Hard cap the total supply of HNY token at 30,000

[Pressure]

Proposal Title: Hard cap the total supply of HNY token at 30,000 total HNY.

Proposal Information

Proposal description:
Hard cap the total supply of HNY token at 30,000 total HNY.

Proposal Rationale
Aside from the fantastic 1hive community and the ease/convenience/inexpensiveness of Honeyswap, the primary attraction of HNY to me is the low token supply. I and many others will likely be very turned off if the issuance rate is increased or if there is not a definitive cap set for the overall supply of HNY that will ever exist.

My proposal is to put a hard cap of 30,000 HNY that can ever be created. This means that if you want to start issuing rewards for content, contributions, participation, etc., then you will not be issuing whole HNY (eg, 1, 2, 5, etc.) but fractions (eg, 0.05, 0.1, etc.).

HNY is divisible to millionths of a decimal just like Bitcoin is. Keeping a low token supply will inherently increase the value of HNY and attract new investors and contributors. Increasing the token supply will be hugely aversive to me and other likeminded investors who are much more attracted to projects with low token supply that don’t have the ability to magically create new tokens and dump them on investors.

If I wanted to invest in an asset that is susceptible to inflation overtime, I would have just kept my money in USD. If anything, make HNY deflationary.

Expected duration or delivery date (if applicable):
Minutes.

Team Information (For Funding Proposals)

Names, usernames, and/or relevant social links for team members (Twitter, Github, 1Hive Forum, etc.):
Not applicable.

Skills and previous experience in related or similar work:
Not applicable.

Funding Information (For Funding Proposals)

Amount of HNY requested:
0.

Ethereum address where funds shall be transferred:
Not applicable.

More detailed description of how funds will be handled and used:
Not applicable.

[CurlyBracketEffect]

I can see what you’re saying. If Honey is to really be Money then it would certainly be helpful if the supply was limited. I feel like 30,000 is awfully low though. I’m not really basing that on anything, it’s just a feeling. Can you share how you came up with the 30,000 number? Why not 30,000,000?

[berserk]

I think most of the people here understand what scarcity is and how it would help to increase the value of the hny token.

In my opinion to limit that much the amount of tokens at this incipient stage of the project won’t help the ecosystem to grow.

I agree that the supply should be limited to a number, but this number should be based on a plan and have something tangible behind it.

[Pressure]

I like this response and don’t disagree.

[MagorMisabib]

Although the cap idea is great, and I’m 100% supportive on it, I would like to recommend a bit higher cap. If we used HNY/USD just for the sake of a reference for comparison with other important coins, you will see that high quality coins like WBTC, ETH, and BCH have Mkt Caps of 10 digits, while new projects are within 8-9 digits. We should target for something similar starting with 9 digits which a current HNY/USD price (~1200) would be something around 100,000 HNY.

[Pressure]

Thanks for contributing to this thread, MagorMisabib! I appreciate your insight, but I have to disagree. This proposal thread is strongly against and does not support a token supply over 1,000,000. Please make a new thread if you are proposing we increase the token supply that high.

Market cap = (token supply) x (token price)

The current price of HNY is $1285, current token supply is 25,224.28. Let’s plug it in!

1285 x 25,224.28 = 32,413,199.8

The market cap of HNY is currently just 32 million.

Let’s look at this another way. Let’s take your proposal and give HNY a 1,000,000 token supply and revise our formula with our current market cap:

32,413,199.8 = (1,000,000) x (token price)
$32.413 = token price

So if we currently had 1,000,000 token supply for HNY, the price would depreciate/inflate to $32 from $1280, and the value of our holdings would decrease 40x.

