My Gleanings on Hive Inflation & A Thought on Burning HIVE
G'day everyone,
I've been diving into the Hive ecosystem for a while now and thought I'd share my understanding of how Hive inflation works and whether we should be thinking about burning some HIVE along the way to help with price sustainability. Keep in mind, this is just my gleanings from what I've read and seen—keen to hear what others think. Also credit to
@caimanx who is working hard to burn some CL cards, please go check out his posts and comps
Hive’s Inflation Model – More Users, More Staking, More Demand?
Hive is an inflationary cryptocurrency, meaning new HIVE tokens get created all the time. Unlike Bitcoin, which has a hard cap of 21 million, Hive’s supply keeps expanding, but at a reducing rate. From what I gather, inflation is sitting around 8% per year, and it shrinks by 0.5% each year until it eventually levels out at about 1%.
Where does all this new HIVE go?
Content Creators & Curators (65%) – If you’re writing blogs or upvoting, you’re getting a chunk of this.
Stakers (15%) – People who stake their HIVE (Hive Power) get rewarded over time.
Witnesses (10%) – The ones keeping the blockchain running.
Development Fund (10%) – Used to fund Hive projects.
So the way I see it, the Hive economy relies heavily on growth – more users, more stakers, more engagement. If the number of people actively using Hive stalls or drops, then inflation starts to dilute value.
This got me thinking... should we be burning some Hive along the way?
Is Burning Hive a Good Idea?
Burning Hive means permanently removing tokens from circulation, which should (in theory) increase scarcity and help price stability. Some people might argue we should let the economy do its thing naturally, but I reckon adding in some fun ways to burn HIVE could be good for the long term.
Burning Through Blogging – Community-Driven Ideas
Here are a few blogging activities we could do that would burn Hive while keeping the community engaged:
- "Burn to Earn" Writing Contest
Writers submit their best posts, but to enter, they have to burn a small amount of HIVE.
Winning entries get big upvotes or HBD rewards.
Would help remove some HIVE from circulation while encouraging quality content.
- "Proof of Burn" Challenge
Participants write about why burning HIVE is beneficial.
To qualify, they have to prove they burned some HIVE in a transaction.
Community votes on the best piece, and the winner gets a delegation boost.
- NFT + Hive Burn Event
Writers submit short stories, and the best ones get minted as NFTs on Hive.
To enter, they burn HIVE as a fee.
The NFT sales could also have a percentage auto-burned.
- Hive Price Prediction Competition
People predict what HIVE’s price will be in a month.
To enter, they must burn a small amount of HIVE.
Closest prediction wins HBD or Hive Power.
Can Witnesses & Swaps Contribute to Burns?
Another idea that came to mind is getting a Hive Witness to commit to burning 50% of their earnings.
Witnesses play a huge role in keeping Hive running, and while most reinvest their earnings into infrastructure or delegations, it would be interesting to see if someone would step up to be a "Burn Witness"—committing to burning half of their Hive rewards.
Another option could be burning through transaction fees. For example, someone who facilitates HIVE to Swap.HIVE transactions (or other token swaps) could burn half the fee collected on each trade.
This way, every time people move between different Hive assets, a small percentage of HIVE gets permanently removed from circulation.
Final Thoughts – Should We Start Burning Hive?
Hive's current model is sustainable IF new users keep coming in and staking remains strong. But I think adding a bit of burn here and there could be a good way to support the price and keep things interesting. Whether through community contests, witness commitments, or fee-based burns, there are plenty of ways to experiment with reducing supply over time.
Would be keen to see what others think—does it make sense, or am I barking up the wrong tree?
Drop your thoughts below!
The downside of your suggestion is that it penalizes small, contributing and engaging accounts. They sacrifice some of their rewards. And profiteers from the (hopefully) less inflated Hive are then all, but mostly the ones who sell large sums of Hive.
I suggest a small modification on the frontends to indicate whether an account is "building or leeching", using the KE-ratio. Users can then decide to upvote such accounts or not.
Interesting, however wouldn't this mean the rich get richer ?
This happens anyway. The money system was created to make the rich richer.
But why would such a voting behavior make the rich richer per se? It just favors users who not drain the reward pool.
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I think burning some Hive has long been regarded as a way to "positively support" the community and the token.
There are a few initiatives dedicated to burning Hive/HBD, most notably the @buildawhale account creates daily "Burn Posts" that take about about $500-$700 worth our of circulation every day (check the comments on each post). The @centtoken project runs a similar initiative, although on a much smaller scale, but it all adds up. Same with @voice.direct.
As you probably discovered, there are a number of posters who regularly burn part of their rewards.
Anyway, I like your suggestions because they are more broadly community based. People like contests, so that might be a good way to try. I'm not sure witnesses would be into burning 50% of their rewards because they need to pay for their tech somehow, but those in favor of ramping up Hive's burn rate might be good to approach as "sponsors" of contest prizes.
I think the idea would work best if the outcome is a "net burn" situation... a "topic of the week" perhaps; all participants MUST make the @null account at least a 25% beneficiary; prizes for 1st, 2nd, 3rd... maybe even turn it into an annual "league" where people can accumulate "points" towards an end-of-year grand prize of some sort... 1 point for entering, 5 points for 3rd place, 10 points for 2nd, 20 points for 1st to encourage people to participate regularly.
Yeah, I could see that. Certainly worth exploring!
Great to learn people are already burning posts , I really like the idea of a winners bird, maybe even a anti hive token you earn per burn