This post comes as HIVE reaches yet another all-time low. I did not want to write again because I cannot and will not make a new post every time we reach a new all-time low. Yesterday we reached one and I thought about writing, then I stopped because at this pace it would become spam. Today we touched it again, so here we are.
Yes, the whole market is ugly, alts are bleeding, but not every coin is printing all-time lows weekly while its stablecoin is so far off its peg. Some coins bounce when the market breathes, not us, we did not participate in yesterday's tiny bounce, quite the contrary we printed all time lows two days in a row. Hive has its own problems that cannot be hidden under “the market is bad”.
As I write this, CoinGecko shows HIVE is sitting around a 25 million dollar market cap. Steem, the chain we forked away from after a malicious takeover, is in almost the same market-cap neighborhood, both are around 25 million market cap, are they doing something right or are we doing something wrong?
HBDStats shows the HBD debt ratio close enough to the 30% line that pretending the haircut is some distant theoretical mechanism is irresponsible. Hive’s own HBD page explains that when the haircut activates, HBD stops printing normally and the $1 peg breaks by design. Actually it stops printing for mortals like us, for the DHF the printing keeps going very well.
We are so close to the haircut that we are most likely to reach it than not. We will reach the haircut. So here is the question I want witnesses, whales, DHF-funded teams, frontends and everyone who cares about Hive to answer: pretend the HBD haircut already happened. What would you do? I beg for an answer because I know you are reading this.
If the haircut happened tomorrow nobody would treat it like a normal market event. Witnesses would be asked why HBD savings was still paying a high yield. DHF proposals would be judged with fear. Frontends asking for hundreds of HBD per day would look different. Events, reimbursements, infrastructure, public goods, all of it would go through a much harsher filter. Normal people would feel the impact, others would stay financed and that would HURT MORALE.
So why wait for the line to be crossed before acting like the line matters? If the answer after the haircut would be to cut, pause, reduce, disclose, reroute, defend only the essentials and force every proposal through emergency scrutiny, then the responsible thing is to start doing that before the haircut. Else the haircut is not governance information, it is just punishment for holders after governance failed to react in time.
I am not saying HBD is UST nor that Hive is Terra. The mechanisms are different and the haircut exists to prevent infinite debt expansion. The human lesson from Terra/Luna still applies though.
Confidence can break faster than people expect when a stable asset, a high yield, reflexive backing and denial all sit in the same room. If our answer to being close to the haircut is “keep funding, keep printing, keep calm”, then what exactly did we learn from every failed crypto economy before us?
The official HBD page still displays 15% APR, while recent tracker-based discussion says some witnesses have already cut the rate down from the 15% era. Near the haircut HBD yield should be cut hard. Half is a signal and zero is a cleaner signal. Feel free to disagree.
Hive is not legally bankrupt. The chain works, blocks are produced, apps load, posts are published, witnesses sign and proposals pay all while people comment, vote, argue, build and onboard.
Technically, a lot still works.
Economically we look like a project acting as if it still has time while the market keeps saying that the time is gone. A currency that keeps reaching all-time lows has failed every buyer who bought and held. Every buyer who believed and held is underwater.
This is why the Steem comparison hurts. We had the community, the apps, the builders, the events, the governance upgrades, the DHF, all the social and technical layers, the culture, the moral arguments and the work. Steem has Justin Sun yet the market prices us the same.
That does not mean Hive and Steem are the same. That is the humiliation. If nothing had been built, the answer would be easy. The brutal part is that a lot was built, a lot was funded, a lot was maintained, a lot was defended, and still we are here. Did they do something right? I don't think so. Did we do something wrong? More than would fit in a post I think.
This is not just my panic. The discussion under my previous post, under 
What chagned my mind was the lackluster response from top holders, witnesses, frontends and DHF funded people and projects. Few talked about it when what we needed was publicly acknowledgedment. I am afraid some of them hope that the discussion will die out and we will stop bothering.
I removed my support from every DHF proposal I had supported and supported the return proposal instead. I think Ecency has tremendous value and I use it all the time, Keychain is the backbone of our web3, HiveFest is needed for morale, and infrastructure is key. Thinking otherwise would be stupid. I respect these people and projects, and I supported these proposals before because I believed they mattered.
The problem is that value and affordability are not the same thing. How many of us have seen a once in a lifetime opportunity and the wrong time? How many of us missed out.
A project can be valuable and unaffordable. A person can have contributed a lot and still be asking at the worst possible time. An event can be good for morale and still be wrong to fund while we are this close to the haircut. At this point, the question is not “is this valuable?” The question is “can Hive afford the pressure right now?”
RoelandP wrote the most honest pre-DHF proposal post I have ever seen with HiveFest XI and ChainCulture. He did not pretend the ask was small. He said around 45,000 HBD would be roughly 900,000 HIVE of sell-side weight at 5 cent HIVE, we are below 5 cent and dropping so it is over 900k now. He admitted past events struggled to convert into measurable business and even asked before filing instead of forcing the community to react after the proposal was already live. He discussed safeguards like sponsor repayment, sponsor-covered catering, reusing existing gear and multisig/milestone control and that deserves respect, the deepest respect, and I still think it should not be funded right now.