Another way of looking at this is to demonstrate what would be missed potential for massive value for HNY by comparing to Bitcoin. The market cap of Bitcoin is currently 210,623,449,591, making HNY 6,500x smaller than Bitcoin. Imagine HNY ever reaches the market cap of Bitcoin with the current token supply:

210,623,449,591 = (25,224.28) x (token price)
$8,350,028.21 = token price

I don’t think we’ll reach these heights in the near future, but the concept remains the same: if we devalue HNY by increasing the supply to the millions, then for example, if the token supply were 1,000,000 we would only see a HNY token price of $210,623.44. Yes, this is a massive price, but it’s quite literally 40x smaller than the price we would see if the token supply were smaller.

tl;dr - This thread proposes we cap the token supply at 30,000, or within the 10,000s-100,000s. This thread does not support a capped token supply of 1,000,000 or more.

[MagorMisabib]

@MagorMisabib

would be something around 100,000 HNY.

We are talking about the same, I suggested 100,000 HNY max , based on the other markets. My only addition to your proposal is to increase from 30,000 HNY to 100,000 HNY. I’m basically doing the math that you are doing … (I did not suggested 1,000,000 token supply for HNY)

[onbjerg]

I’m unsure why you just went ahead and created a proposal without first discussing it in full over at the collective thread on the issuance policy: Discussion: Honey Issuance Policy

It is of course your prerogative to do so. If you have not created a proposal on Honey Pot, but just on here, then why didn’t we just discuss it in the collective thread where there are a multitude of opinions on the issuance policy?

Furthermore, I would just say I disagree with this proposal in its current form. I feel 30k was chosen arbitrarily, and the only thought there is behind it is inflation = bad because Bitcoin says so, while that is absolutely not the case. Different purposes for different tokens would also mean that they have to exhibit different properties. I do agree that 60% issuance per year is a lot though, which is also why it is being discussed in length in the thread I have linked.

[Pressure]

The difference between this thread and the other thread is that the other thread implies that we need to revise the current issuance policy, whereas the current thread is proposing that we get rid of the issuance policy altogether and impose a hard cap on the supply.

I hear what you’re saying though, @onbjerg, and I have already removed this proposal and stated I’ll let the rest of the community/developers decide what’s best.

[onbjerg]

Setting the issuance rate to 0% is also revising the issuance policy is what I am trying to get at

[Pressure]

Fair point! Lol I didn’t think of it that way.

[thebeesknees]

I have been liking a lot of the responses on both sides of the argument for or against capping the total supply amount of HNY because this community is full of smart people who have valid arguments and have demonstrated their cases in compelling ways. I am new to the conversation and am doing my research to catch up to everyone in regards to tokenomics or token economics (one of those two)… Anyhow I would like to say keeping the supply low will always ensure the ecosystem can thrive and those that have HNY now will want to continue to be good little worker bees and collect more and more HNY!! =)

[Kuli]

In the simplest terms supply and demand. Too much supply and the value drops, too little and then everything is factionalized… To me this is a good problem to have. This is a balance that needs to be carefully planned and strategized. Very valuable input thank you.

[cryptematical]

Given the divisible nature of HNY, 100,000 would be arbitrary. I like 30k as that’s the lowest multiple of 10,000 past where we are already at. To prevent the dilution of individual’s current holdings, I lean towards holding supply closer to what there already is.

[cryptematical]

30,000 is the closest multiple of 10,000 to that of the current supply. This would leave space for tokens to distributed while preventing the dilution of value of current holders. Personally, I agree with this post and think 25,000 is even doable, where we burn some of the common pool.

At the end of the day, this is a governance token. In order to protect the integrity of each token, few token would be ideal. Given the divisible nature of the token, I lean towards fewer tokens, while remaining as near to the current supply as possible such that we do not dissuade current community members with shocks to the market, or supply. Appreciation must be a given (for me at least)!

