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

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.

2 Likes

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?

2 Likes

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.

4 Likes

I like this response and don’t disagree.

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.

1 Like

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.

2 Likes

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 :wink: … (I did not suggested 1,000,000 token supply for HNY)

1 Like

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? :blush:

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.

3 Likes

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.

1 Like

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

1 Like

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

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!! =)