Should a small-percentage immediate-power-down option be added to HIVE to increase baseline liquidity, to resist against pump-and-dump manipulations?

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Should a small-percentage immediate-power-down option be added to HIVE to increase baseline liquidity, to resist against pump-and-dump manipulations?


Although I am relatively new to Hive, I have affirmed the wisdom of the HIVE staking protocol, wherein holders must choose whether they want liquidity or influence with their HIVE tokens.

However, as I’ve watched the price of HIVE dramatically increase the past several days, a few relevant thoughts have occurred to me.

  • Whereas curation rewards (including rewards from auto-voting) are tied to staked tokens, there is a strong incentive for holders to keep pretty much all their HIVE holdings staked.
  • Whereas there is such a strong incentive for holders to keep their HIVE staked, the ratio of ‘liquid’ HIVE to ‘staked’ HIVE is likely to remain relatively small.
    • (I have been searching for historical data showing the above ratio, but cannot find it. If anyone can point me to those data, please put a link in the replies.)
  • If the ratio of ‘liquid’ HIVE to ‘staked’ HIVE remains relatively small, there is significant exposure to external ‘pump and dump’ manipulations.
  • This exposure could be dramatically diminished by simply allowing every account the ability to immediately power-down a certain relatively small percentage (e.g. 5%) of their staked HIVE.
    • There could be a limit on the frequency with which such immediate power-downs would be allowed (e.g. 30 days between successive immediate-power-downs).

The above change to the ‘power down’ requirements would allow wide-spread immediate temporary profit-taking by legitimate HIVE holders in the event an external ‘investor’ tries to temporarily pump up the price of HIVE.

I realize my above suggestion might be overly naïve. As such, I welcome comments and criticisms from those who have a longer history with Hive and steem and who might have additional insights to add.


Posted via proofofbrain.io



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(Edited)

The penalty for instant power down has been discused beffore and overall its a nice idea with the only risk of hacks and draining the account ...

The penalty can be burned or go to the powered up stakeholders.

Here is historical data on powered up hive
https://hive.blog/hive-167922/@dalz/hive-power-up-and-power-down-or-historical-data-of-hive-power-share

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(Edited)

Thanks!

Excellent info!

I didn’t think about the hacking vulnerability.

Perhaps let folks set their own delay, anywhere from immediate to 7 days.

And of course any changes to that timeframe would be subject to the same delay.

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Yes ... btw, Hive has an account recovery option, trugh a second account that users set as an recovery account ..., this is an amazing feauture for crypto and very understamated :)

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Yes, I was just reading a few days ago about the automated account-recovery system @arcange put together to make that process more robust (to eliminate the 'middleman' from the process).

Here's the post.

Pretty amazing what the folks in this community have done!

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I would say that I didn't remove the middleman but turn it into a middlebot 😉

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The contrast between Powered up Hive and liquid Hive is stark and so is Proof of Brain at the moment. Proof of Brain tokens will reach a point in the future that will make this gap tiny. You'd be able to leave leave unsteaked tokens with a much smaller opportunity loss because new tokens would be created at a very slow rate.

Although Hive will have strong incentives to keep normal users with little Hive which allows this situation you described, on Proof of Brain down the road this wont be able to happen. Now by "down the road" I mean liek 2033.

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Great post and idea and i love the discussions you have prompted below (especially paying a burn toll to cash out fast)

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