TANSTAAFL - There ain't no such thing as a free lunch

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Earlier today, I just saw a discussion on the blockchain between a couple of individuals that are both fighting abuse within the ecosystem. We'll call one of them Thomas Michael Moore and the other shall be called Howard Wallace. I won't get into the discussion of who's right and who's wrong, because that's not the point of this post. They both seem to have the right idea, which is that they've both identified a way to exploit the system. And where theres a way to exploit a system there will be a cheater that finds it and will abuse that vulnerability for short-term personal gain at the expense of long-term network health.

Hive's distribution mechanism

The Hive blockchain distributes newly minted tokens through something that was at some point known as Proof of Brain (PoB) mechanism (I'm not sure if this term is popular any more), designed to reward content creators, curators, and other stakeholders for their contributions to the ecosystem. Here’s a breakdown of how Hive distributes its inflationary rewards.

Let's first look at some key factors

Inflation Rate:

The Hive blockchain uses a declining inflation model:
Starting from ~8% annually in March 2020 (after the Hive fork from Steem). Decreasing by 0.5% annually until it reaches a fixed 1% annual inflation rate in the long term.

Block Time:

Hive has a block time of 3 seconds. This means approximately 20 blocks are created per minute, 1,200 blocks per hour, and 28,800 blocks per day.

Inflation Allocation:

Newly minted tokens are divided into different pools for content rewards, witnesses, and the Decentralized Hive Fund (DHF). We'll look at the exact percentages in just a moment.

At the time of writing, the current HIVE supply is 459,809,075 tokens (source:

) with an estimated inflation rate of 6% in 2024. As mentioned above, Hive has a 3 second block time, so the blockchain produces about 20 blocks per minute or about 10,512,000 blocks per year:

  20blocks/min×60min/hr×24hrs/day×365days/year= 10,512,000

If we take the current supply x the expected inflation rate we can calculate how many HIVE tokens are created per year (approximately):

  459,809,075×0.06=27,588,544.5 HIVE per year (approx.)

27,588,544.5 Hive per year / 10,512,000 blocks per year ≈2.62HIVE per block.

These are distributed in the following manner:

65% to Reward Pool (Content Creators & Curators):
```
2.62 × 0.65 = 1.70 HIVE per block
```
10% to Witnesses:
```
2.62 × 0.10 = 0.26 HIVE per block
```
15% to the Decentralized Hive Fund (DHF):
```
2.62×0.15 = 0.39 HIVE per block.
```
10% to Staking Incentives (if applicable):
```
2.62×0.10 = 0.26HIVE per block.
```

These Hive rewards are not paid out in liquid tokens. They're paid out in a combination of

Hive Power (HP): Illiquid, staked tokens that represent voting power and
Liquid HBD (Hive Backed Dollars): A liquid, stablecoin-like token pegged to the USD

Another consideration is that rewards are typically distributed after a 7-day voting window for posts and comments, ensuring fair assessment of community interest.

So now that we've gone over how Hive tokens are distributed I'd like to ask if you think it's possible for cheaters to try to find a way of earning more tokens with less effort.

Could content creators possibly be involved in...

Buying Votes (Pay-to-Win Dynamics): Offering direct financial or token-based incentives to stakeholders to secure votes, undermining the meritocratic basis of the system.
Gaming Content Metrics: If content quality or popularity impacts voting, creators might inflate metrics through self-voting or fake engagement through secondary accounts to appear more deserving of rewards.

The answer to these questions, I think is "yes". It's also true that it's in the community's (token holders) best interest to call out these bad actors. After all, I have vested interest in maintaining the network’s integrity, as its collapse would devalue my holdings.

In fact, token holders are empowered to enforce fair play by voting out or downvoting bad actors and reducing the amount of rewards these dishonest individuals receive from the reward pool.

What about curators with huge stake that don't do much for the blockchain other than blindly upvoting random posts to receive 8-10% APR in "curation" from the reward pool.

Like I've stated before in others posts:

and what seems like a free lunch to some today, won't be there tomorrow.

https://images.hive.blog/0x0/

Inflation on HIVE is decreasing by 0.5% annually until it reaches a fixed 1% and at that time will it really be profitable to try to game the system to extract a few pennies? I think not. It WILL, however, be profitable to come up with ways of providing value to the marketplace ( in the form of work or an automated solution) in exchange for value ( in the form of $HIVE).

value for value.

https://images.hive.blog/0x0/

Don't make it a goal to spend hours of your day writing 2 or 3 watered down shit posts only to extract pennies on the dollar; your time is worth more than that.