In Defense Of Hive

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(Edited)

We often talk about the defense of Hive. Security is obviously a major premise when dealing with blockchain. With all that is taking place online, we need to ensure that people can operate safely with the different applications.

There are other factors that determine the safety of the Hive ecosystem. As we saw with UST, something that is poorly designed can be fatal. For this reason, Hive has some safeguards in place regarding the base layer coins. For example, Hive Power has a 13 week unstaking. This is enormous along with being the source of great controversy. However, it is a very strong security mechanism in case one's account does gain unauthorized access.

Over the last few months we made a number of propositions. Interwoven in this are steps designed to defend Hive even further. In addition to coding, there are financial ways to protect Hive. It is something that is often overlooked in a world where "code is law". Nevertheless, this is where we can see layers of defense arising.

In this article we will discuss some of these concepts and how it all makes the base coins stronger. The goal is to make the entire ecosystem as resilient as possible. This means pushing the possible attack vectors further out, away from the core.

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Derivatives

We covered this in great detail so we will not have to explain it all.

Derivatives are widely misunderstood. What most remember is Warren Buffett's weapon of mass destruction statement. That said, we need to understand Buffett does a lot with derivatives.

The entire financial system is a process of transferring risk. We basically move it from people who do not want to those willing to take it on. This is the primary role of derivatives. They are used as a hedge, especially in the era of Value-at-Risk (VaR) balance sheets.

How does this apply to Hive?

The idea is to get the base coins, $HIVE and HBD, operating in different forms. This is where the concept of a wrapped token enters. When we start to design different versions of the coins along with generating utility, now we can see how the attack vector is moved further out.

For example, if bHBD has a deep liquidity pool, then we have accessibility. One that occurs, others can start to integrate use cases. If the token gains acceptance for payments, funding, or investing, the incentive exists to hold it. This is backed by HBD in a Hive wallet yet it is going to just sit there, not threatening the system.

It was one of the main premises of the Hive Financial Network. By creating a derivative of Hive's stablecoin that is the centerpiece of the system, the utility of HBD becomes clear. In this instance, it operates to create more of the derivative which is used within the financial network.

Sophistication

This is another area we discussed although we did not point it out directly. The concept of Hive Bonds is one that plays into this.

When we start added layers of financial sophistication, the resiliency of the currency explodes.

Again, using the bonding as an example, we can see how the layers simply mount.

The main idea is to have HBD placed in a time vault (say 1 year). This locks up the HBD, removing the threat to the ecosystem. At the same time, liquidity is provided by creating a bond (a NFT if you will) that can be traded. Already, as with the wrapped token, we have the HBD in another form. Then, we can move the bond to the state of collateral, placing it at the center of a lending platform.

The key here is to get the last feature built out. If there are millions daily in lending taking place, what does that do to HBD? Obviously, there is incentive for people to keep placing it in the time vaults.

It is a situation that can keep growing as more "exotic" financial layers are built. Another example could be creating interest rate swaps based upon the prices of the Hive bonds on the open market. If this is robust enough, we can see how market prices will emerge. Now we are tying another derivative to the system which only enhances the reach of HBD.

This is where defense comes in.

Building

We are at a crucial junction. Cryptocurrency excels at people trying to monkey around with tokenomics believing that will provide the answer. They turn to burns, deflation, and an assortment of other variables to try to make the coin or token appeal to others. They are stuck in the price go up mindset.

The true solution comes from building. As we can see from these few examples, there are many things that can be implemented to provide defense to Hive. It takes time and effort. This is obviously something Terra overlooked. They figured the correlation between LUNA and UST was enough. There was no defense such as the haircut rule.

We also did not see use cases for either coin. Other than trying to create a return, either through APR or speculation, what need did people have for either one?

We often discuss replacing the existing financial system yet few talk about actually building that out. What are people going to use? How are we going to meet the different needs of the crypto community if we do not create the infrastructure?

Fortunately, in doing this, we build the resiliency that defends Hive.

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

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looking happy to the future!

!LOLZ !MEME !PGM !hivebits !PIZZA !WINE !BEER

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Bang, I did it again... I just rehived your post!
Week 129 of my contest just started...you can now check the winners of the previous week!
!BEER
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(Edited)

Hi @taskmaster4450 I want to understand something and im sure you're the best to answer this question

How do we (hive users) help Hive to grow further?

I ask this because I know I will not be a developer like you guys so what can we do as a normal hive citizen?

!ALIVE

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I am not a developer either. The best way to get involved is to commit to Hive fully. Once you do that, you can start using the different applications as much as you. Whatever interests you, keep delving deeper into it.

At the same time, once you have an understanding of how things work, it is bes tto tryin to invite others. For example, LeoThreads is a simple use case for people. Being able to post twitter like posts is novel to Hive and something that most can do.

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I am not a developer either.

Oh I didn't know this I listen to your talks I think few weeks ago about hive gaming maybe splinterlands but didn't finish listening because I was working at the time I thought you are one of the developer In hive.

