By now you heard about 3Speak's plans with their new project of expanding the network and decentralizing video storage. It is a bold move that stands to alter how video content is handled.
In this post, I am not going into the a lot of the details of the project. For those who missed it, you can read the post here.
Instead, I want to focus upon the tokeneconomis and the impact that is going to have. It is a rather interesting model, one that is worthy of delving into. By design, I presume, this stands to greatly benefit Hive and its token.
At the core of this is the Service Infrastructure Pool or SIP. This essentially is a fund that is in place to create long term value.
All activities that take place on the new network will feed into the SIP. It matters not what the action is, all proceeds find their way into it.
The thing about the SIP is that it is permanent. What goes in does not come out. The principle is there to to grow over time. All payouts to stakeholders come from the fees generated.
One way to look at the SIP is as a liquidity pool. It is there for people to trade the tokens against each other. The 3 tokens will be SPEAK, BROCA, and HIVE. Obviously, HIVE is the on and off ramp since the other two are platform tokens.
All funds generated through trading, video uploading (GAS), and advertising go into the SIP. The breakdown is summarized as follows from the article linked above.
However, before the SPEAK gets into the SIP, it is chopped three ways to SPEAK, some burned to mint BROCA, and the rest sold to buy HIVE. The SPEAK/HIVE/BROCA are then sent to the SIP and locked permanently.
This is akin to a burn without actually burning any tokens. Instead, the tokens are locked up and used to generate fees via trading/exchange.
How Does This Help HIVE?
The SIP becomes a simple supply issue. As the network grows, activity increases. Thus, the success of this project aids in the success of Hive. This includes the token itself.
Let us use a simple example.
Presume for a moment there are $90 in advertising fees. It won't be in USD since that currency is not part of the DEX but the point still holds. This is broken up 3 ways: 1/3 is in SPEAK, 1/3 mints BROCA, 1/3 buys HIVE.
Effectively, we see $30 of each token. All of this is sent to the SIP. At the present price of HIVE this amounts to around 260 HIVE being put into the SIP. It is now basically out of the circulating supply.
Obviously 260 HIVE is not going to change anything. However, what if, as opposed to $90 in advertising, the amount was $900...or $9,000? Now we are seeing the numbers jump.
The goal is to have the SIP filled with a lot of each token. Liquidity is sought. This is vital when swapping tokens. Non-liquidity leads to slippage which affects people's ability to operate. A tight bid-ask price allows for people to get what they need instantly.
Also, the fact that each time anyone transacts, the proceeds are going into the SIP.
Therefore, when we think about it, payments come from a variety of sources.
If we want to consider the potential, think about how many uploads there are on YouTube. There are more than 500 hours of videos uploaded every minute, or 6,000 videos per minute if we use a 5 minute video as the average. Picture the fees generated if 1/100,000th of the volume is hit.
Ponder for a second all the exchange fees that are generated by the Uniswap network. Take all the tokens in liquidity pools and add the fees up. It is likely a rather large number. Again, take a slight percentage of the total.
Finally, consider all the money spent on digital advertising each in. In the United States, it is well over $100 billion. Factor in the other countries around the globe and we can see how this is a rather large number.
For a third time, take a minor sliver of that and what do you come up with?
All of this is adds to the SIP. Because of the ratio, HIVE is being bought using 1/3 the proceeds.
It is rather naive to think that this project is going to totally dominate the video content world immediately. However, it is not unrealistic to feel this is something that could grow into a rather large network. As more people tangent into the idea of Web 3.0, it only makes sense that a platform like this will hold appeal to some.
Ultimately, it all comes down to the success of the network. 3Speak itself covers a minor niche. Of course, it does not presently have the ability to promote the idea of decentralized video storage. Also, all uploading is done on 3Speak's network, through their site.
How will things change when one is able to use the network from one's own website? The means the network will truly be the back end of things. Of course, to use the network requires BROCA which must be acquired using HIVE (or SPEAK).
The key is active participation. Anyone is able to house videos. A follower of any content creator can become part of the project by providing decentralized video storage. Thus, the entire community can be part of the process. The third party is not Google or AWS but, rather, the fans of the video creator.
It is essentially moving the community from passive viewers to active participants. For this effort, people will potentially be rewarded with tokens for providing this service. Again, we will see this happening across the board.
From the tokeneconomics perspective, all of this adds to the financial aspect of the network. Each stage of the process that generates money is fed into the SIP.
As it pertains to the SIP, here is the goal (from the original article):
The goal is to have the most liquid dex for SPEAK/BROCA/HIVE on the market; high liquidity means little slippage, which is the crux of what most people use Cexes.
Simply put, to achieve this end, there will need to be millions of dollars locked up. Doing some simple math will lead us to understand how much HIVE can be eaten up and taken off the open market.
Over the next few years, if this project does become successful, it could tie up tens of millions of HIVE. It could become one of the largest HIVE sinks we found to date.
The potential is there. We will have to see what happens.
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