HIVE can participate in the emerging DeFi landscape.

in LeoFinance5 months ago

There is an incredible opportunity on the horizon for HIVE to become more than it is today. Defi is booming, and driving the start of the current Bull market for crypto we see emerging. There will soon be a way for HIVE to participate, and it could solve some of the issues that people have been discussing recently, without needing to alter the base layer of how the HIVE reward pool works.

Rune Logo.JPG

Thorchain. Native token RUNE.

Thorchain is an up and coming project that has caught the eye of a few people here in LeoFinance. Most notable is @shangaipreneur, who has been writing about it since before DeFi captured the market attention. I would encourage anyone that has missed them, to look back on his articles about Thorchain. The easiest way to find them is by following the links in this tweet.

For those not aware, Thorchain is developing a cross chain swap platform, using a continuous liquidity pool model, with RUNE as the native token. Simply what that means is a decentralized exchange - but one that rewards liquidity providers (people staking assets to the pools) and node operators. This means that anyone will be able to stake their coin (BTC, ETH, BNB, whatever) into a pool on Thorchain, and earn RUNE rewards based on swap fees from the pool, and some token emissions.

It is a fair bit more complex and nuanced than that, and I would really recommend anyone interested to do more research on RUNE. The token is up roughly 8X over the last 3 months. The project is still in test-net phase, with the next stage (Chaosnet) about to begin. This is the final preliminary phase prior to the launch of the main-net.

How can HIVE join the party.

Thorchain is a "Chain agnostic" protocol. That simply means that it can bridge to any blockchain. Once the mainnet is up and running, linking is a matter of creating a new pool for the token. This will build the bridge from the chain (in this example HIVE) to thorchain - and thus every other chain already linked. Once people "stake" their HIVE into the liquidity pool, It grows the pool and adds it to the queue to be added into the list of active pools. Thorchain is designed regularly and aggressively churns its nodes, and to re-enter the system nodes must be running the latest version. This ensures that any changes or new chain links are quickly cycled into the system.

In simple terms, once the Thorchian mainnet is up and running, the Hive community can link itself to Thorchain without having to ask for any ones permission. We can just do it.

Why would we?

I have seen some debate around Hive lately about the nature of the Reward pool, and making significant changes to the tokenomics here on HIVE. Linking up with Thorchain could be an alternative solution, that would keep everyone happy. Here is how it would work:

I want to invest in HIVE, make an ROI, but not bother with the blogging and P.O.B. side of things:

  • Buy HIVE - or swap other coins into HIVE via Thorchain.
  • Instead of "Powering up" and locking my tokens away for 13 weeks, I can stake them into the HIVE liquidity pool on Thorchain.
  • Tokens remain available, and can be unstaked at any time - meaning investors can earn ROI from HIVE stake without Powering it up.
  • A deep pool of liquidity would make it easy to swap from any major coin into and out of HIVE, making HIVE a more attractive investment.
  • Return for staking HIVE in an LP is payed in RUNE - meaning their is no inflationary impact on HIVE. If this becomes popular, the investor class here can earn ROI with better liquidity, and those who do choose to power up the old fashioned way will earn a higher ROI due to less competition from whales for the reward pool.

Why Thorchain in particular?

  • It is chain agnostic - it can link to anything.
  • Tokenomics design is genius - from what I can understand.
  • It's like a "cross-chain Uniswap"
  • It's not on Ethereum - so you wont have a massive GAS bill any time you transact.
  • No KYC.

Imagine a world where SMT's finally exist - as a layer 1 part of HIVE. Once the bridge between Thorchain and Hive is built, SMT's can easily have their own liquidity pool on Thorchain. Imagine being able to swap directly your LEO or NEOXIAN or whatever into whichever crypto you like, without having to go through multiple steps and various Centralized Exchanges/KYC processes etc.

Other synergies:

The communities of RUNE and HIVE are remarkably similar. Both are passionate about decentralization. The HIVE community did battle with centralization - original suffering under Steemit control, then with Justin Sun, and eventually forked away as a community to create HIVE as we know it today. Thorchain is being built by "semi-anonymous" developers, and is being designed to be 100% community run asap. Both communities have backed the underdogs in many regards, being involved in a community run project instead of a centralized - big money alternative. Both communities seem to value a lack of KYC, and are looking for economic freedom.

