3 Steps of Hive Governance

Witness Votes

Hive is a governance token and as a benefit of building Hive Power, this gives us a voice in the governance of Hive and you can exercise this governance in a few ways. The first thing you can do is to vote for Hive Witnesses who run the Hive nodes and produce new blocks. Each person gets 30 witness votes and you can vote for them. The strength of your vote is based on your available Hive Power, therefore, the more Hive you have powered up, the bigger your vote for that witness.

The rewards for running a Hive node are quite skewed to those in the top 20 witnesses and therefore it is the goal of many witnesses to be in the top 20 as that is where the money is so to say. Being in the top 20 pays around 10k Hive to a noderunner if my memory serves me rightly. Overall, witnesses were paid 3,3M Hive last year according to the latest figures by Dalz.

Where does the reward come from? It is coming from Hive inflation, so the transactions on Hive are not technically free, they are paid for by all Hive Power holders. However, they perform an important function and it makes sense to reward people who keep Hive running well. They have server costs to cover after all and it is some important work for the blockchain. The inflation part paid to witnesses is however small in comparison to the overall inflation.

I am not usually voting too much in the top20 as my vote would not make too much difference there, but I do consider to vote around the witness 20 mark as there is all to play for there and my HP could make a little difference here.

Some things that I consider are the reputation of the witness, the stability of the node, their technical knowledge, do they grow their account, do they upvote comments, HBD% and maybe how are some of the projects they are involved in working.

Other than that, there could be many smaller up and coming witnesses who are working hard and could do with your support and I usually like to look out for them and give them a vote because this helps with decentralisation of Hive. Governance is very important and it is therefore important to exercise your vote if you want to inact positive change on Hive.

DHF Proposals

The second way to exercise governance on Hive is by upvoting (or not) DAO proposals. This is where the Hive Decentralised Hive Fund would then support projects that help the Hive eco-system. Here you can look through any projects that you think deserve some support and exercise your vote. When considering to support a proposal, I am considering the reputation of the team, their track record and if this benefits the Hive community in some way.

Currently, at the time of writing, the DHF is paying out 16 886 HBD per day or 500 980 HBD per month! That equates to just over 6 million per year! 6 071 760 to be precise! You might ask where does the money come from? It is coming again from all Hive Power holders through inflation and usually this 17k HBD is converted each day to Hive and sold. Therefore, it is important to be sure about supporting a project before you vote on it. Along with the HBD%, this has a negative effect on the value of Hive unless the project really does bring value to Hive and is important infrastructure.

To see the overall impact the DAO is currently having on Hive token holders, the daily Hive inflation should be around 70k Hive according to the figures by Dalz, and 17k HBD in proposals works out at 47k Hive sold each day at todays prices to support these projects. This is more than half the expected Hive daily inflation. If we compare the performance of the Hive DAO to say a similar project paying $500k per month, OpenSATS, there they are supporting 21 Dapps with just 40% of those funds. Hive is currently focused more on marketing than developing at the moment, so we have less Dapps supported.

Delegation

The third way to exercise your governance on Hive is to actually upvote and curate good content on Hive and reward people for their effort. This will then help attract people to Hive and they would want to stick around. Delegating too much of your Hive then means Hive becomes more centralised and just a few people decide what is good content or not.

The great thing about Hive is that it is decentralised and the choice is yours. Each person can decide how much they want to be involved in the governance and things like curation.

Closing Words

The important thing to having good governance on Hive is that it affects the reputation of Hive and this in turn motivates whether people would like to come to Hive or not. If we support witnesses and influencers who do not do the best for Hive or corrupt DHF proposals, people can see this, if not through the grapevine, definetly through the price of Hive.

Do you take part in governance on Hive?

Credits:

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