than increased influence (bigger votes) on the platform?
Hmmmm.....
We also have savings, but nobody uses it because the interest rate is usually zero.
Perhaps this is where we can better integrate the Hive DeFi vision of @rycharde to goose those yields and incentivize more people to save!
Thanks for the tags (both @shanghaipreneur and @eturnerx), but as you both also know my dislike of pointless burning as the only mechanism to deflate a highly inflated token - see scot tribes for recent experiential consequences.
Having said that, let's see if it would work on a macro level. The reward pool actually does a decent job at reacting to activity - the only economic activity being the generation of rshares and hence rewards - but what it doesn't do is react to liquidity, or more accurately, the money supply.
We have seen the consequences on Steem of pumping coins into an economy that has an oversupply. So what is need is a feedback loop that can change the minting rate to reflect the coin supply.
In the absence of such a feedback mechanism, burning coins could be used as a mechanism. We can define the coin supply as the ratio of HP over total HIVE.
If this ratio is high, most coins are vested and the burn rate can be low; if the ratio is low, it means most coins are unvested and liquid (and hence cannot participate in the economy) and so the burn rate increases.
We can look at historical values to gauge appropriate numbers and calculate the feedback effect on the reward pool!
On the specific point of fintech programs, the interest generated by the blockchain is far higher than the minting rate; how is it possible for dlease to offer 15% APR on an 8% blockchain? This is a legacy of the Steem economy that Hive has inherited. This can be changed but it first requires a deep and widespread understanding of how the chain actually works.
OH, that's nice! So using staking rate (HP/HIVE) to dynamically control inflation rate (using burns to reduce programmed inflation). This is exactly the mechanism used on Tendermint chains, so that's kind of nice.
My only problem with this is it doesn't directly create buying pressure, so it's not as robust in terms of being directly tied to economic activity as "selling ads to get money to buy tokens to burn." But on the flip side, it sounds like something that could be programmed, rather than managed, which in general is better for decentralization. Managed things tend to get corrupted eventually.
Ah, you see: ideas are free! (sadly) Didn't know Tendermint chains did that.
That doesn't mean there cannot be two different burning mechanisms.
Some time ago. I investigated whether any real economies burnt their money - apart from online games that hold a tenuous link to reality, and to economics - and discovered the Penn Scrip. This is pre-hegemonic-US-dollar and, astonishingly, didn't collapse - was swallowed up anyway. What they did was burn taxes ie activity - they also only lent money to productive industries, hence not to banks. So, again, this was a money supply measure with a consequent price stability and an allowed inflation rate so long as it was matched by productivity. in the broad sense of productive activity.
The selling ads to burn tokens is narrow and would also rely on human intervention, unless the ads were internal - even then, what mechanism would price the ads? a bidding system? Who would use this? I'd have to think it through, though strikes me as a micro-economic measure rather than macro.
External ads would be more useful but would need some programmatic way to ensure that income is used as intended.
I think before a Hive Improvement Proposal, we need a Hive Improvement Team! A HIT anyone?!