I recently got a message from @howo inviting me to support his renewed proposal (the current one is about to expire).
First, a few clarifications for those who are not aware what a "proposal" is, what is its purpose, and how it works.
How is HIVE distributed?
By now, most people interested in the "crypto" topic are able to answer the question "how is Bitcoin created and distributed?". The bitcoin blockchain appends a block every 10 minutes. The "miner" who manages to "solve for the right nonce", sign and append a block first receives the reward of 6.25 newly minted bitcoins (plus the transaction fees of the transactions it has chosen to include).
But Hive works using the DPoS consensus, not the PoW of Bitcoin. In DPoS, miners are replaced by "witnesses" which get a block to sign with a frequency which depends on the total number of "votes" they receive from the community of users, with a twist: unlike today's political democracies, where each person has one vote, "voting to elect Hive witnesses" is more akin to today's "shareholder democracy" in force in publicly listed companies - where the equivalent of "shares" is, here, the Hive Power.
So all the newly minted HIVE is ditributed to the witnesses, right? WRONG! One of the best features of the Hive blockchain is that, unlike Bitcoin or Ethereum (or almost all the other blockchains with a few exceptions), it is not a "computocracy" ("Those who master the computer, hold the power").
As a matter of fact, only 10% of newly minted HIVE is distributed as rewards to the witnesses!
The vast majority, 65%, are used in the "reward pool" which serves to incentivize authors and curators.
15% are used to incentivize people to stake HIVE (transform it into Hive Power, HP) rather than keeping it in liquid form.
Finally, 10% are used to feed a DAO, the "Decentralized Hive Fund" (DHF)
Source: a PPT slide I made for a class I teach. Explanatory text in French
What is this DHF?
To find out more about the DHF, you may begin by asking ChatGPT:
Me: What can you say about the "Decentralized Hive Fund" (DHF)?
ChatGPT: The Decentralized Hive Fund (DHF) is a key component of the Hive blockchain's governance and funding mechanism. It was created to replace the Steem Development Fund (SDF) after the hard fork that led to the creation of the Hive blockchain.
The DHF is a decentralized autonomous organization (DAO) that manages a portion of the Hive blockchain's inflationary rewards. The DHF uses these funds to support various initiatives that benefit the Hive ecosystem, such as funding development projects, marketing and community outreach, and other ecosystem-building activities.
The DHF operates through a proposal system, where anyone in the Hive community can submit a proposal for funding. These proposals are then reviewed and voted on by the Hive community, with the highest-voted proposals receiving funding from the DHF.
The DHF is an important part of the Hive ecosystem, as it provides a mechanism for the community to fund and support projects that can help to improve the network and increase adoption. It also helps to ensure that the community has a say in how funds are allocated and used, which helps to promote decentralization and community involvement in the governance of the network.
Ok, but how does the DHF actually distribute the funds? Well, it works like that: there is a "benchmark proposal" called "Return proposal #0". Anyone can vote for it, which "raises the threshold" for receiving funding, as you cannot vote "against" a proposal. Proposals with less votes (measured in the sum of HP of the voting accounts) than the Return proposal are not going to get funding.
Hive Core Devs
Hive evolves thanks to its "core devs", of which @howo is one. I appreciate him and his work a lot and reckon Hive can use a lot more people like him. Howo has worked on RC delegations and recurring transfers and other features being packed up for HF 27
In this respect, I regret @jga is not among the Hive core devs anymore and chose to go work on Koinos instead.
New features: a Hive-Backed Euro should be a priority
My feeling is that the DHF would benefit from more publicity in order to get more users involved in choosing the development priorities. It would also probably benefit from increased transparency and scrutiny. There are a lot of proposals getting funding but it is not clear how coordinated they are and whether they aggregate (whether spontaneously or though some "nudges") in a coherent vision of where Hive (which is the backbone of the community) is headed.
I believe the HBD is one of the most powerful features of Hive and reckon adjoining a HBE (Hive Backed Euro) to it would do a lot for the increased popularity and usage of this blockchain. I would very much like to see the Hive core developers proposing to work on including a Hive Backed Euro (HBE) complete with an internal market, an LP (stabilization fund) and an AMM, in one of the next evolutions (called "hardforks" on Hive, despite the fact they do not ressemble Bitcoin or Ethereum hard forks).
What do you think? Would you support a proposal to introduce a HBE in the next Hive HF?