Dissecting Tokenomics and Game Theory

anomadsoul in #hive-111111 • last year

I'm a fool for Game Theory.

I'm not an expert on it, and I don't have a lot to back this recently found love. I haven't build a social media platform with its own tokenomics and foundations that actually work in practice - I would be drinking mojitos in Bali, sunbathing with my $10M property behind me if I had - but I think I will be able to raise some valid points here.

This is not gonna be a storytelling post, both because of the community I am publishing this to, and because I want to stick to expressing my opinions.

Hive's Reward Pool

Why are we paying the same rewards ratio to every content, no matter what they do with their rewards?

One of the ideas expressed by @deathwing here is that we could lower the reward pool allocation and use that to reward Hive Power holders.

I don't think that is the solution. Why would you reduce the rewards of long term minded content creators because we have some short vision creators who insta-sell the $hbd and insta-powerdown the Hive Power they get from post rewards?

Instead, we should have content creator Tiers, and depending on how long they want to freeze the rewards from the post, it's the amount of rewards they receive from said post.

I'm not gonna run numbers because if this idea gets adopted I'm sure someone with a better understanding of both game theory and tokenomics will trump my proposed numbers, but the Tiers could look like this:

Lock this post rewards for 50 weeks and get 100% of your content rewards plus 20% of the declined rewards from the other tiers.
Lock this post rewards for 40 weeks and get 100% of your content rewards.
Lock this post rewards for 30 weeks and get 80% of your content rewards while declining the other 20%.
Lock this post rewards for 20 weeks and get 60% of your content rewards while declining the other 40%.
Lock this post rewards for 0 weeks and get 40% of your content rewards while declining the other 60%.

Simple. If a user signals their long term mindset while creating content on Hive, they get 100% of the rewards from the post. If a user is only creating content to get liquids because they need them, then they only receive 50% of the content rewards.

I don't think there's something wrong with selling post rewards, in the end these users are also providing value to Hive one way or another, and their rewards are theirs to do what they want. But we can definitely penalize this short term mindset.

_{We could even play with these very same Tiers for curation. Stake for longer than 13 weeks and get added value for your curation, or stake for shorter and decline curation rewards. We could also add penalties for having insta-power downs.}

What happens with the rewards declined by short term content creators?

Well, they go to Hive Power holders, effectively giving value and a use case to staking Hive. This amount would be dynamic and would 100% depend on how the community behaves and decides to earn, thus the game theory approach here.

Would it add a layer of complexity to post rewards? Probably, but it's not like the user experience is incredibly smooth right now, so adding this layer would be easy to understand for every current Hiver. I leave to brighter minds to decide what should be the default content reward scenario for new users.

Lowering HBD's 20% savings APR

In the same post by DeathWing, he makes a case for lowering this amount from 20% to a still very competitive 12%.

These are the top3 DuckDuckGo search results I get when I search for stablecoin APR.

These are the results I get when I search for best stablecoin APR:

My first question would be, "Are we really that incapable to SEO the hell out of a few articles so that HBD comes up at the top of both search results?".

This 20% APR is a huge tool that we could leverage to onboard investors into the Hive ecosystem, and yet we are currently not doing anything about this. We have a plasma gun that we are not using in a way where everyone else's got a rifle.

I don't think we should lower this APR, I think we should market the hell out of this amazing APR and bring outside liquidity to Hive.

_{I have no horse in this race by the way, my almost 100k Hive is either powered up, providing liquidity in Leo's DeFi platforms, or sitting in liquids in alt wallets because I am betting for a $hive pump later this year and I want to sell so that I can buy moar after the market settles.}

Value Plan can allocate some funds for someone who knows SEO like @rubencress to compose extremely good articles that rank higher. We should pay for some articles in prominent news outlets and alpha oriented crypto websites to spread the APR $hbd offers. Make a small marketing plan, funnel some funds into it and get it done.

