I first started tagging proof-of-brain May 20th when someone suggested that I should. Whatever's clever, free money, amirite? In the first week I sold my rewards because the token seemed overpriced. 80 cents for one POB. Got like $150.
It seemed rude to dump an "airdrop" like that, but I figured it might do better elsewhere... which it did. I've since then reinvested the $150 and got something like 700 coins. I also get a lot of blogging rewards and did various other mini-buys. I now have just under 2k coins staked.
2k POB is a ton.
With less than a million coins in circulation so far, I own 0.27% of the total coins. I consider a 1/1000'th share to be a whales stake at these entry levels. That's 2.7 whales worth of stake for very little risk (close to 100% rewarded via blog posts plus a good gamble).
So that makes me a whale x2.7 on POB basically for free, and inflation and yield is very very high. It might be on the same schedule as Bitcoin, but Bitcoin's inflation was quite high at the beginning.
Drama!
So there was a lot of talk about POB recently. Many saying it was insecure and very risky due to centralization. I would say that about every new token but that's just me. @onealfa.pob has 72222 tokens powered up... that's 8.4% of the total supply.
@onealfa is in? I'm in too.
It would be super rude to dump these rewards rather than dipping my toes in. I'm not rude (this time for once).
Yield
Now that I have over 2k tokens I have access to quite a bit of yield. Bitcoin creates 50 coins per ten minutes. This is the model that was copied. That's 2,628,000 million coins a year until the first halving event (4 years). Seeing as there are still less than 1M in supply and 219k POB will be minted a month, that's a 25% yield for the month of July. Meanwhile, Hive has 8% yearly inflation. This allows us to get around 12% APR because liquid tokens don't control rewards, allowing powered up tokens to allocate more. 12% a year vs 25% a month... Of course all this math assumes a static token price (which never happens).
@lucylin
A lot of the drama with POB stemmed from a political standoff of sorts. I've had lots of interactions with @lucylin, and my... is he a character. I would never downvote him, but also I don't need to be jumping into that mess and weighing in on a topic I've been largely ignoring. Gonna sit that one out for now. I know exactly why he's being downvoted from my interactions with him, in combination with old-guard politics here on Hive.
Inflation schedule
I've been quite vocal about my stance on inflation lately. I'm not impressed by deflationary economics. Luckily POB has no plans to lower inflation for over 3 years so, for now the inflation is hyperinflationary, which is right where it should be imo.
On top of that, 10% of all POB seems to be going to the dev team. If you were going to attack the network's credibility, why not start there? A 10% permanent premine is pretty atrocious, and they clearly aren't even providing liquidity even though the network desperately needs a market-making bot.
The best solution is to ditch order books and switch to AMM, but perhaps that's asking too much.
At the end of the day that's a HiveEngine issue.
Speaking of HiveEngine issues.
POB has also received some flak for muting users from the network, a utility that all HiveEngine tokens have and use. Personally, I don't agree this functionality should exist. But it does so... people use it. It's a simple argument:
Centralized leadership vs corruption liability
Does the benefit outweigh the corruption? That's what crypto is testing on every level worldwide. There will be many winners and many implosions. Business as usual. Singling out POB seems, strange.
Is it strange, though?
Wasn't that long ago that LEO was also seen through a similar lens.
Rewarding/rewarded in 4 different currencies
At this point every one of my posts pays out Hive, LEO, POB, and PAL. The PAL rewards are pretty insignificant but the other three are quite substantial. On top of that I upvote comments which in turn distributes all 4 tokens to my readers/supporters. It's a pretty crazy model and it's an interesting distribution method. Show me anywhere else where someone can earn 4+ different currencies with a single comment. Think about that for a tick, because it's powerful.
Conclusion
Is Proof-of-brain a good investment? Don't know, don't care. I don't have to worry about it. I'm simply going to powerup my rewards and gamble on the market a tiny bit (market making). It's pretty low risk. Again, currently 900 coins is a whale's share. It doesn't take much risk to dip ones toes.
- The yield is high.
- The centralization is high (both control and distribution).
- The 10% perma-premine is offensive.
But still if @onealfa is gonna throw down on it I'm not going to turn my nose up at that. He basically makes this place his full time job, and he works for free and asks for little in return. Pretty good player to have on your side when considering up-and-coming communities.
At the end of the day Hive takes 10% for witnesses and 10% for the dev fund. That's double the tax that POB takes from their stakeholders. This is justifiable because theoretically the value generated from the dev fund pays for itself and 20 + 1 witnesses split the other 10%. That's certainly more decentralized than 10% to a single source.
Is POB somehow better than Hive? In my opinion you can't even really compare the two. Hive is the gas of the entire network and many are woefully underestimating the power of yield farming bandwidth via resource credits. POB is a fun thing on the side that no one should be taking any kind of serious risk on. Keep it casual and see what happens.
It's always interesting getting a new distribution and seeing how people react to the power shift. POB is controlled by POB holders, that's a pretty niche group. Same is true for LEO and CUB. Same is true for Hive when compared to a bigger network like ETH or BTC. We see the tribalism pop up everywhere and it's hard to tell if the arguments for or against a certain token are riddled with bias or not.
I would say this review is both extremely unbiased in several ways and biased in others. At the end of the day I can't filter out my gut feelings when it comes to these matters. And neither can anyone else. Eliminating ego and bias completely leaves us with too many unanswered questions. Assumptions must be made. Hopefully we guess right more than we guess wrong.
I assume that POB will be a fun token to play around with WITHOUT taking any kind of serious risks to one's portfolio. If I were going to put a number on it, I'd say if you have more than 1% of your total worth in POB you are already quite overextended. That's a pretty reasonable matter of fact.
I'm not overextended on POB, but I am quite overextended on Hive.
Call it a guilty pleasure.
I believe in the power of the main chain.
That doesn't mean I'll totally ignore the rest.
Posted Using LeoFinance Beta
Return from What's up with Proof-of-Brain token? (POB) to edicted's Web3 Blog
