Hive Finance Really Starting To Take Off

We know that 2020 is the year for DeFi. The explosion on Ethereum is absolutely stunning. At present, there is somewhere around $14 billion locked in contract on that chain.

Since the world found out about this capability on Ethereum, things have really taken off.

Of course, this is really nothing new to people on Hive. The idea of getting rewarded for staking tokens is nothing new. We have seen it in varying degrees since the very beginning.

To start, simply by powering up HIVE, it is adjusted each moment for inflation. Thus, a part of the inflation pool is given to each account that has HP to offset some of the rate.

At the same time, many used @dlease in the past to get a return on the HP. This was a form of yield farming, long before they called it that, since token holders were seeking ways to improve their ROI.

The addition of Hive-Engine added an entirely new layer. We saw the ability to create tokens, many which followed the Proof-of-Brain model. This made sense since that is what most people knew.

Over the last couple years, we saw more addition in the experimentation field, much of it with great success.

@spinvest started as a investment club that utilized the powering up process to generate more value for the token. This led to both on chain and off chain investment which, over the past year and a half, has grown significantly in value.

We saw the addition of @brofund follow a similar pattern. Although a bit different in that it did not focus upon the base operations of Hive as much, it still was able to generate some nice HIVE rewards. At the same time, it did very well with its use of many of the Hive-Engine tokens, especially some miners.

Most recently, we saw a few other projects going live.

@lbi-token is a project that stands for Leo Backed Investments. This is modeled after SPInvest. In under 12 hours, more than 50,000 LEO was sent over, equating to more than $15,000 USD.

@nealmcspadden put together a token that is a loan-bond type program. People buy the token and receive an annual return of 15%. That is paid weekly.

Finally, we have the INDEX token. This is the first of its kind on Hive, at least to my knowledge. Like the name says, this is an index fund similar to any general index fund. In this instance, it is focusing upon Hive-Engine tokens. Each INDEX token is representative of a piece of the tokens that are acquired.

These are just some of the projects. There are likely more that are being overlooked so add them to the comment section.

Mentioning of these projects is not necessarily an endorsement of them. This article is meant for informational purposes only.

Source

All this is a big step forward. While the numbers certainly do not compare with what is taking place on Ethereum, it is vital that Hive start to create more wealth centers.

So far, the financial value on Hive lies in the native token. The wealth is centered in the hands of the HIVE holders. While this is a great start, it is a far cry from a resilient system.

If we view Hive as a virtual entity, we can see how the comparison fit.

The most resilient economies are those with many wealth centers. Take a country like the United States. There are large concentrations of wealth spread throughout, in many different areas. There are not just a couple places where this is found.

At the same time, the economy is more than one or two industries that drive it. Economies that are structured in this manner, such as Russia and Saudi Arabia with oil, find that when that sector enters a bear market, their entire economy is crushed.

Looking at the Hive economy, it is vital that people are being rewarded in many different manners. However, to receive tokens from a community that has little value does not do a great deal. This is why Leofinance is starting to help this process along. As the value of the platform grows, the token appears to be following.

This is not only providing individuals with more resources but it is also another wealth center on Hive. It is similar to the United States having New York City and then starting to grow Chicago.

These abovementioned products that are helping to form Hive finance could help this process further along. As returns are realized, the value of the projects keeps growing. This would benefit all who are involved in those projects.

We see a lot of discussion about the adding of smart contracts in addition to whether to bring out SMTs. While it is of benefit to pursue SMTs on the base layer, the secondary layer of a decentralized smart contract system is crucial.

True financial innovation is only just beginning. Smart contracts open the door to so many possibilities. However, to achieve that, trust is required. The individuals/teams behind the project mentioned have a following that has come to trust them over the last few years. Yet that trust does not extend outside of Hive.

Here is where smart contracts can pick up the slack. A decentralized layer will enable people to put up projects where the code provides the trust. Certainly, one has to be mindful of exit scams and things of that nature, yet at least in terms of the core trust, the contract is what provides it.

For now, people such as @raymondspeaks, @nealmcspadden, @silverstackeruk, and @jongolson have built up enough trust (and a track record) to introduce successful projects of this nature.