If after a few months of marketing we are still sitting at 7.5M $hbd in savings instead of 20M, then and only then I would support lowering this 20% APR because if marketing done well doesn't bring whales to get $hive, convert it into $hbd and put it into savings, then I don't think anything will and we can call it quits.

What do you think?

Feel free to share your opinion here or directly in DeathWing's post.

Posted Using LeoFinance Alpha

#governance #hbd #community #vyb #proofofbrain #leofinance

last year in #hive-111111 by anomadsoul

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kryptik last year

If you look at some of the analyses by @demotruk , I believe that powering down may not have as big of an impact as some believe.

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devpress last year

Just one game or the one service in SAAS where Hive is accepted, the whole game will change. We need to become a chain that has a lot of games served. Polygon has slowly captured market of games like this. All financial transaction are on chain. Rest game is stored on AWS orso, no chain interaction. As usual games on chain would change the game.

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1 vote

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beerbod last year

I agree to the tier system. If I am to make changes. I would lower down the number of weeks needed to be locked as powering down already takes a long time. I would however add couple of criteria(s) into the mix like there should be minimum number of posts and must have curated/ upvoted x amount. These additional criterias could also have its own tiers.

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mcoinz79 last year

Although I don't like the idea of lowering the 20%, I do see the appeal. I do like the idea of lowering the rewards pool, and shifting it to hive power holders!

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manuphotos last year

Agreed and agreed. Many times i have spoke about the SEO and how we should be using it for getting the content created from every user out there. It's even more important for the thing of the blockchain.

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yecier last year

What about set a 20% HBD Savings for amounts lowers than 10k (HBD) or increase the HP APR for accounts with less than 10k HP. More stack lower APR.

That way you make sure small users are the beneficiaries equilibrating the map of power and getting there chances to grow and bet for the network.

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urri2020 last year

It is better when the curator in Hive receives 20% per annum (that is, the 50/50 system should change to 100/0). And for the authors it is necessary to introduce a system of donations.

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2 votes

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paasz last year

Great article by Erick, our Leo genius

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1 vote

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antisocialist last year

0% of rewards from the pool go to people that don't get them voted to them.
When curators vote to dumpers no elaborate schemes are needed, just stop voting rewards to those that dump them.

Everybody wants change, but nobody wants to change.
20 accounts control 50% of the rewards.
Day after day, for all these years.
If too much is being dumped, I blame them.

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nonameslefttouse last year

Could signal long term and collect, later. No problem! Patience is easy. Does not prevent me from dumping what I have. Same for everyone else, except new people. They get burned and have to go through the entire process of waiting to actually earn their full potential from their hard work. Their other option is to get burned by choosing to take a hit.

Also, one could signal long term and post every day for 50 weeks. First day of week 51 they dump (Waited forever, it's a given). They also post that day and signal long term. Now they're posting daily, and getting paid daily. Always signaling long term, which now means nothing.

Did I miss something while I was away for summer? Did something break?

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bitcoinflood last year

The lock content is an idea but one I feel wont do anything. Instead it just adds yet another layer of complexity and understanding to hive. Not sure how to bring Hive real value besides offering a higher APR on it but more over giving people a reason to hold it. One would think giving more towards curation over author or the other way around would be a good idea but that's been proven bad idea before so the 50/50 current setup makes the most sense so no adjustment there.

The real question is what do we have to do or build to make hive valuable. Why would you want hive and to hold on to it. Well the biggest things at first would be decent APR which is very low right now but you also want people voting on valued content. Issue there is 95% of people don't really care to read posts and truly vote up valued content. They simply just vote on what's under 24 hours and has a decent payout so far because they will earn more curation rewards for doing so with very little effort.

Until Hive can answer why someone would want to hold on to and own some hive it's going to have major issues with growth and holding value. Hive is currently looked at as a social platform to post threads and articles and get paid for doing so. Thus a cashing out mindset. Either that mindset needs to be adjusted or you need to build applications that bring value as to why you would want to own and hold more hive.

