DegenHive Economy
DegenHive introduces a new “meta-economy” for the open-hive, which captures value within a multi-dimensional space involving digital assets ownership, virtual interactions and DeFi, all playing a special role for enabling a new form of value creation, exchange, and distribution among members of the open-hive.
DegenHive's economy leverages three core assets:
HIVE: The governance token and platform currency, enabling subscriptions, governance, and fueling the platform's growth.
BEE: The "meme-coin" with a burn mechanism, incentivizing engagement and building community.
HiveAsset NFTs: Foundational, evolvable NFTs, underpinning governance and economic expansion.
Challenges with Traditional AMM-Driven Token Economies
Decentralized Exchanges powered Automated Market Making models (AMMs) have revolutionized decentralized finance by enabling users to trade tokens in a decentralized manner. However, they present inherent challenges for the liquidity providers (LPs) who underpin their operation. One of the most significant issues is Impermanent Loss (IL). IL occurs when the relative prices of tokens within a liquidity pool change. LPs often experience financial losses as the trading fees earned may not sufficiently compensate for the fluctuations in token value, especially in highly volatile markets.
To mitigate IL and attract liquidity, many protocols resort to yield farming. This involves incentivizing LPs with additional token rewards. However, due to fixed token supplies, yield farming models are often unsustainable. As token rewards diminish over time, so too does the incentive for LPs to maintain their positions. This lack of sustained liquidity can negatively impact the health and efficiency of AMM pools, ultimately affecting the entire token economy.
The DegenHive Solution: Time-Streamer Auctions and the Lock-and-Burn Model
DegenHive tackles the limitations of AMM-driven token economies with Lock-and-Burn model fueled by Time-Streamer auctions. This section delves into the mechanics of these auctions, their economic impact, and how they contribute to a sustainable in-platform economy.
The Time-Streamer Profile: Empowering visibility and onboarding new creators to the platform
The Time-Streamer Profile is a unique built-in profile followed by every active HiveProfile on the social graph. It serves as the central hub for Time-Streamer auctions, facilitating the onboarding of creators and driving the Lock-and-Burn revenue model:
Visibility and Growth: Time-Streamer auctions offer users the opportunity to bid SUI for temporary control of the profile. The top 3 bidders gain the ability to post content, attracting increased visibility and subscribers within the social graph.
Onboarding creators: Winning bidders are ranked 1st, 2nd, and 3rd based on the engagement their content receives. They are awarded HiveKiosk objects, allowing them to launch and manage their own HiveAsset NFT collections. This not only onboards new creators to the social graph but also expands the ecosystem and increases governance participation.
Time-Streamer Auction Mechanics
These auctions operate as following:
Bidding and Frequency
Users compete by bidding SUI for temporary control of the Time-Streamer Profile
Auctions are held every 5 epoches (days), providing users regular opportunities to participate and potentially become a creator on the platform.
During the first 4 epochs, users can bid freely. In the final epoch, users have a single opportunity to increase their existing bid by a maximum of 50%.
This bidding mechanism encourages both strategic calculation and avoids gaming the system via bots
Winner Selection and Protocol Owned Liquidity
At the auction's conclusion, the top 3 bidders are crowned the Time-Streamer creators for the next cycle.
All SUI bids placed by winners, along with a 5% tax levied on all bids regardless of placement, are pooled as protocol-owned-liquidity to be used for the Lock-and-Burn model.
Benefits to Time-Streamer Auction Winners
Winning a Time-Streamer auction unlocks valuable tools and opportunities for creators within the DegenHive ecosystem:
Visibility and Subscriber Acquisition
Control of the Time-Streamer Profile provides a direct channel to reach the entire community, attracting subscribers and building the winner's social footprint.
This translates into income via the platform's subscription model and higher BEE rewards due to increased engagement
HiveAsset Creation and Management
Winners gain the ability to launch and manage their own HiveAsset NFT collections, a powerful tool for both creative expression and governance participation.
HiveAsset creators retain control over minting parameters and earn the majority of SUI from mint sales, as well as ongoing royalties from trading activity.
Creators can also provide payable metadata updates for their HiveAsset collection, which can be used to generate additional income stream on-top of above stated benefits
Auction Rewards
A portion of HIVE and BEE rewards reserved as incentives for engaging with time-stream content are distributed to the top 3 winning bidders.
Lock-and-burn Model for a sustainable economy
As mentioned above, SUI from bids placed by winners, along with a 5% tax levied on all bids regardless of placement, are pooled as protocol-owned-liquidity to be used for the Lock-and-Burn model.
As part of this model, the pooled SUI is added as single-sided liquidity to core AMM pools, namely the SUI-HIVE, SUI-BEE and SUI-dSUI AMM pools, and the corresponding LP tokens are permanently burned. This locks SUI and native tokens into the AMMs, ensuring perpetually in- creasing liquidity depth in the AMM Pools.
The economic impact of Time-Streamer auctions is multi-faceted:
Sustainable Liquidity: By adding SUI and burning the LP tokens, Time-Streamer auctions guarantee a perpetual increase in liquidity depth in these AMM pools. This promotes efficient token swaps as the locked liquidity keeps linearly increasing as it accumulates trading fees, ultimately leading to a more robust token economy as the tokens will build up sufficient non- incentivized liquidity depth over time.
Reduced Reliance on LP Incentives: As AMM liquidity becomes self-sustaining through the Lock-and-Burn model, the need for excessive LP token incentives (like HIVE) diminishes. This allows for a more strategic allocation of native tokens for other purposes across the platform.
Boosted Creator Economy: Time-Streamer auctions empower creators by granting them access to valuable tools and promoting their content. This fosters a vibrant creator ecosystem, attracting talent and fostering long-term user engagement.
Community Governance: The controlled inflation of HiveAsset NFTs, facilitated by Time- Streamer auctions, expands the DegenHive creator base. This broadens the pool of participants in the protocol’s governance, ensuring a diverse and engaged community voice.
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