Filling Up The Proposal Fund Instead Of Draining It

The Hive proposal fund (DHF) has created some controversy. Without going to deeply into it, many feel we are not getting an adequate return for the monies that are being paid out. Instead, it is viewed that it is the personal ATM for some people, a way to bilk the system for their own gain.

Originally, the fund was designed using the ninja-mined stake to fund development. That was the idea when it was mined from the start, way back when. Of course, as most of us know, Steemit Inc never truly utilized it for that purpose and it ended up being used against the community in a hostile takeover.

When the fork created Hive, the proposal fund was filled using this stake. Thus, it is no longer in the hands of any one individual or group, eliminating an attack vector.

Self funding development is a terrific idea. It is a way to expand the ecosystem without becoming dependent upon venture capital money. This is a positive since VC money ultimately puts the investors at odds with the users. We saw this with the likes of Facebook and Twitter.

Nevertheless, all is not rosy in proposal land. The idea of it being an ATM is not what it was designed for. However, there is an interesting concept that was introduced by @klye in his proposal for Hive Loans.

I won't go into much of the details of the proposal. If interested, which I suggest, you can find it here.

There are a couple points worth noting.

The DHF funding (hopefully) received from this successful proposal offsets the cost deficit created through the hours of coding required to build an application of this undertaking, to the point where the work can be made completely public / open sourcing which unlocks a somewhat as of yet unimplemented methodology of automated lending and escrow services allowing developers on the HIVE platform in the future to access to the underlying architecture.

This is all done in hopes that future developers given access to new ways of designing application architecture are able to come up with even more exotic and innovative blockchain level applications.

Here we see something that is important. This will end up being open-sourced so other developers can use the architecture to build upon and implement into their services. Proposals that are funded should benefit the entire community going forward, not just a small group.

The second point carries even more weight (bold mine):

The completed Hive.Loans v1.0.0 codebase goes into service and goes on to become a staple in the ecosystem, forwarding a sizeable percentage of it's future commissions earnings back towards the DHF in order to replenish the seed capital it was granted by the will of the HIVE stake holders.

As Mel Allen use to say, how about that?

Consider how powerful this concept is. Here is a proposal for development that can not only help the ecosystem by providing some DeFi services yet it also will allow for the covering of the costs.

Of course, we can go one step further to see how this can be a revenue stream ongoing for the proposal fund. A successful app could have a portion of the fees heading back there eternally. This will help to keep the money flowing in an effort to keep growing the ecosystem.

Instead of the fund being one-way, with money flowing out, it can be circular in nature. Projects that receive money decide to provide a certain percentage back to keep replenishing the monies that exited. Obviously, not everything can follow this such as blockchain coding. Nevertheless, many that are going on the second layer, especially those expected to generate revenue, can definitely go this route.

Ultimately, the proposal fund turns into a community owned venture capitalist. It essentially funds projects while looking for a return. There will be many instances where money is lost; that is life in the VC world. However, when a project is a wild success, it can generate a lot of revenue for the DHF, more than compensating for what is paid out.

This will ensure that Hive is able to keep funding projects for years into the future.

Essentially, the fund, and in turn the community, are becoming partners in the application. In return for the seed money, the fund gets a certain percentage of the revenues. This takes the concept of community owned to a new level.

Certainly if one went the private funding route, this would be a requirement. Anyone putting up money would want a piece of the action. Yet this is not what we see with the proposal fund.

As opposed to the VC concept, the fund is now more like the government. It just pays money out with nothing coming back. People take what they are approved for without any obligation back to the fund (and community).

Not according to @klye. This is the response in relation to a comment left by @blocktrades.

hiveloans.png

He certainly has the right idea. A "partnership" between the community and himself since the fund (community) helped to start it.

The model looks like this:

  • pay for development
  • application generates revenue
  • feed portion of revenue back to fund
  • rinse and repeat

We have seen the success of DeFi on Ethereum. Thus, this could be an application that has a great deal of success for Hive. If that is the case, the concept expressed by Klye could generate a significant revenue stream for the DAO going forward.

For this reason alone I support it. We need to start thinking in this direction.

Long term, self sustainability needs to be the key. Perhaps this is a proposal that gets the ball rolling.


If you found this article informative, please give an upvote and rehive.

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To me is not even controversial, is totally biased at some point. I'll save the rest. I voted for that already for the one you mentioned a couple of days ago. Will come up with my own proposal, too. Best regards.

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pixresteemer_incognito_angel_mini.png
Bang, I did it again... I just rehived your post!
Week 43 of my contest just started...you can now check the winners of the previous week!
!BEER
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We have seen the success of DeFi on Ethereum. Thus, this could be an application that has a great deal of success for Hive.

if a project is a wild success, it can generate a lot of revenue for the DHF,

New ear Crypto finance (it can be decentralized or semi-decentralized) is working in a similar way. Actually, we are lucky to have a well-developed blockchain that enable us to operate unique platforms on it.
Hive can be small-cap ETH ^^

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Hive can be small-cap ETH ^^

I actually view it that way. With Smart Contract capability, we will mirror what Ethereum can do. It is exciting to think about the possibilities going forward.