So perhaps with what you said above with the locking. An idea of locking of 100% means you get total payout but it all gets locked up into powered up hive after 7 days.

80/20 split if you choose to now power all of it up after a weeks payout on the article. That means 80% gets paid out to you in a 40/40 split 40% powered up and 40% liquid like we see now and 20% gets burned. Thus incentivizing people to want to fully power up their article rewards and being rewarded a little extra for doing so since they are committing to a 13 week unlocking period of which a partial of it could be unlocked through power down per week.

For search terms
Stablecoin APR ( Is 10 searches per month)
and best stablecoin APR is roughly the same if not a little less.
There's no real traffic there people really are not searching this stuff.

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edicted last year

we could lower the reward pool allocation and use that to reward Hive Power holders.

That's a terrible terrible idea. Just awful. None of the logic lines up. For starters, Why are we paying users to write content? We pay them because the game theory says the content has value. Would a corporation pay you to work for them... give you stock options, and then admonish you for dumping the stock? No of course not that's ridiculous and would never ever be deemed acceptable.

Hive does not need more timelocks either. We're doing just fine. Pitching ideas to completely change the way inflation works during a bear market is never going to work. We can not stop the market cycle, and if we try to tinker with things to make number go up during the bear market it's going to fuck everything up and make it so much worse.

There are many ways to build value on a network like this. We need to stop trying to refactor the emissions thinking we can make the internal mechanics more efficient and only focus on bringing in value from the outside without changing core code.

The system you propose allows people like me to completely exploit it. I would just lock up the money for the maximum amount of time and get the maximum yield, and simply sell other tokens that aren't locked at the time. It rewards users that simply have more money, not ones that have a longer-term vision. It's a temporary solution because after a year is up and the money starts unlocking we are right back at the same problem we had before.

In any case I hate to casually shit on your ideas like this...
Let's destroy the ninjamine bruv.
There's one hardfork I'll get behind.

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1 vote

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atma.love last year

Can you say more re. the last two sentences please.

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shiftrox last year

I won't say much because I don't have that much technical and financial knowledge yet, despite having learned a lot since I joined Hive, but I found your comment very interesting:

My first question would be, "Are we really that incapable to SEO the hell out of a few articles so that HBD comes up at the top of both search results?".

This 20% APR is a huge tool that we could leverage to onboard investors into the Hive ecosystem, and yet we are currently not doing anything about this

Indeed, it would be very good to use that 20% APR to attract the attention of new people and investors, considering that in the survey you carried out, the maximum was 14.5% APR, so we have a good opportunity on our hands to provoke a out of curiosity for anyone looking at that 20% APR value.

It would be a great initiative to present on an onboard I believe.

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miniature-tiger last year

I'm also a big fan of game theory in crypto.

But I think that in general, approaches which aim to restrict the supply of a coin (such as lock-up periods for coins or incentives to power up) are only useful in the short term. They are good for bootstrapping a coin at inception but once a coin has reached some level of maturity they just result in volatility. Any rise in the price of the coin will (fairly swiftly) be met with power-downs and an increased supply of the coin. The dam breaks and the price falls again.

Mature coins should instead focus on increasing demand for the coin. For Hive I think that means more uses for the coin and increasing the size of the community (easy huh!).

If you were to ask Hive hodlers what they currently do with their coins, most of them are probably going to say that they use it to take part in the content creation economy, either as curator or creator. Some will say that they just hold the coins as an investment in Hive for the future and don't really do anything with them. And this works. It's always important to remember that Hive has been successful where so many web3 social media efforts have already been and gone.

But if you are just a casual social media user who posts or comments infrequently and does not actively curate (as I think most people are) is there any active reason to own Hive (aside from the minimum level necessary)? There needs to be more. And that's an article in itself.

tl;dr:
Increase the reasons to buy Hive rather than restricting the right to sell Hive.

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