That hurts personally because HiveFest is in Spain, I live in Spain, and I wanted to go. I would personally benefit from the DHF making that possible. It would lift morale, bring outsiders, give people something to believe in for a few days and it is a tradition! But a good thing can still be unaffordable in the wrong moment. If the haircut happened tomorrow, we would all know this, and worse, DHF proposals would still be funded! I am asking us to know what we will do when we fall one inch before the line.
Ecency also deserves credit. In Open Source Does Not Mean Costless, they accepted that DHF is not free money, reduced the intended ask from 333 HBD/day to 250 HBD/day, and framed the tradeoff honestly. If community wants smaller DHF obligations projects become smaller, slower, more selective, more community run, or more dependent on outside revenue.
In the comments, the technical debate with 
Their spreadsheet at https://trust.ecency.com shows the costs, to me it is lean, could and should be leaner, but they did do a good job optimizing their infrastructure.
Still, I removed my support. Not because I think Ecency is worthless and as I described not because I think their infrastructure is bloated, but because if Hive is near emergency conditions, even useful and lean things must pass a STRICT emergency affordability test.
Keychain is a similar pain. They are aiming for self-sufficiency, swaps, multichain access and revenue outside Hive. That is the correct direction. I want Hive projects to move there. But if a plan requires large DHF funding first, near the haircut, at all-time lows, then the timing is the problem. It may be right strategically and wrong economically right now. Should have done it earlier but that is no scenario, if I had bought Bitcoin in 2010... See, not worth discussing the possible past right now. What matters is what we do now that we have reached this point.
The Hive DHF documentation says the DHF receives 10% of annual new supply and proposal support is stake-weighted. That means DHF money is not revenue, not profit, not customer income, not VC money, not external investment and not some magic pot sitting outside the economy. It is Hive creating claims on itself and asking the market to absorb them.
That does not make the DHF useless. In high liquidity, in a strong market, with real growth and real demand, the DHF can be powerful, still cash flow negative and inflationary, but powerful. Currently the default should be “do not fund unless this is essential or immediately reduces danger”, and even then, I risk siding with
This is why the “23M HBD” number is dangerous when people treat it like real available wealth while in reality it is a label. The real value is whatever liquidity exists when HBD has to become HIVE, BTC, USDT, EUR, USD, rent, servers, salaries or groceries. If funded teams have to sell to live, then the DHF is not just funding work. It is creating pressure that someone else has to absorb. The DHF does not have 23M dollars, even adjusted for the depeg it does not have 19M USD, based on market liquidity it may have at most 1 to 3M USD.
I want to mention a counter point, 
But we do not need to prove the DHF caused the fire to say we should stop adding anything flammable to the room.
The DHF may very possible have delayed our fall, it may very well have been the reason why we were more valuable than Steem for so long, but it also does not mean that it can not push us below them. We do not know, but we know for sure it is sell pressure and sell pressure pushes things down, that is undeniable.
I saw the argument that we need to keep investing to escape this pit. The best version of that came from 
Without hard cuts, “we need to invest” becomes the same sentence Hive has been repeating for years. We invested in development, frontends, events, infrastructure, marketing, tools, listings, outreach, public goods, experiments, things that shipped, things that disappeared, things that were useful and things that were vague. After all that, HIVE is still in the same market-cap neighborhood as Steem.
Investment is not magic, work is not magic, exchange listings are not magic, events are not magic, frontends are not magic and our best efforts may yield nothing. If they do not produce demand, revenue, retention or enough outside confidence to offset what they cost, then calling them investment does not make them investment it makes them spending, and price shows wer are spending and not investing. Where is the payoff? 1 year and 6 figures in the future? Again?
You do not start trying to grab a rope after you have already fallen off the cliff. The rope had to exist before. Right now we are grabbing branches as we slip and calling that strategy.
In the discussions I saw many versions of the same moral argument: teams work hard, teams are professional, teams cannot do everything for free, teams have servers, costs, families, responsibilities and years of contribution. I understand that. I am not mocking it, quite the contrary I respect it because I am a professional myself. I know work costs money and it pains me to work on side projects with no revenue too.
But “we work full time” is not a funding argument by itself when the chain is priced like a hobby economy. Actually, it is shooting yourself in the foot. If you bring a fucking panzer to an airsoft match you are in the wrong. "I work full time" in such a small and failing blockchain is like saying you are a professional basktball player... An adult professional basketball player in a kids tournament that is... The dissonance is painful.
Hive is around a 25 million dollar market cap chain. A chain at this size cannot pretend it has the payroll capacity of a serious professional ecosystem, whoever wants a full time position must earn it, not ask for it, get your income off inflation.
If a project is a business, it needs revenue. If someone wants a salary they need to generate profits. If a company needs funding they will go find venture capital in private markets. Only a traditional politician would demand to be paid by someone else's money through taxes.