It is just a matter of getting the development out there.

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Defi coming to Hive as well? I'm going to start selling tickets for the hype train :)

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Hive already had a bunch of DeFi. In fact, it was one of the originals before DeFi was even a term. DLease was one of the first "farming" based ideas out there.

We are going to see a lot. LeoFi will be built on top of Hive yet provide opportunities for individuals.

Also, we will likely see the ability to create liquidity pools on here also.

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I mean we got now DPOS based smart contracts now :P
With Hive free txs and now a powerful coding tool, DeFi on Hive can be built to be a good alt to Eth based ones.

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(Edited)

I do like proposal by kyle. Already supported it. We also need to look at another subject is many good projects aren't even funded or take too much time to fund. For example DLUX has 2 proposals, 1 is upcoming and the other one is on giong and it's only half to voting required to fund. Dlux is bringing another 2nd layer solution, DEFI to hive and VR as well. We have the fund and we should support such good projects. I don't know all that technicality but terms can be negotiated like some part of revenue goes back to DHF or anything that will benefit the ecosystem. So getting a proposal approved is also a more difficult, We have the fund and i believe we need to encourage good projects to take a step ahead and make them do faster developments, than a person working for years to build the thing.

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DLUX's proposals deserve more support in my opinion and should be funded. They are both open source which anyone can use.

This is vital. Unfortunately, the funding of proposals all comes down to stake. This is where the community needs to keep adding to theirs so their votes carry more weight.

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A system like Major stake holders meeting may be after 1 month or 3 month on proposals. So Take a presentation from the major proposals there and convince stake holders Why it is needed. Multiple 2nd layers, would only bring better things and more competition between them so It improves system a lot. Engine is there like 2 or more years but no competition. Now they are doing some nice updates , and having competition would only motivate them to do more.

& the thing is we have funds, people are already dumping so even if it doesn't bring out 100% as they say but still it's worth trying.

We need a syndicate/committee, comprising of Witnesses, major stake holders and community leaders, gathering once 3 months, and deciding on proposals which to fund and which to not. So A lot of proposals coming, we can initial screen them and have debate. Let the proposal sender give presentation. & then every major stake holder chose their votes, give their say why they voting or why not. This can make a system a lot smoother. Many proposals out there and many people don't even know about governance or they even don't knw about them. So having a syndicate and gathering stake holders at same stage to decide seems a good idea to me.

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Elaborate more the Gobvernance model is an important thing, I wound't say that is a priority now though, I agree with this:

. So having a syndicate and gathering stake holders at same stage to decide seems a good idea to me.

Could be a comitee with a 1 person 1 vote system, to give some voice and importance to minor stakeholders. More decentralization or better said control over witnesses and stakeholders will be always good, as anti abuse measure, could be also another way to avoid attack vectors to the blockchain.

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1 person 1 vote isn't that of an issue here, that can lead to multiple accounts and stuff like that. DPOS is better, the stake you own determines your vote. But having at least major stake holders meeting 2 times a year on governance and proposals seems good enough.

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(Edited)

True 1 person 1 vote can be manipulated, as the actual configuration of governance can be manipulated in favour of the big stakeholders, if the idea is to implement a system to control or at least a vigilance over DAO with another representation opposed to witnesses, the election system should be different, if the system is the same they probably would be benefited from it either way.

Anyways the idea to look for other ways of election to find a balance, is valuable imo.

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The Matrix-8 Solution offers a bottom up, multi-level governance system which fosters consensus. It utilises (just at blueprint stage at the moment though) an anonymous one person one vote in groups of 8 to obtain consensus for that group, who then elect a {temporary} delegate (not representative) to bring their accord for a next actionable step to a delegates meeting. A trusted reputation score for each anonymous user will in time take care of alt-accounts. Much more on that here:
https://peakd.com/hive-153630/@atma.love/trusted-reputation?ref=atma.love

Namaste

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I agree and am contributing as much as i can. Already have delegated and I'm going to increase my delegation.

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Now this is using common sense and how the fund should be used. generating an income from the development sit is involved with so it becomes an ongoing source for developers. This is smart and I personally like this concept and hope it goes through as who is going to object?

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Thanks for letting us know about this proposal! Reminded me to check them, haven't done that in a while.

I voted for it, I'd like to see this implemented, hopefully it will raise enough support to pass the return proposal.

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Instead, it is viewed that it is the personal ATM for some people, a way to bilk the system for their own gain.

I've heard that too.

This project sounds though as if it could be a game changer if it proves successful. I'm going to give it a chance and upvote its proposal.

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I saw your comment about it on markettalk yesterday and voted for it then.

I personally like the idea of turning this into a community effort. The loop of constant growing the projects community will become something incredibly powerful. Ensuring that proposal fund is sustainable long term is great idea.

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That is a great concept to give back once the output of the project is providing. And I think this is the way to do it otherwise is like burning money without any responsibility from the people getting it. With that I believe it would help more projects.

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I think the DAO needs an overhaul in order for it to truly be a net positive for the HIVE ecosystem and specifically, its price.

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