[cryptematical]

@Pressure I agree entirely. I put this proposal up there; we’ll see: 1hive.org/#/proposal/54

[Solutyun]

why not make it 21 million, and compete in the market effectively. Obviously the ultra low float is not working!? Yet, in the coming months the ineffective approach of your strategy will become more evident. More coins/float greater opportunity - working capitol etc, I matched the float to that “similar” of Bitcoin, because you can’t really argue with what popularity does for the value of a coin! HNY is a utility token and it should be treated as such, the ultra low float concept needs to adapted, or competition is going to gobble y’all up. Increased competition in 2021 and the early advantage in the space is coming to an end, should consider competing more effectively. A lot of guys know how to “copy and paste”!

[cryptematical]

What’s copied and pasted? Please explain. I get the impression you did not actually read what was written, as your reference to 21 million completely overlooks some of the main points regarding why 30k. Check out some of the most recent comments in the Issuance Forum:

Discussion: Honey Issuance Policy

Public Good: “A public good is a good that is both non-excludable and non-rivalrous. This means that individuals cannot be effectively excluded from its use, and use by one individual does not reduce its availability to others.” So the most common example of a public good is national defense. Individuals within a nation cannot be excluded from this. The public good is not HNY, but instead, the ecosystem. Regardless of whether one wants to participate, we cannot exclude someone from the ecosyst…

[Solutyun]

I’m not overlooking why 30K, I see it as a monumental blunder, and perceived regret in years to come. Keep in mind that I’m an early investor, and that I’ve watched companies rise and fall, with good and bad decisions. I don’t think you guys are willing to adjust or adapt, and if you do, it will most likely be too late! However, these words you may better perceive in three years time, I’m not explaining “copy and paste,” because it does not need to be explained! I’ve expressed a better, more competitive, aggressive, and brilliant plan in my messages. If you do not perceive it, hindsight is often the most regrettable of situations. See, I’m over discussing or debating this topic, it seems to be fruitless, and more importantly only rivaled by mostly baseless and inexperienced arguments! I’m not arguing this any longer. even if you are wrong, you will go on thinking you are right, and in 2-5 years specifically in that time period you will likely perceive that I was right, nonetheless it is likely to occur before then as well. I’ve offered a ultra competitive, expansive, effective, and “Awesome” strategy, if you can not perceive it with clarity, than make the adaption. It is that I perceive that Honeyswap needs to adapt, whereas you do not, the community governance trend is going to utterly ruin some of the start-ups. It’s a trend that some are going to regret, mainly for this reason “timing,” and for everything under the sun there is a time. I watched the community basically ruin another companies chances with irrelevant and ignorant decisions approx. 3 months ago. I’m not saying that you have no chance, I’m “just” in trying to share a better option! However, the combative ignorance is even more alarming! Listening to a community that lacks experience a s a whole, leads the “whole” start-up into the ditch. Considering some of the replies and responses, I may choose to devest, because if such are moving you one way or another, at best you will become irrelevant in the space. That at this “time” you had a great opportunity to dominate. I’ve operated and built more than five companies, each was prosperous in a time that would allow such, in the actual world! So, I’m not proceeding to try and help, and I don’t think that you appreciate constructive criticism, or rational opinions. Nonetheless, if I were willing to sit idle like and watch company after company snatch away your market share, than I would have said “nothing”. And quite possibly that it the better option at this point!

[CurlyBracketEffect]

I really don’t think you understand what HNY is, because you call it a “utility token” in your message. It is very clearly stated in the 1Hive Docs that Honey is Money, and serves as the economic incentive to fund the production of public goods.

There are several “successful” coins that have low circulating, and even more coins with a large circulating supply, so I am not sure what your point is when you say to “compete in the market effectively” we should change the supply to 21 million. In my opinion, you have not brought forth a sound argument for setting the supply to 21 million. You have simply stated that we copy the supply of Bitcoin, while in the same breath accusing the community of “copy/pasting”

I am also not sure what you mean by you offered an “expansive…and ‘Awesome’ strategy”. Suggesting we set the supply to 21 million, doesn’t seem like an expansive strategy to me. You criticize the project for championing a community lead governance model, by participating in the community-run governance model.

To be fair if you were an early investor why did you invest if you think that community run projects don’t work?