Reducing the mass extraction of Hive!
Power downs
In the last months I've seen a clear and worrying trend on Hive. It is a structural pattern that we can see in the weekly reports from @hivetoday. Every week there is more power down than power up. A lot of this Hive ends up leaving wallets via exchange accounts. When there is a lot of supply and not less demand, the price goes down. And this is what we see happening for a long time.
I don't say this is the only reason for the low price of Hive, but it surely is one of the reasons.
Extraction of Hive
I mentioned above that a lot of Hive rewards from users are leaving Hive through exchange accounts. This is something I've looked into recently. I've made my own tool to give an insight in the Hive being sent from specific accounts. This tool was implemented into the Hiveraven tool (https://hiveraven.vercel.app/health) by @gwajnberg
Another tool that shows this is the flow visualizer from @forkyishere (https://hive-flow-visualizer--forkyishere.replit.app/). It shows the same picture. Large amounts Hive moving to exchanges.
Why should we care?
Hive is a social chain. The value of the chain depends on the strength of the community. When many users treat Hive only as a place to take rewards out the token and the entire chain becomes weaker. Less stake means less voting power. Less voting power means less support for creators. Less support means less creators. It could slowly kill the platform.
And yes, I know everyone can do with their rewards what they want. It's the rewards they earned themselves... And yes, I know some people desperately need to extract some Hive to pay for their expenses, sick family members, or have other good reasons to extract rewards. But this surely is not the case for everyone that is mass extracting Hive at the moment.
What can we do about it?
We can't do anything about the extraction of Hive by itself. Every Hiver decides what he or she does with the rewards they earn. But what we can influence is who receives rewards. We are the ones upvoting posts that decide which ones get the most rewards. I really think we should be paying more attention who we are giving our upvotes.
If more people stop upvoting people that mostly extract hive, the amount of Hive being extracted will go down. This will result in less Hive on the exchanges, which should have a positive impact on the price.
Ok, but how to do this?
There are several ways to check the accounts of the people you upvote frequently. When you frequently check your following feed for curation, it might be a good thing to take a closer look at the accounts that are on that list.
Here are some things you can check:
KE
When you go to a users profile page in PeakD, it shows a value called KE.
If I'm correct, the KE figure is the total amount of earned rewards divided by the current amount of staked Hive in someone's wallet. A KE of 1 means that the Hiver has exactly the amount earned rewards in their wallet. My KE of 0.51 shows I have more Hive in my wallet than I earned on Hive.
The higher the number, the more Hive rewards have been moved from the account.
A KE of 10 means the user has extracted 10 times the amount they have in their wallet.
A very high KE shows someone has been extracting a lot of Hive, so it might be interesting to look further into.
HiveRaven account health
I already mentioned the HiveRaven (https://hiveraven.vercel.app/health) tool before. With this tool you can lookup a lot of stats from any account including the aforementioned KE, but also comments and outgoing transfers.
In the following screenshot you see an account that has a huge KE, so has extracted loads of Hive and it had made no comments in the past 7 days.
This account hasn't done any extraction in the past 30 days, but did extract a lot in the past (and probably will extract more in the future).
When the user did extract Hive in the past 30 days, a list of outgoing transfers with recipients is shown under the dashboard. It shows the amount, recipient and if it's an exchange or swap service.
You can also check the incoming Hive on these exchanges (like orinoco) to see who else is sending large amounts of Hive to this account.
You might be shocked when you see the amount of Hive being extracted from there.
Curation services
A large part of all Hive rewards is distributed by big stakeholders and curation services. Their votes shape the platform more than any single user can. Because of this large influence it would help a lot if these services also keep an eye on extraction behavior.
But I also understand that this is not easy. Checking accounts takes time and how do you keep track of it? I experience the same issue as a curator for my own Topcomment curation project.
And I don't have an 'out of the box' solution for it. Maybe some representatives of curation services like could join the discussion to find a solution for this problem (if they agree this is a problem 😉).
I did suggest before that adding some stats next to the username in the feeds would help. Now it's only the reputation, which we probable all agree, doesn't say much. If we could see the KE or something that shows if someone extracted a lot of Hive, that would really make curation easier.
But one of the responses was that it would make the front-end very slow.
But if anyone has any other ideas, please share them in the comments.
Questions for the community
I've been thinking about creating this blog for a long time, because I really think we as a community should act to supporting the people that are here for the community.
I think it is good to open the discussion on how to combat this problem. That is if we think this is a problem.
That's why I want to open the discussion in the comments.
Here are some questions....
Do you also see the large extraction of Hive as a problem too?
How do you deal with accounts that extract a lot of Hive?
After reading this blog, would you put effort into limiting extraction?
What else can we do as a community to reduce down the extraction of Hive?
It might be a nice point to discuss in one of the upcoming @hivethrive shows.
When you have come this far, thanks for reading.
I hope you will share your thoughts in the comments.
