Units vs Price | Staking vs Income

in #hive-1679222 years ago

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Units vs Price | Staking vs Income

With prices going wild and so many unknowns in the crypto world it's important to take a step back and reevaluate things. To me #hive is the single place where we are seeing true #web3 and it's been that way for a while. I've tried many other platforms and while there are some notable ones like Minds and Torum but for the most part these other platforms are either dead with crickets or have too many issues.

Units vs Price

Think of Hive, LEO and other layer 2 tokens in terms of units and stop looking at them as price. When you start looking at units you'll notice something especially with Hive. You'll have more resource credits to do more on chain, if the price falls you actully earn MORE hive and you're APR rate increases as you have more hive powered up. All of this starts to compound and build a rather robust crypto portfolio.

Looking at price means one thing, you're most likely looking to cash out and sell. But that's not what Hive or crypto is about. These are alternative currency systems and we have gotten WAY too used to comparing the price of a token to the fiat system. Hive holds A LOT more value than just it's fiat value.

Staking vs Income

I feel one of the biggest negatives of hive is this idea that the money just comes from no where and because you made a blog post about some project or whatever you expect a payout from the community and to cash it out.

That's honestly a exit point of capital for Hive and other assets with that mentality. It's the main mentality that has been going around for a while on Hive but here's the thing. At the moment Hive only generate revenue through speculative investing. It does not come from ad revenue, sales or any other traditional business means which to be honest I find a bit disappointing.

This is why I'm betting heavier on LEO as it's backed by income generation through ad revenue. It's one of the BIGGEST disconnects the crypto industry has right now. Nearly all tokens are based on speculative prices and generate no income revenue to fuel the value of the token besides investors and hodlers. Outside of that it's the applications that people want to use that provides the demand.

LEO is doing it right in my opinion. Ad revenue has generated some of the largest web2 applications we see today. From Facebook, Instagram, TikTok, Youtube, Twitch and more they all have one thing in common a large amount of the revenue they generate and give to content creators is from ad revenue.

That doesn't mean web3 applications need to take your private information like these web2 systems do it can be more of a general type ad network. Paying to have your post featured, ad revenue from non tracking platforms like a-ads and so on. Another option which has been worked on a little is to have a digital footprint in which information would be gathered about the person but the identity of that person would not be tied to it. This still offers up some targeted marketing for advertisers but it doesn't give away any tracking or data about that person or who they are thus removing privacy concerns which is a big one happening in web2 right now.

So how do you help #hive and #leo grow?

By looking at it as it's own currency. Staking it and understanding the value of hive as a resource credit and that ad revenue does in fact help the value of the token. Don't look at it as a payout for your content at least not yet not until hive or these other layer 2 options like SPK start at least running some ads to really give value to the token.

What are you thoughts on what gives real value to a layer 2 or crypto asset?

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This is the ongoing debate and dilemma of crypto, right? What gives it value or why is it worth something. I get the question from newbies all the time. Ad revenue and bridge fees are a good start for leofinance.

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Totally agree of course there's the network fee, curation demand etc which all hold some value but I firmly believe if more tokens and blockchains built as a businesses to generate revenue in particular layer2 tokens of #hive it would be a very smart move. I'd honestly love to do it myself one day.

Indeed, it would be amazing to have more clarity on these and number of LEO burned afterwards.

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So true because in times like this looking at Leo and hive in terms of price, it would weak out morale, therefore, one need not to consider the prices and rather see them as a future in important tokens.

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Oh, those are really strong thoughts! Many people don't understand it...
!LUV

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That's a really cool way to look at these two. Prices in crypto are not the true picture of the worth of a project. Both Hive & LEO are underperforming in terms of prices. While in terms of development, there's no stopping.

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!BEER I agree about focusing on the number of tokens I accumulate rather than price. Pile them up now, sit on them. Time will tell.

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Thanks for the
!BEER 🍻

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I would love to see some transparency about these numbers. Do we have any idea? Also ad revenues are burning LEO so as long as we are emitting net LEO, we are also printing.

The reality is that it covers such a small percentage of emissions that HIVE and LEO tokens are both coming from no where. At least LEO has a plan to generate future revenues, I would give you that.

Other question, I always asked myself: our emissions are not capped in any way as if tomorrow somebody delegates 10mn Hive Power to the leofinance account, it will get the 16% yield paid in LEO (new ones?) and I do not think the curation rewards generated by the Leofinance accounts are being used to burn anything.

These are honest questions I have and I would love some insight if you have some.

Thanks! Upvoted!

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A few things

  • Ads are not burning LEO this was the case way back when but right now the revenue is being pooled into a smart contract and at some point it will be used to buy LEO off the market and award it to those who are staking LEO tokens.

  • 16% APR comes from buying the LEO again through the hive power generated. So it's selling Hive for LEO (at least that's my understanding)

  • Well, I think I am a big user and I have missed the last update, oops. In any case, it could could reduce supply or be used in contests, etc... but it does not reduce emissions automatically.
  • I did not understand it that way. I don't think these are LEO bought on the market. Also, as Hive curation is 8-10% max, that is still an extra 6-8% APR paid in LEO and emitted.

Thanks for your answer!

You make excellent points in your post. Thanks for sharing

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I believe that hive has an advantage over other cryptocurrencies that are merely speculative.
Hive has a network without gas fees, which brings great chances of attracting good projects and thus bringing in new investors.
But to be honest, I'm just a layman curious about the subject so I might be wrong...lol
Thanks for sharing.
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In a way it has gas fees they are required staking of hive to rebuild the resource credits needed to do actions so it still holds a value for application use and demand there. However I feel that's very low on the list now with the sheer size of it all.

Yes but this is not lost. And the big problem in my view of most networks are absurdly high rates. So having a rate that you just need to stack currency and it self-regenerates daily is a big difference

Very true and one of the big benefits hive offers I feel.

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I totally agree with you about ad revenue (well actually, all your points, just this one most especially of all :) ). But there's a gap, or maybe I'm missing something. Web3 is supposed to be about empowering ordinary users, compared to the mega-corporations running Web2.

But all the adverts I have seen have been from large companies with impressive advertising budgets seeking a global audience. I haven't seen any ads from businesses like mine, micro-businesses focusing on a local or national level audience.

Google worked out early on that having a million customers with a $100 a month budget delivers more stable revenue than 100 customers willing to spend a million a month. Web3 could learn from that !

I feel the key is somehow (and I don't know how !), while maintaining absolute user privacy and decentralisation, to create the tools to enable small businesses to market locally and avoid paying for marketing costs to users outside their target area.

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While most run banner ads Hive does offer the ability for people to write a post and then "pay" in tokens to market the article on the platform. It's something that's not marketed heavy at all and I don't get why. A large ad platform that does keep the privacy focus is a-ads

I'll look into a-ads - thank you ! It's fair to say I think I need to re-think my mindset around advertising as well.

The Web2 way is to create an ad for a product knowing that the platform I send it to will ensure it's targeted to the right geography.

In Web3, it's more a case of making content around a product or service, and either finding a way to deliver it globally (almost impossible for the kind of physical goods I sell), or using Web3 to only market non-tangible goods. I can't think of a way to focus a post to only be seen in a particular geography, and can't think of anything more frustrating than to pay to promote a post knowing that much of that spend will be used up on people who are interested but in places where I can't fulfil an order !