Wrapped Hive(WHIVE) - The Ultimate Game Changer

in HODL2 months ago

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One of the functionalities Hive lacked since its inception when compared to other Blockchain networks like Ethereum is the Smart Contract Extensibility on its first layer.

While many may argue about its advantages and/or disadvantages, one important thing is that it limits Hive users from participating in some De-Fi operations such as crypto loan collateralization which is basically the use of a valuable asset to secure a loan,which translates to using ones Hive holdings as collateral in securing a loan.

In the past, this was only achievable through private lending parties within the Hive community, one which was popularly known as Bank of Neoxian with few other less popular private lenders who took the traditional route of signing these lending contracts on chain by agreements made through posts, however, these methods were very imperfect and came with a lot of issues, ultimately they were nothing compared to the legacy systems operating outside of Hive such as Ethereum.

Ethereum simply gives people the opportunity to get more value out of their ETH by allowing them to obtain loan using their ETH as collateral in a simple, fast, secure and decentralized way. To read more about the collateralization on Ethereum network click here.

A lot of Hive users must have seen the buzz about Wrapped Hive and are wondering why its a big deal, personally I see this innovation as the ultimate game changer for the entire Hive network but before I go further, I'd like to share my understanding about the wrapping of tokens and my reasons for my conclusion.

Wrapped Token is a design pattern where you ‘wrap’ or ‘transform’ an existing crypto asset or Token (ETH, ERC20, BTC) into a new Wrapped Token with additional functionality.

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Source

Essentially, wrapping Hive means transforming its token into a new token with additional functionality, in this case, wrapping Hive token into Ethereum makes the Hive token ERC20 compactible, giving Hive the additional functionalities of Ethereum on Ethereum network.

According to the developer(@fbslo) responsible for coding this contract,

Wrapped Hive (WHIVE) is an ERC20 token on Ethereum blockchain. It's backed by "real" HIVE and can be converted ("unwrapped") at any time.
It allows HIVE to be traded on Decentralized exchanges (DEXes) on Ethereum and be used with DeFi platforms.
Source

It all sounds simple but provides a whole new range of possibilities to the Hive network, one example out of the many possibilities this brings is enabling Hive holders to finally be able to use their Hive as collateral in securing a loan in a simple, fast, secure and decentralized way on the Ethereum blockchain.

"Mary has $10,000 worth of Hive, she can decide to wrap the Hive to secure a loan of $5,000 for a stipulated amount of time in a fast, simple and decentralized way. And when the loan is due, she pays back, unwraps the wrapped Hive and sends it back to Hive blockchain."

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Image by @doze

It doesn't end there, depending on whatever Mary intends to do with her loan over the span of 12 months, let us imagine she wants to make more money, which is where it gets really interesting. She simply obtains more Hive with her loan, powers it up and uses it to curate or delegates it to a profitable program, makes some cool APR and powers it down 3 months before her loan is due, thereby putting her loan to work for her, making her more money.

At the end of the day, chances are, Mary will have made more Hive or money than she collaterized, with all things being equal. This is just one of the possibilities of having the Wrapped Hive functionality.

Even while this system is still in its development phase, the possibilities are super exciting to think about. However, the excitement don't seem to tell on the price of Hive token just yet. At the current price of $0.23 per Hive, this is such a discount compared to what it should be, given the capabilities of the network. How long more do you think it will remain so by the time people realize what can be done here?

Wrapped Hive is not just a big deal, its the Ultimate game changer.

Thank you for reading.

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Not on Hive? You're missing a great deal of action, want to join Hive through my Ref Link and let me walk you through starting up? Click the image below.

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It also works the other way. One can now use Bitcoin or Ethereum and stake that to use as a loan to get HIVE, which then can be powered up.

That's correct, even BAT tokens one gets from browsing with the Brave browser can also be staked as collateral to get Hive...its really interesting

Hive is going to now start showing it's value to ETH dapps with wHive

Definitely! Thats a sure bet!

You did not lie when you said you were cooking a big hive post ! This is a great one, many possibilities are opening to the HIVE community to onboard other users.

We know the hidden gem which is Hive but many outside still believe their own small token is the key (to be rich for most of them).

Let’s continue our journey, people will notice and get hooked eventually 😉

Yes yes and yes...with the present capabilities on Hive, they might come now or later, but they will come....😅

Many thanks @hodlcommunity

the excitement don't seem to tell on the price of Hive token just yet.

This is unbelievable. There are many useless coins anouncing a copy-cat action and pumping %xx percent but Hive is still stable 😑

😂😂I know riiight! And I find it funny....but I'd always appreciate a steady growth to a quick pump and dump....A pump is nice if it will stay so, I hate the dump that usually follows right after. How many of those useless coins stay pumped? Almost none....

Nice post bro, well put together for those of us that are trying to wrap our heads around Wrapped Hive. With all going well we could see Hive appreciating in value from this development.

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Thanks bro....this is even just one of the examples that Wrapping hive brings, imagine the ones I don't even know about,...there are also lending platforms where this is applicable, its mad o....lets wait and see how the price reacts when the protocol is fully launched and people start using it....

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There is a promising outlook to this project, interesting days ahead.

Another quality WHIVE post I've come across on the stream today. The possibilities that this opens up around using your HIVE as collateral for a loan, is very exciting.

We've still got a long way to go, but it's another real world use case for HIVE. We just keep building here, don't we!

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Another quality WHIVE post I've come across on the stream today. The possibilities that this opens up around using your HIVE as collateral for a loan, is very exciting.

I was even wowed when I saw the other post made by Cardboard...it went into more details and the techy aspects of it.

We've still got a long way to go, but it's another real world use case for HIVE. We just keep building here, don't we!

One we've been waiting for quite a while now. Buidl to the top

It is cool to a synthetic asset of Hive on Ethreum.

Only if Eth holders know what they can do with Hive

This is a marketing issue to educate people on what you can do with it. ;)

Promising project

No doubt about that!

Thanks for the infos, @mistakili! 🙏
Since no one gives anything for nothing: what could be the negative aspects of this game?

You are welcome...Glad you found it interesting.

As regards the negatives, I'm yet to find any, since its basically not totally free, borrowers will pay some amount of interest as they repay their loan.

Well, we'll see what happens.
!BEER & cheers! 🍻


Hey @mistakili, here is a little bit of BEER from @amico for you. Enjoy it!

Learn how to earn FREE BEER each day by staking your BEER.

Not sure if wHive will be the game changer but I'm sure this will add new possibilities to the Hive chain, some of which we can't even imagine yet.

Well...its a major use case for holding Hive tokens that we've not had before.

Imagine that holders don't have to send all their Hive to the market to take care of immediate needs anymore, they can rather take a loan off it, locking it for several months, while their immediate needs are sorted out with the loan. Eventually they get to pay back the loan and retrieve their Hive.

If there's one major advantage I can foresee, it reduces the influx of Hive tokens into the market, which reduces the amount of Hive in circulation, as long as Hive holders are willing to play the game.

If more tokens are locked through Hive power and through collateralization, it makes the tokens scarce compared to how it presently is. And as long as others are willing to buy, it will positively impact the price.

Just my thoughts

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