And if you want this subject to get more attention too; reblogging helps creating visibility 😉
All see only the autours side, but if the witnesses are the principal extractors, won't be better to spot this? Only the top 100 autours get almost the 50% or more rewards. And the big curations projects are the facilitators for this priority class of users.
Do you really think the problem are users than extract 5 or 10 dollars per month?
I wonder how @gwajnberg can afford the witness cost of running a node without getting the big rewards of the 20 principals witnesses...
Maybe you're fine with your focus on the little extractors, but who cares about the biggest extractors and the DHF founds extractors
running a witness isn't that expensive , or atleast it doesn't need to be expansive i have 2 witnesses runing at home , on servers that where already operational so no extra costs.
That is my point, why support whiteness that are hard extracting value, and why only people blame the little users. I used to be a 100% power up user, but never got support from biggest curations projects, so I guess there are hidden reasons to be supported. Why only a top 20 authors got almost all the rewards?
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Not everyone uses their main account for witness production. Not everything is black and white.
I'm not talking about authors, I'm talking about Hive accounts. I agree that witness accounts shouldn't be extracting all they earn too. They do have to cover some expenses, but that's not all they earn.
If there are witnesses profiting from Hive and extracting all rewards, you could withdraw your support.
The power is in the numbers. There are really a lot of accounts extracting. Some of them only extract 5 or 10 dollar a month, some of them extract quite a lot.
That is money that doesn't stay on the chain. If 'we' keep doing this, there is nothing to extract anymore soon. It is already drying up.
It's not that people can't withdraw any rewards every now and then. Only some accounts just withdraw everything. And a few of them don't even interact and just receive (automatic) upvotes because they have been on Hive for a long time and/or have some autovotes.
It seems to be the major problem with Hive as a whole: too many 'auto-curations' and 'extractions'. I wonder whether we should focus on finding a solution to those obvious problems or look more deeply at the main issues causing them in the first place. One of the major issues is user retention; many will come and quickly seek to extract. How can we keep them here longer term and help build a stronger base?
Sorry I couldn't be of much help in the way of more obvious solutions; I like your commentrewarder curation efforts, helping foster a positive experience for those putting the effort into making Hive better overall.
I'll be keeping an eye on this post to see the opinions of some better-equipped resolution givers.
I think the issues are related. User retention could improve when people change their voting patterns and start upvoting some other users.
You've said it right: "what we can influence is who receives rewards".
My routine now changed and whenever I'm upvoting articles I tend to take a look also on the KE ratio and adapt my support accordingly. If we want this ecosystem to be healthy for us, we also need to take care how we "spread the love". 😀
I think that, even though the impact isn't that big, that does help. Every little thing helps.
The data you showed for sure I suspected that it was true for a while! i just checked the exchange that you mentioned; it is crazy, right?
I suggest education, or rather re-education, for both users who are active in recent times and veterans who have been here on Hive for years. Something tells me that so much extraction and power-down of many different accounts signifies a cessation of activity in a dormant ecosystem with so much potential that the vast majority of its community members He does NOT know: Hive.
There are still many active projects, there are curators who help new people or people who have been trying to progress unsuccessfully on Hive for years. There are methods and tools that can help creators, there are spaces that serve to help you get to know others and to make yourself known. There are people who provide services that replace the need to extract all your HP data to pay for a certain need or emergency you may have.
The main problem with all of this is that the vast majority know nothing about it, whether it really exists, whether it is still active, nothing. I know people who still think we're in 2021, making the same posts they did long before Hive was Hive. New people come in, don't receive the necessary help or guidance, get frustrated with so many things to learn and take into account to publish something like this, and leave.
Real-time education is needed, not only to help newcomers and those who haven't heard about Hive's new features in a long time. But also to help all those projects, communities, and small accounts that provide services and help others and that go unnoticed because they are not part of a "Top 10" or a "Top 20" or simply because they don't have thousands and thousands of dollars in HP in their accounts.
Apart from all the advice and recommendations you give here, I believe this is also necessary, because no matter how much one talks, does, believes, or argues with the same people as always, We're not going to get any further than where we already are. We need to do more and see beyond what we're used to seeing.
Good work.
Education is certainly a thing too. It's kind of hard to understand all the ins and outs of Hive.
I've been checking new onboarders lately and there are quite some users that welcome newcomers and give them links with more info about Hive.
But I also noticed that a large group has discovered Hive by promoters that advertise Hive as a platform to make easy money.
Well, that's one of the main points to address: the promotion of the Hive Blockchain itself. If you're referring to the creators who have talked about Hive on social media like YouTube (which they haven't done for years, but the videos are still there with thousands and thousands of views), then it's more It's obvious that all those people starting out in Hive do so with a very mistaken idea of the ecosystem, and that's why these Power Downs happen.
The solution? Active and committed creators talking about Hive on social media, showcasing all the real and 100% UP-TO-DATE information about Hive and its entire ecosystem. But it's not enough for an account to have the name Hive and Your YouTube profile logo with 100 subscribers, make one video a month and that's it, no. They have to be the same creators who are active on Hive, sharing and who are aware of the updates, changes, and new features that this ecosystem has.