Whatever interests you, keep delving deeper into it.

If I and my friends who have joined Hive keep doing this you mean it's good for the development or price of hive will go even further?

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Users drive social media forward, which is the base layer of Hive. So the more users the better it is for the chain. Price won't matter much as long as we consistently obtain and maintain more active users.

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Ah I see thank you for the answer at least I know what I'm currently doing is good for hive bringing people in and try to teach them with whatever knowledge I currently have on hive.

Price won't matter much as long as we consistently obtain and maintain more active users.

I see priority is to maintain users price is second 🥈 then.

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Sorry for so many questions I want to find a way to help Hive grow further but I don't have much skills or knowledge on Blockchain or whatever hive is doing

still trying to understand how it works if I can help in anyway to help it grow I would love to do it eventhough I have limited time daily due to working in a restaurant with long hours.

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With few hours a day of your time, treat Hive like your business. Grow your stake in the community, showing up daily if possible goes a long way in helping Hive grow.

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Indeed a lot of security is added when derivatives are employed. As accurately said, liquidity is the back bone of every token use case. Most markets don't have good liquidity and I saw it at play yesterday when I tried to mint my Runi nft on opensea. But then everything starts from somewhere. Do you think bringing derivatives in place will increase our liquidity or spread it out to become so thin?

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(Edited)
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(Edited)

Hive security is standout and one of the reasons I'm so confident about this community, I know we still have a lot to build but it a gradual process.

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The HIVE, HBD relationship is so reassuring, we are seeing how the blockchain is tagging along despite the year-long state of the market that has sent some cryptocurrencies crashing.

I am less of a fan of burning tokens, why not put it to use like sending it to a DAO for development purposes? There are a lot of things in place on Hive to be happy for when compared to what is out there. We just have to keep strengthening it.

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Burns are a very interesting subject. It depends upon the situation. At base layer, burns are, in my view, a bad idea. On the second layer, some can take place since a lot of times the tokenomics are insane.

So basically you have to take it case by case.

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It is impressive to see how the security of Hive has increased over the years. With the initial hardfork and then the things that have been implemented since then. I mean I thought it was pretty secure before, but now, it is just even crazy better. And we aren't even done yet!

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That is security that comes from coding and yes that is jumping a great deal. Kudos to the devs on that.

As for the other areas, we can build defense by financial products that insulate HBD and act as foot soldiers out in the wild.

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I like that phrase "insulate HBD".

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(Edited)

Waiting too see hive in the futures market of binance, it’s already on gates.I’m it’s just a matter of time before it spreads too other exchanges

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So, in your opinion people holding HBD should invest in the liquidity pools on Cubfinance and Polycub, because these derivatives protect Hive?

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I didnt say people should invest anything anywhere. I am not here to tell people what to do with their money. That is up to them.

What I was pointing out is that the LP on the other chains provide a defense barrier for HBD. Whether those LPs are worth it to people is up to them. However, an attack on pHBD is not the same as one on HBD.

And if you follow the idea of the Hive Financial Network, you see how other derivatives built on top end up creating more layers of defense.

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I see.
Is it accurate to say:
If someone invests in bHBD on Cubfinance, as a derivative of HBD, this investment creates liquidity for HBD off of Hive, in the form of this liquidity pool, allowing the buying and selling of HBD, and protects Hive from an attack vector focused on Hive?

Plus this investment could provide a yield greater then that available on Hive, albeit at potentially increased risk of a hack?

So increase the security of the Hive Financial Network with this investment, and increase your earnings on HBD, versus staking HBD in your wallet, at some increased risk?

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We need privacy, lots of liquidity pools, and DEXs One or two people are doing this and other great things, but like you say: We need to Step-Up, the Hive community and Witnesses need to wake up.

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It is necessary and interesting to find and read articles like this one, which generates a good confidence to the Hive.blog blockchain. When I read that all these IT processes are important for the care and maintenance of the platform, always taking care of the security it possesses and demonstrates, I felt a great relief to know that our investment (although very small) is always backed by these laudable security systems.
A few days ago I read another article which states that we (users) are "shareholders" with our HP, and we can use it as capital for savings and investment; although it also specified that everyone is the owner of their "shares". But knowing that we are getting further and further away from the threats of infringing vectors, it is a position of relief to continue trading with the $Hive and HBD, no matter that they are a "wrapped token" concept, generating other versions of cryptocurrencies. The security and ability to save (Hive) returns for those who had lost it... Knowing how to "save" HBDs and use liquid tokens that can be traded, we move towards an excellent economic position by passing such a token to that collateral status you mention, to then invest it in such a lending platform.
From derivatives, sophistication, and all the way to the construction of Hive.blog, the confidence and security deposited to continue offering a vote of hope in the openness of the ecosystem, to continue building resistance by defending Hive, is rising.
Meritorious salute to @taskmaster4450