Ways HIVE could integrate:

  • Liquidity pool - as discussed above.

  • Tools and links could be built in to existing HIVE projects. Imagine being able to swap HIVE to BTC, ETH, BNB or whatever your coin of choice is (or indead swap these coins into HIVE), directly in your HIVE Keychain. Or on HIVE engine or LeoDex, or in your wallet on PeakD. HIVE developers would have an incentive to build in these services, as the Thorchain platform allows custom fees to be included. PeakD for example could add swap capabilities in by adding Thorchain, and place a 1% fee on the transactions. This would become an attractive monetization option for these services to include.

  • Makes HIVE more attractive to investors.

  • Investors wouldn't need to participate in the "Proof-Of-Brain" aspect of HIVE, leaving the Reward pool as it exists currently for those that want to participate. No need to Stake and delegate, or actively manage your HIVE power to maximise ROI. Retain higher liquidity and still earn bank via pool fees.

If you have read this far, Thank You. I'd strongly encourage anyone interested to conduct further research into Thorchain and the RUNE token. I would love to hear from some of the HIVE leaders and core developers what you think of this opportunity. I don't have any development skills, and am just a little guy around here (and have a small RUNE bag I've collected in the last month or so)

Tagging a few HIVE people to see what you all think.


Apologies if you don't like being tagged, but I would really like this idea to be considered.



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I have shared this post on twitter - feel free to show some love and spread it aorund if you like.

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I know very little about it.

The token is up roughly 8X over the last 3 months. The project is still in test-net phase, with the next stage (Chaosnet) about to begin. This is the final preliminary phase prior to the launch of the main-net.

How can the coin be up at all, when there is not even mainnet? Is it an ERC-20 token right now?

The RUNE token is on Binance chain.

The chain is being built on Cosmos architecture as I understand it.

Pretty good idea the way you put, I'm just a normal guy as well so some the terms might sound technical but I kind of get the picture.
I was actually looking at RUNE yesterday as I search for which coins to buy.
Hopefully this can get Hive in the DeFi party.

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I like RUNE, a little late to find it but I'm well in profit. I think rune has a lot more to go, but D.Y.O.R.

Thank you for writing this.

I’ll keep on eye on $RUNE

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one to watch I think. Some very nice synergies for HIVE.

Does it require a Hard fork? Since there must be some change in regarda to token distribution.

No, this would not change HIVE in any way. It woukd build a bridge between HIVE and another chain, but no HF needed.

All sounds good - how do me move from here? Do we need to pay Rune to add Hive support?

No, no fee to be listed. I think the next steps would be basically education. Learning more about how it would work in practice. Thorchain isn't quite ready gor us yet, there is one more testing phase before the mainnet launches with full cross- chain capabilities.

Possibly some prep work for HIVE devs and Thorchain devs if there is community and stakeholder interest.

Thanks for your support.

What exactly does "staking" HIVE on the Rune chain mean?

It is a very different concept to "staking" as we know it on Hive. It would not mean powering up. Basically, to participate once the thorchain mainnet is operating, hive holders would have the option to add their liquid hive into a liquidity pool on thorchain. Those funds are balanced in the pool with RUNE. THe hive is then available for anyone to swap in and out, with any other pooled asset (BTC, ETH, BNB or whatever).

When you decide you want your hive back, you simply "unstake" and your hive is back in your wallet in minutes, plus your share of the fees that the pool has generated.

I have only been researching a few weeks, this is my understanding of how it could work, but I'd need more info to be sure.

So, you'd transfer your HIVE into a Hive account owned by the exchange? How is that trustless? Why is Thorchain a blockchain?

The "No KYC" thing sounds nice, but if I am loaning my HIVE to some other chain, that does not seem trustless at all, and even reminds me of the BEOS thing. I prefer as trustless as possible.

Also, you say "you want your hive back, you simply "unstake" and your hive is back in your wallet in minutes" - why minutes? Is a human middleman involved in that in any way? Why not seconds? The Hive chain has 3 second blocks iirc.

Thinking out of the box! I like it! Things are changing quickly in the crypto sphere and it is great that you have shared this information on how HIVE can get involved in decentralized finance (DEFI).

Yes it can

This is a great idea... why not it looks good for HIVE investors. Although I am a HIVE earner, not investor, but this is still another use case for HIVE!! ...good suggestion!!

Interesting idea but whats the roi on this?