Simply welcoming the occasional new user to Hive each week and sharing outdated tutorials and guides in the comments that are over six years old and haven't been updated is not enough. Sometimes you have to offer something more, something more worthy of a social ecosystem like Hive. Courses, guides updated in real time, tutorials on how to use PeakD, Encency, InLeo, etc., all in real time with each new user who joins, etc.
I understand that not everyone can or wants to teach and guide new people to get started on Hive, and many projects that were active before are no longer active due to the lack of support they receive. The isolation and fragmentation that exists in this ecosystem also limits newcomers and smaller players from being able to do something good for the vast majority.
With my KE 0.67 I think I'm on the right track with Hive support, with manual voting all the time.
The question is how often curators who have automatic voting set up actually check the authors whose posts they are voting for...
👍
Good question too!
On peakd, in some of the feeds, you can hover over the profile pic and get the profile card to popup.
That has the ke ratio.
I've asked that it be added to the comment feed and was told it will be in a future upgrade.
I've been beating this drum for a long time, glad more people are finally admitting that extraction is a problem.
That's nice.
It would be nice to have some figures about extraction on there too!
A very necessary debate on Hive's economy. Finding a balance between withdrawing out of need and strengthening the ecosystem is key.
A balance would be good. Now the scale is out of balance indeed.
BTW my KE is about 3, I'm a mega extractor! Put me in the blacklist!
Glad I learned something from your post and I activated my KE ratio.
Supply and demand have a lot to do with Hive.
I hope to accumulate as much as I can lately.
#focus
Why do people not see value in HIVE (both platform and token) and how can we change this? Censorship resistance and content ownership should matter. Curation power should matter. Community should matter. We need to find a way to reach people who will see that value, but I'm at a loss when it comes to suggesting how.
Extraction isn't always bad, what is bad however is extraction for close to no effort put into the rewards. I had to downvote a returning extractor recently who simply posts twice per day very short clips of things they also post everywhere else. Doesn't engage, doesn't attempt to link back to Hive anywhere else yet Hive is the main source of income for them due to autovotes so they don't bother to be a value-add to the community.
I was called a dictator even though I only adjusted 50-60% of the rewards down on the overrewarded posts (in terms of hive, not $ of course).
I think we should put more pressure on stakeholders to check what they're voting on and if they don't respond/care then downvotes adjusting the rewards down should be made more normal without drama involved. Just because we can see who's doing the downvotes doesn't mean we need to call them dictators and that they wanna kill Hive when they're merely spending time trying to protect the reward pool for no gain.
Best is of course if the curators agree that they may be getting overrewarded. Some favoritism is okay but if you overdo it and constantly keep rewarding extractors that bring little back to the ecosystem you create entitlement and stigmatize those trying to protect the pool.
There's plenty of other things you can vote on that aren't a negative on hive if you feel like there's too few authors to vote on so you justify it that way to overreward the few that bring little value to the ecosystem. Or simply focus on rewrding those active with a track record that they're trying to bring value to Hive over time.
I had a user in my autovote in the past who was mostly running into the automatic and had no engagement in the blockchain. It is said because it was a user that I really appreciated the texts from when I joined. But it is like you said: sometimes we want to help and think that this user is promising, but the years pass, and the user stagnates; let's say.
Downvotes are always associated with drama! And I know that there are medium/big stakeholders who are still against it. I hate to debate, but it is here to be used, right? But one thing that you said in a comment is true, and it can fit in any place in this discussion. Nothing is white and black. And probably one person that I really deserve to be ignored m, maybe in your point of view, deserves a vote and vice versa.
Maybe the main and important thing to think about is to see people who care about the community; even in projects that somehow failed, they can't be forgotten. That's why, in those debates about DHF on Discord, I try to be neutral, even if some projects I really was against since the beginning because I didn't see any sense; I know that people behind them at least are trying to make the community better.
Yeah I've been against most of the things being funded over the years, mainly seemed like some just taking because they can and enriching themselves with very little progress or spending the funds to bring attention to the project/ecosystem. That's why I never made a proposal cause I felt like when I do I wanna make sure it gets put to good use - until I had to due to development costs and debt we got into with Holozing. Now things are cheaper to develop so I kinda feel like the DHF isn't going to be abused as much just because they are devs who can create something, they're going to need to be really unique and promising and crucial to the ecosystem to get funded since everyone and their mom's can develop things now.
I think extraction is always bad for Hive, though extraction doesn't immediately make you a bad person. If someone extracts some Hive, but also grows their account for me it's different than someone that extracts everything.
I think we should have a discussion with stakeholders, big and small, about who we upvote. Downvotes always cause drama and I think not many people are willing to risk their account downvoting a large stakeholder. I'm not.
People could upvote some more new authors (that would help user retention too) or structurally upvote projects. There are enough projects on Hive that are self supporting and could benefit from some extra upvotes.
I've been trying to promote that earlier, but that didn't took off.