Es necesario e interesante encontrar y leer artículos como éste, que genera una buena confianza a la blockchain de Hive.blog. Cuando leí que todos estos procesos informáticos son importantes para el cuidado y mantenimiento de la plataforma, cuidando siempre de la seguridad que posee y lo demuestra, sentí un gran alivio de saber que nuestra inversión (aunque muy pequeña) está siempre respaldada por estos loables sistemas de seguridad.
Hace unos días he leído otro artículo el cual plantea que somos (usuarios) “accionistas” con nuestro HP, y la podemos usar como capital para el ahorro y la inversión; aunque también especificaba que cada quién es dueño de sus “acciones”. Pero saber que cada vez se está más lejos de las amenazas de los vectores infractores, es una posición de alivio para continuar negociando con el $Hive y HBD, sin importar que sean un concepto de “token envuelto”, generando otras versiones de criptomonedas. La seguridad y capacidad de ahorro (Hive) vuelve para quienes la habían perdido… El saber “guardar” los HBD y utilizar bonos líquidos que pueden ser negociados, avanzamos hacia una excelente posición económica pasando dicho bono a ese estado de garantía que usted menciona, para luego invertirlo en dicha plataforma de préstamos.
Desde los derivados, la sofisticación, y hasta llegar a la construcción de Hive.blog, se va elevando la confianza y seguridad depositada para seguir ofreciendo un voto de esperanza en la franqueza del ecosistema, para continuar construyendo la resistencia defendiendo a Hive.
Meritorio saludo para @taskmaster4450

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It is good you alluded to the ownership mindset. We all do have a stake in Hive based upon our holdings. I wouldnt call it shares because there are no rights conveyed in similar to stock. There is, however, governance tied to that which gives people a say in the witnesses and proposals.

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Thank you for your reply

Agradecido por su respuesta

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A unique fact I enjoy about the Hive blockchain is You are primarily responsible for the security of your account on Hive. So if you take appropriate responsibility then it's even more secure than your Facebook account or your bank.

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Yes that is true. There is also the account recovery system in place.

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yeah right ! That is such a unique feature of this decentralized blockchain.

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Contributive engagement will help hive to grow beyond bond

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(Edited)

Hola @taskmaster4450
Construir una resistencia para apoyar el Hive, desde mi punto de vista y a pesar de ser una usuaria que no posee una enorme inversión en la cadena de bloques, no se hace tan difícil aceptar la proposición. Hive.blog, sus criptomonedas, comunidades y todo ese ecosistema representa un espacio de trabajo para la creatividad, para desarrollar artículos originales y de buena calidad que enrriquecen el conocimiento a la par de su contribución en la generación de tokens y la fluidez de todas esas criptomonedas que se basan en el Hive. La seguridad es muy importante para esta plataforma y, nosotros los usuarios, cumplimos un papel importante en el crecimiento y progreso de todo lo relacionado con: Derivatives, Sophistication y Building. Algunos usuarios no entendemos casi nada de economia y de todas esas interacciones e inversiones, pero poco a poco le damos vida al ecosistema: cada quién expone su proceso de avanzar con la plataforma. Por ejemplo yo: soy creadora de contenido, busco exponer temas innovadores cuidando siempre su presentación para que sean impecables ante la gama de curadores exigentes, hago comentarios, votaciones y rebloguear artículos interesantes. Así es mi apoyo para Hive, pequeño pero contribuyente en la defensa de sus intereses que también son los nuestros a nivel de usuario.

Hi @taskmaster4450
Building a resistance to support Hive, from my point of view and despite being a user who doesn't have a huge investment in the blockchain, it doesn't become that difficult to accept the proposition. Hive.blog, its cryptocurrencies, communities and all that ecosystem represents a working space for creativity, to develop original and good quality articles that enrich knowledge on par with its contribution in the generation of tokens and the fluidity of all those cryptocurrencies that are based on the Hive. Security is very important for this platform and we, the users, play an important role in the growth and progress of everything related to: Derivatives, Sophistication and Building. Some of us users understand almost nothing about economics and all these interactions and investments, but little by little we give life to the ecosystem: each one exposes his process of advancing with the platform. For example me: I am a content creator, I seek to expose innovative topics always taking care of their presentation so that they are impeccable to the range of demanding curators, I comment, vote and reblog interesting articles. This is my support for Hive, small but contributing to the defense of their interests, which are also ours at user level.

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So the interest rates of the bonds would vary according to the price of the bonds on the market? It would follow along the relationship between bonds and interest rates currently in the US.

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They turn to burns, deflation, and an assortment of other variables to try to make the coin or token appeal to others. They are stuck in the price go up mindset.

I think everyone wants the price of their favorite crypto to go up, unless it's a stablecoin. That being said, it won't stay up without a solid use case.

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Why HBD does not have stablecoin pairing (neither in a centralized platform nor in Hive Engine), that is what we need. With 30% upper cap limit, more HBD will be printed, it will certainly enhance the supply, but why we are not being able to offer a HBD-stablecoin pairing? Just curious to know

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