Return Proposal?

Lately, we've been seeing posts promoting the Return Proposal regularly. And to my surprise, I saw many people who had no idea about the Return Proposal. I think we can conclude from this that many people don't know much about how Hive works, how the DHF works, and what their role could be in all of this. Many people are only busy writing blogs to collect their daily share of the reward pool. Whether or not to grow their Hive Power, save HBD, or because they want to cash it out immediately to use for daily living expenses. And although I'm not that 'blockchain-tech-savvy' at all, it seemed worthwhile to take a look at the reason why so many people are suddenly blogging about the Return Proposal.

Down, Down, Down

This of course has to do with the current downtrend that Hive has been in since December 2021. Now we know of course that the Bear market started at the end of 2021. We also know from previous experiences that this does usually not end very fast. But where it started to get strange, was when almost every crypto started to climb out of the valley again, except Hive. When Bitcoin set a new all-time high earlier this year, and Hive very disappointingly fell even further. While many cryptos are now balancing around the level of the end of 2021, we can say that Hive is still miles away from that. And that there is also little hope that Hive will return to that level anytime soon. This of course has several reasons, but I think we can safely say that there is a lot of selling pressure on Hive.

Why Is There So Much Selling Pressure?

Then it makes sense that people start looking at where this immense selling pressure is coming from, and all too often there is pointing to people who don't keep their blog earnings but cash them out. But if I understand the data analyzing blogs of @dalz correctly, then the bloggers are not the problem at all. But we are dealing with two things that are causing a lot of selling pressure on Hive. And then we are talking about the HBD Stabilizer and the high expenses of the DHF.

DHF

The budget of the DHF is fixed at 10% of the Hive inflation. But in recent times, the HBD to Hive conversions has created a considerable additional inflation. This is mainly caused by the HBD Stabilizer. Now of course everyone wants a stable HBD, so whether much can be changed about this, without possibly collapsing the price of HBD? I don't know! I'm not a mathematician. And then the DHF expenses, which are also disproportionately high, and which also create a lot of selling pressure for Hive. The community has this in their hands! Don't get me wrong. In principle, you won't hear me saying that the DHF is a bad system! For those who don't know, Hive has a unique mechanism to fund community and development projects through the Decentralized Hive Fund (DHF). This inflation-driven fund plays a crucial role in supporting various initiatives. These initiatives should be aimed at strengthening the Hive ecosystem.

DHF and the community: an overview

The DHF is the financial heart of Hive, designed to support development, community-driven projects, and marketing. Anyone in the community can submit a proposal, and if it gets enough support through votes, it will receive funding. Most projects receiving funding are more focused on Hive development, but there is also a large project funded by the DHF that is focused on promotion (proposals worth 2.5 million HBD since 2022).

The question is whether this level of spending is wise given the current market situation for Hive. With the price of Hive lagging behind other cryptocurrencies, we have to ask ourselves: should the community continue to approve such large expenditures on both development and promotion? Of course, both are important to Hive, and we need both. But given the current price of Hive, we may have to ask ourselves whether we should not put these activities on hold for a while to counter the downward pressure on Hive and whether this method of funding is the best way to go.

With such large amounts of money at stake, many members of the Hive community are calling for more accountability. Shouldn't projects funded by the DHF provide the community with regular, detailed updates? Weekly or monthly reports detailing the impact and results of all the efforts made would allow the community to judge whether these expenditures are benefiting Hive. Can we justify the money spent? Are we seeing expected returns in terms of user growth, project development, and demand for the token?

A clear, transparent way to track the effectiveness of such initiatives would help the community decide whether these large expenditures are still justified.

Sparking Discussion

The purpose of this post is not to argue that DHF spending is inherently wrong. The purpose is to spark an honest discussion within the Hive community. How can more accountability be taken for the initiatives funded by the DHF? Are people even aware of how the DHF works? Do people understand where the money is coming from? Did people know about the Return Proposal and do you understand that you have a say too in deciding where the DHF funding goes to?

The future of Hive depends on smart, strategic decisions. It is up to the community to decide whether current spending aligns with those long-term goals, or whether a change of course is needed.

Return Proposal

Now, you may think that there is not much you can do yourself, but one of the things you can do is to understand what is happening within Hive. Those projects submit a proposal, and this will or will not receive funding. Depending on the number of votes. And depending on the Return Proposal. The number of votes on the Return Proposal determines the minimum number of votes that are needed for a proposal to receive funding. The higher the number of votes on the Return Proposal, the more votes a proposal needs to receive funding from the DHF, and the higher the number of votes that are needed, the more difficult it will be. In this way, the community itself can have a say in what they think is good for the community.

Now you will not hear me say that everyone should vote on the Return Proposal, of course, everyone decides that for themselves. But it is important that you are aware of how the DHF (proposal system) works, and that your vote also counts.