Justin Sun image via CoinDesk archives
It’s been a week since the community that drove the Steem blockchain largely broke off to form Hive, and the market action so far has been on the side of the dissidents.
Hive tokens are trading at $0.321 versus steem at $0.168, according to CoinGecko at the time of this writing. The upstart is almost twice as valuable as the original blockchain.
“This is a true show of how a community can’t be bought,” Dan Hensley, a major holder of steem, and now hive, told CoinDesk.
To very quickly recap this saga: Steem is a public blockchain largely launched by Steemit, the company, which ran the user interface that made it known as a blockchain for bloggers. Steemit owned enough steem tokens to influence governance, but it never exercised them. Then, following long-term financial stress, the company sold to Justin Sun’s Tron Foundation, which began to make moves to use those tokens to change how Steem worked. A group of developers opted to hard fork the blockchain and create new interfaces for it rather than continue to wrestle with Sun, which led to the blockchain now known as Hive.
“Justin Sun promised to pump our bags and we chose the hard unknown route. And for our price to be above steem from the get-go is a testament to the community,” Hensley said.
The Tron Foundation did not respond to a request for comment from CoinDesk and has not responded to multiple requests throughout the reporting of this story.
When Hive split, it copied the blockchain so that all the content published on Steem would belong again to Hive users, with the exception of the balances that had been controlled by the now-Sun-controlled Steemit Inc. and its so-called “ninja-mined stake.”
Meanwhile, a lot of the major pillars of the community are moving over to Hive, and major holders of steem tokens have begun making moves to exit their positions.
“While it’s very entertaining to see Hive trade so much higher than Steem, I wouldn’t give it too much weight until there’s more time for it to play out,” crypto trader Brian Krogsgard told CoinDesk via email. “I presume the Steem 3X from March 18th was related to the snapshot. Whoever got left holding that after it came down could become motivated sellers of Hive if it stays elevated.”
Exits on either side won’t happen as suddenly as they could on other blockchains, however, because many Steem believers have had their tokens staked as “steem power.” It takes 13 weeks to fully unstake tokens that have been staked. They open up in weekly tranches. Airdropped Hive will also be staked.
Hensley said his first tranche is being liberated today and he plans to unload thousands of dollars worth of steem onto the market and will continue to do so until it’s gone.
Steem (and now Hive) operate using the delegated proof-of-stake (DPoS) consensus model, where a relatively small number of nodes have outside power over what happens on the blockchain. The fork has led to some particularly blockchainy quirks. For example, any tokens that were staked on Steem are now staked on Hive as well.
The upshot of this is that crypto exchange Binance, for example, is not able to move all of its token holdings yet. It decided to support the hard fork by allocating the hive airdrop to its users, despite having initially backed the Tron Foundation in its bid to sway Steem governance.
Steemit is behaving defensively.
The official Steemit channel on the website acknowledged that it had started censoring posts that had encouragied Steemit users to exit for for Hive.
The Steemit post sought to defend the company’s actions, stating:
“Would any commercial website support a post that encourages all users to migrate to another one? No. That would not be in the best interest of the community and the Steem ecosystem.”
Several members of the Steem community have since asked CoinDesk to flag the censorship, with many posts having disappeared from the site. As one longtime Steem user noted on Twitter, Steemit’s terms of service have been updated with the following:
“Without limiting the generality of the foregoing, you agree that you will not: … Use our services to promote third-party platforms or to promote each other without our written permission.”
Hensley noted that some alternatives for content makers are already up and running, including PeakD, Hive Blog and 3speak. Because Hive’s genesis ported old content over to the new blockchain, existing Steemit posts should be there on Hive user interfaces.
“I think with the community exodus many people are ‘powering down’ and selling steem as fast as they can, which puts a lot of sell pressure,” Roeland Lanparty, a long-time witness on Steem who shut down his node right after the hard fork, told CoinDesk in an email.
Lanparty says users are now using BlockTrades to trade their steem for more hive tokens.
“I started a full power-down early last week and have already sold my first 1/13th of stake (not financial advice),” he wrote.
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