This is also a moral issue. A lot of Hive users come from places where a few dollars matter. Latin America, Africa, Asia, poorer communities everywhere. Many people here are not rich investors playing governance as a hobby. If full-time teams, often in more expensive places, rich countries, are paid through inflation that later becomes market pressure, then we need to be honest about who absorbs that pressure. We are taing the poor and distributing to the rich, and the rich are arguing back when we complain about the taxes.
The buyer absorbs it. The holder absorbs it. The person who still believes absorbs it.
People buying HIVE with outside income, people earning and holding, and people earning and selling to live can all love Hive. It is not immoral to sell. I am not denying that. But they do not experience this crisis the same way. At all-time lows, pretending those incentives are identical is dishonest.
We have many classes of people in Hive, it is a class based ecosystem. Hive is failing because we take from the lower clases and give to the upper classes. I will stop this here before you call me a marxist.
I know that despite my monthly purchases and power ups my vote barely matters and that is also part of the point, all I have are my words. Hive is stake-weighted governance. If a few large stakeholders support a proposal, it can live, particularly one witness that particularly contribute to over 40% of the funding requirements. If they do not support it, it usually dies. The rest of us can post, argue, remove support, vote return, complain and feel morally clean, but the real responsibility sits where the stake sits.
It takes inhumane coordination to fund or defund anything without that one specific whale votes and if we can not get a few others in we are guaranteed to fail
That is not a conspiracy. That is the system.
But if that is the system, then the people with the stake need to stop hiding behind “the community decided” when the community is visibly worried and large accounts still decide most outcomes. We are not a democracy. We are DPoS. Fine. Then the people with power need to act like leaders when the economy is close to "the line".
I am not going to accuse top witnesses or old large holders of never buying, never risking, never investing or never caring. I do not know that, for all I know the have the best intentions and work their hardest and I do not want to make unfounded claims. Some large holders surely bought. Some took risks. Some built for years. Some kept the chain alive. Some probably lost more on paper than I will ever have.
But legacy stake and new buyer pain are not the same thing. Someone who accumulated early through old rewards, early inflation, witness income, founder-like positioning, almost ninja-mined tokens or years of pre-fork low-cost accumulation do not feel a fresh all-time low the same way as someone buying HIVE from wages today, despite the millionaire sum of their paper losses. If the system wants those new buyers to keep believing, the old power has to send a signal that it is not simply waiting for smaller holders to absorb the next cut.
Acting like the haircut already happened does not mean rage-burning everything blindly. It means emergency triage because prestige spending with no IMMEDIATE return should stop. Any proposal that can not make external income right now, cannot explain what it sells, what it keeps, what it cuts and what how they will replace the DHF funding should be paused or reduced until it can, because maybe in a fair haircut everything should be defunded and we can simulate that now.
Witnesses should cut HBD savings hard. If the live rate is already low then cut again. Half is a signal but zero is the strongest signal, feel free to disagree, that is why we have consensus algorithms.
Whales should support the return proposal or explain clearly why they will not, but they need to talk about it. I rarely see large whales justifying their votes.
Funded projects should voluntarily reduce, pause, delay or return funding where possible.
Projects should explain how much DHF income becomes sell pressure and whether they can route large sales in less destructive ways, I rarely see reports of DHF funded projects showing how much they sold, when, where and why.
If someone believes HIVE is absurdly undervalued, especially someone with power and income from Hive, then buying and powering up now would speak louder than another thread explaining why everything is fine. I just fear that large holders can't buy HIVE because they have lived off of HIVE for years. I am afraid our top holders do not have a "real job" and their job is Hive so they can't even buy any, it is us, mortals, who are tasked with buying and sustaining it all.
I am not asking to agree with me, but voice your disagreeements. Top witnesses, whales, DHF-funded teams, frontends, big holders: say something. Agree, disagree, call me dramatic, tell me why I am missing something, tell me I am a FUDster, but show that you understand people are worried. Comment, post, do anything.
Silence is the worst answer now because silence looks like malfeasance. Silence looks like “we are still getting paid, so this is not our emergency.” Maybe that is an unfair accusation. If it is unfair, prove it is unfair. Say something. Maybe I am offending you, if so tell me publicly what and why it offends you in particulr.
The stupid part is that I am still buying and powering up.
Matter of fact, I just bought 6100 HIVE
I am not doing it because the evidence says Hive governance works, on the contrary, the evidence is terrible right now. The chart says it does not work., the debt ratio says it does not work, the Steem comparison says it does not work. The fact that we are still debating normal funding this close to the haircut says it does not work.
So yes, at this point my belief in Hive is almost religious. I have no proof the system works, I have ample proofs it is failing. I have hope that it can still work if the people with power act before the mechanism forces them to act.
That hope needs a signal.
I will not keep buying blidnly forever, I am stupid but I am not dumb, at least I'd like to think I am not.
Do not wait for the haircut. Pretend it already happened. Decide what you would cut, what you would stop, what you would reduce, what you would defend, what you would buy, what you would burn, what you would disclose, what you would admit. And post, comment and talk about it so people know something is either being done or at least discussed.
Pretend it already happened and then answer the only question that matters:
why are you not doing it now?
