Spknetwork SIP: Potential To Eat Up A Lot Of Hive
With the introduction of the @spknetwork Light Paper, we got a bit more insight into what that project is planning. It seems the scope is much bigger than any of us were led to believe. This is not just adding decentralized video storage to the world of social media. Instead we are seeing an entire platform being built that is using multiple chains. It looks like it will be capable of providing any services that are available on Ethereum.
Since there were no target dates announced or specific road map, we are only left to speculate the timing of all this. What we do know is that as this unfolds, we are going to see a system put together that takes decentralization to a completely new level. This will further enhance the push away from the centralized entities that are able to control accounts and remove content.
There is a lot to digest in the Light Paper. It is something that most of us will not fully understand until it starts to roll out. Despite that, it is evident this is a terrific opportunity for anyone who gets involved. This platform is going to offer many different ways to reward people. Thus, each is free to determine how involved he or she would like to be.
Of course, this is not operating in a vacuum. It is going to be built upon a couple different blockchains. Hence, it is not a new blockchain project as much as a multi-chain platform that seeks to offer users all the technology that is needed.
This is great news for Hive. To start, the platform is going to use Hive for all its text posting. Just like we see with 3Speak.tv, all posts on that application appear on Hive. Naturally, the video is not on the blockchain since Hive only stores text. Nevertheless, it seems that all videos that are run on the Spknetwork system will be posted to Hive.
Here we could see a major increase in volume if this is indeed the case.
Is this a situation where Hive becomes a major part of the account management system? This is another thing that is unclear at this point. The system is going to allow users to sign up with Twitter, Facebook and Google accounts. It is an easy way to start to onboard people without the hassle of dealing with keys. However, on the back end, to interact with this blockchain, a Hive account is needed. Will it be a proxy account handling it all or will each user have a Hive account created that they can claim similar to what Leofinance did? It would seem that it all depends upon how payouts take place.
That said, the area that could have the biggest impact on Hive is the SIP.
This stands for Service Infrastructure Pools. It looks like this is a foundation for which the entire project is build. There also is the case that could be made that it is about to entirely change how we approach token usage.
From what we can garner, the SIP is a one-way street. What goes in does not come out. Think of it as a lockbox very similar to a Null account. When projects burn tokens, they do so by sending them to an account, often Null, where there are no keys. Hence the tokens are "burned" in that they are removed from circulation.
The SIP is a bit different. This is not a burn nor are any tokens being destroyed. It does not reduce the inflation rate nor lower the float. Instead, it puts the tokens to work.
Why burn money when you can use it to generate more money? That is the concept that is being followed.
To give a basic overview, the SIP will have 4 tokens tied to it: LARYNX, SPEAK< BROCA, and HIVE. The last one is there to be a pair for all the rest.
The HIVE token goes into the SIP via purchases of advertising or LARNYX (mining) tokens. When this happens, the HIVE is split 3 ways: 1/3 each in SPEAK, BROCA, and HIVE.
Here we have a permanent liquidity pool forming for each of these tokens. This is a decentralized "exchange" that allows for the swapping of tokens. Over time, the goal is for all the activity to feed into this pool, growing it in size. This means that we could see the largest pool of these tokens, thus reducing slippage while also having massive liquidity available to all traders.
We can also surmise that if enough activity is taking place, the feed generated can fund a host of different options. In addition to miners, it is a way to pay for development, either on the Spknetwork or the associated blockchains.
Going one step further, this is just the base layer of the SIP. This is not the end of it. As communities decide to build on the Spknetwork, they will also have the ability to create their own SIP. Think of it as ultimately a web of SIPs, all containing different tokens and providing liquidity for all who need it.
This is from the Light Paper:
he SIP model can be adapted and applied to any digital service on DPoS chains, not only service infrastructure providers for content.
As the project progresses, the vision is that all Breakaway Communities (see section 8) will be backed by their own SIP's, all tying into an integrated, optimised multi SIP infrastructure ecosystem.
Hence, the idea is to keep duplicating this idea across many different communities, most of which will end up being tokenized. This could provide a great deal of liquidity to their projects as they follow a similar governance model as SPEAK.
From Hive's perspective, this could lock up a great many tokens. We know the advertising money that is generated by the likes of YouTube. It runs into the billions of dollars each year.
While we will not presume the Spknetwork will match that (it could over time), it is easy to see how this is providing an enormous sink. The fact that HIVE is the only token used to acquire new miners AND advertising provides a great use case.
All that goes in does not come out.
This is akin to burning HIVE each time someone makes a purchase on the Spknetwrok. If there are millions of videos being uploaded, viewed, and tokenized, we will see this process eat up a ton of HIVE. There is simply no other way for it to unfold.
One of the key ideas behind this project is that content creators can earn not only token but the revenues from the advertising. This is something they miss out on with YouTube and platforms like that.
Therefore, they have more control over their content as well as operating under a better monetization system.
To be honest, this concept could spread very quickly. It would not be surprising to see a few large communities jump on this idea.
Finally, we are only focusing upon the area that most of us are familiar with. This project is going to also be heavily focused upon DeFi and NFTs. All can be built on the network but utilizing the inexpensive fee (or fee-less) structure.
Be sure to check out the Spknetwork for more information.
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