Spending Limit Increase to 20%

Spending Limit Increase to 20%

Proposal Information

Proposal description:
Increase 1Hive’s Spending Limit to 20% from 10%

Proposal Rationale
The expected effects of this change and rationale were written up in this forum post.

From that post:

There are 2 key reasons that I believe a spending limit increase will help the 1Hive economy:

  • Honey isn’t flowing quickly enough to currently active contributors. The initial launch of 1Hive hasn’t generated much value growth that Honey is capturing. Current active contributors are essentially bootstrapping the DAO, and Honey distribution through inflation should reflect that.
  • 1Hive’s ability to fund work in an economic downturn is a competitive advantage, thanks to Dynamic Issuance. 1Hive didn’t do a great job of diversifying its treasury when the price of $HNY was healthier, which was a big mistake in hindsight. However, 1Hive has still managed to stay productive while its token price has plunged because the Dynamic Issuance policy is sophisticated enough to mirror productivity with its inflation. Most DAOs with more primitive token supply systems and equivalent token price drops to 1Hive have suffered much greater drops in productivity. Increasing the Spending Limit will help us leverage this advantage.

This is coming out of an ongoing conversation started by Celeste Dispute #7, which blocked a funding proposal on the basis that splitting funding proposals bypasses an intended purpose of Conviction Voting.