I’ve primarily been inactive as a content creator and passively engaged with the chain until I caught up with @crimsonclad at RareEvo this past summer. Catching up with her brought my engagement back with HIVE, and your proposal about removing blog rewards made me think a bit deeper about this subject after we chatted.
I don’t think this topic has a five-second soundbite solution if we are looking for an honest answer because it’s much deeper than just removing the value of rewards from a rewards pool.
The removal of the rewards pool effectively proposes a break of the DPOS governance protocol at the most fundamental level. At its core, that’s what HIVE staking represents – the ability to use the stake you accumulate (through value provided to the network, be it financial or otherwise) to affect change in the governance of the chain (witnesses, DHF proposals, author rewards, curation rewards, etc.)
What makes HIVE unique among all other POS and DPOS governance chains is how content creation and the building of a loyal base of followers on the blockchain permits a path for individuals without financial means to have a voice in the governance of the network - simply by providing value through content they create rather than through a transactional purchase of HIVE tokens. Staking the earned rewards into the chain from that value of the content created is much like a small business owner investing their profits into their business and is what gives them a voice in governance.
This idea of sweat equity allowing an individual to amass a position to influence blockchain governance is unique to HIVE and a brilliant way to ensure decentralization grows on the chain to preserve and evolve the chain as time goes on. It’s superior to other POS and DOPS chains, which permit the ability to affect governance only through value provided by the transactional purchase of a token.
I would argue that removing the ability to earn HIVE for those who provide value to the network through sweat equity (e.g., content creation) reduces the chain to a pure POS governance model Ponzi scheme masquerading as some form of a DPOS “social network” with some defi and NFTs thrown in to enhance the flavor of the Ponzi. What would the chain then become if not another flavor of LUNA? Why would staking HIVE matter beyond any interest one would earn through staking once you’ve stripped the current utility from the token? HIVE blockchain creator rewards are not simply about value and outsourcing it to a shitcoin layer 2 NFT. You will have effectively shut the door for any creator to affect any change whatsoever on the governance of the chain through their hard work and centralized all the governance power into only those with the most significant economic means.
HIVE and the legacy chain communities have always had a very flawed sense that somehow the individual with more significant economic means and transactionally purchased tokens or the DAPP builder brings more value to the chain than the content creator who creates content that attracts attention and brings thousands of new views or new DAPP users to the chain. When creators' earnings show either value parity or greater value than the purchaser or DAPP builder, creators are punished, silenced, demonetized, and forced back into the underclass through aggressive downvoting. It’s a fundamental misunderstanding of where perceived value comes from. Perceived value does not come from cool new tech or the latest slick ponzi simply from being built. Without a growing community, tech alone has no value, regardless of how cool it is or how much capital has been invested. Perceived value comes from a community adopting the technology, growing the community (influencers), and adding value and utility (content creation on HIVE or its various DAPPs, selling products on a marketplace, etc.)
I don’t believe the DPOS governance and rewards pool are the issues. The core issue is the culture and ethos propagated in the HIVE community.
Since the legacy chain, the HIVE culture fosters, encourages, and rewards a Robber Barron culture rather than a growth culture. The culture of the legacy chain and HIVE has focused on strip-mining maximum value created on the chain. It has never been enough to take block rewards as a witness – maximum author and curation rewards were taken in addition through self-upvotes and voting cartels while downvoting others with great content surpassing some arbitrary ROI threshold. Curation trails were created so crumbs could be passed to some of the creators, and automation has optimized the process so perfectly that one doesn’t even need to engage with any of the content. It’s one awesomely efficient, fully automated, circle-jerk of strip-mining value from a chain. It’s the culture and legacy the founders of the legacy chain (Dan & Dave) left HIVE, which remains and is the poison pill that kneecaps HIVE's growth and adoption.
Listen, a growth mindset for any business or project is hard. It requires delaying gratification. It requires spending money. It requires nurturing a product, a community, and an ecosystem. It requires growing the pie rather than eating everything. It requires understanding and respecting the value everyone brings to the table. It requires a common set of values and establishing different community norms propagating across the community.
TBH, I’m not convinced that entrenched behavior and chain culture within HIVE would change or that my observation would be taken seriously.
I’ve attended two of the X Space town halls because the same question is asked constantly about retaining and growing users on the HIVE blockchain. The truth is it’s not a question that seeks any serious answers. The same six people have been speakers – the same three witnesses or six DAPP developers. The same ground is covered, and the same answers are regurgitated. They talked more than they listened, and I found that very little engagement between the panel and the audience happened in those two instances. It’s simply a reflection of the HIVE culture in an audio format – the flawed belief the value only resides in the contribution of the investor and the DAAP creator.
I don’t think it’s the rewards pool or the governance model that’s the core problem. It’s the culture of the community. Removing the rewards pool turns HIVE into LUNA 2.0.
TLDR: Removing the rewards pool destroys the HIVE chain; there is a fundamental misunderstanding of who brings value to HIVE; the problem is the strip-mining culture of the HIVE community rather than encouraging a growth culture.
Would you say the same if the rewards were moved to tokenized communities? If one were able to gain sweat equity in a community token that traded on a DEX for Hive, would that be sufficient?
My reflexive answer would be no.
Given that this hypothetical layer two community token is a derivative instrument that derives all its value from the base layer token, governance of a layer two token with no underlying utility is a fugazi.
From a governance standpoint, why would anyone want a controlling interest in distributing an illiquid rewards pool of layer two tokens? A layer two token will never reach perceived value parity or exceed the perceived value of the base layer token from which it derives its value. A layer two token does not impact governance on the layer one blockchain.
Let's set aside the governance issue for the community token and focus on the alleged exchange of value this hypothetical community token (or, more accurately, "community currency") would somehow provide.
Community currencies are not novel ideas born with the rise of cryptocurrencies. They have existed throughout history (US Depression Scrip) and continue to exist today (e.g. the Kenyan Sarafu Credit).
For the most part, the history and purpose of community currencies (both in the past and the current era) have been to provide a stable money supply in response to a failure within an existing monetary system caused by insufficient liquidity. The community currency addresses the need for a stable money supply to enable transactions that could not occur due to inadequate liquidity. Since the national currency is more fungible, members are more likely to save it [the national currency], using it as a store of value.
Given the only real purpose of a proposed layer two community token would be to allocate rewards of an illiquid derivative token, there is no real transactional value to replace in the traditional sense of a community currency. Historically, community currencies/complementary currencies facilitate transactions of goods and services in an illiquid environment. A proposed layer two community token has no transactional utility which it is enabling due to the illiquidity of the HIVE token. It begs to ask what purpose the HIVE token would serve. What benefit would an illiquid community token on the HIVE chain have that is superior to a community with its independent blockchain and non-derivative tradable token?
From my perspective, abstracting this issue to layer two shitcoin both destroys the value of the HIVE chain and the HIVE token and fails to solve the core issue.