Power downs

In the last months I've seen a clear and worrying trend on Hive. It is a structural pattern that we can see in the weekly reports from @hivetoday. Every week there is more power down than power up. A lot of this Hive ends up leaving wallets via exchange accounts. When there is a lot of supply and not less demand, the price goes down. And this is what we see happening for a long time.
I don't say this is the only reason for the low price of Hive, but it surely is one of the reasons.

Extraction of Hive

I mentioned above that a lot of Hive rewards from users are leaving Hive through exchange accounts. This is something I've looked into recently. I've made my own tool to give an insight in the Hive being sent from specific accounts. This tool was implemented into the Hiveraven tool (https://hiveraven.vercel.app/health) by @gwajnberg

Another tool that shows this is the flow visualizer from @forkyishere (https://hive-transactions-flow--forkyishere.replit.app). It shows the same picture. Large amounts Hive moving to exchanges.

Why should we care?

Hive is a social chain. The value of the chain depends on the strength of the community. When many users treat Hive only as a place to take rewards out the token and the entire chain becomes weaker. Less stake means less voting power. Less voting power means less support for creators. Less support means less creators. It could slowly kill the platform.

And yes, I know everyone can do with their rewards what they want. It's the rewards they earned themselves... And yes, I know some people desperately need to extract some Hive to pay for their expenses, sick family members, or have other good reasons to extract rewards. But this surely is not the case for everyone that is mass extracting Hive at the moment.

What can we do about it?

We can't do anything about the extraction of Hive by itself. Every Hiver decides what he or she does with the rewards they earn. But what we can influence is who receives rewards. We are the ones upvoting posts that decide which ones get the most rewards. I really think we should be paying more attention who we are giving our upvotes.
If more people stop upvoting people that mostly extract hive, the amount of Hive being extracted will go down. This will result in less Hive on the exchanges, which should have a positive impact on the price.

Ok, but how to do this?

There are several ways to check the accounts of the people you upvote frequently. When you frequently check your following feed for curation, it might be a good thing to take a closer look at the accounts that are on that list.
Here are some things you can check:

KE

When you go to a users profile page in PeakD, it shows a value called KE.

If I'm correct, the KE figure is the total amount of earned rewards divided by the current amount of staked Hive in someone's wallet. A KE of 1 means that the Hiver has exactly the amount earned rewards in their wallet. My KE of 0.51 shows I have more Hive in my wallet than I earned on Hive.
The higher the number, the more Hive rewards have been moved from the account.
A KE of 10 means the user has extracted 10 times the amount they have in their wallet.
A very high KE shows someone has been extracting a lot of Hive, so it might be interesting to look further into.

HiveRaven account health

I already mentioned the HiveRaven (https://hiveraven.vercel.app/health) tool before. With this tool you can lookup a lot of stats from any account including the aforementioned KE, but also comments and outgoing transfers.
In the following screenshot you see an account that has a huge KE, so has extracted loads of Hive and it had made no comments in the past 7 days.

This account hasn't done any extraction in the past 30 days, but did extract a lot in the past (and probably will extract more in the future).
When the user did extract Hive in the past 30 days, a list of outgoing transfers with recipients is shown under the dashboard. It shows the amount, recipient and if it's an exchange or swap service.

You can also check the incoming Hive on these exchanges (like orinoco) to see who else is sending large amounts of Hive to this account.
You might be shocked when you see the amount of Hive being extracted from there.

Curation services

A large part of all Hive rewards is distributed by big stakeholders and curation services. Their votes shape the platform more than any single user can. Because of this large influence it would help a lot if these services also keep an eye on extraction behavior.
But I also understand that this is not easy. Checking accounts takes time and how do you keep track of it? I experience the same issue as a curator for my own Topcomment curation project.
And I don't have an 'out of the box' solution for it. Maybe some representatives of curation services like could join the discussion to find a solution for this problem (if they agree this is a problem 😉).

I did suggest before that adding some stats next to the username in the feeds would help. Now it's only the reputation, which we probable all agree, doesn't say much. If we could see the KE or something that shows if someone extracted a lot of Hive, that would really make curation easier.
But one of the responses was that it would make the front-end very slow.
But if anyone has any other ideas, please share them in the comments.

Questions for the community

I've been thinking about creating this blog for a long time, because I really think we as a community should act to supporting the people that are here for the community.
I think it is good to open the discussion on how to combat this problem. That is if we think this is a problem.
That's why I want to open the discussion in the comments.
Here are some questions....

Do you also see the large extraction of Hive as a problem too?
How do you deal with accounts that extract a lot of Hive?
After reading this blog, would you put effort into limiting extraction?
What else can we do as a community to reduce down the extraction of Hive?

It might be a nice point to discuss in one of the upcoming @hivethrive shows.

When you have come this far, thanks for reading.
I hope you will share your thoughts in the comments.
And if you want this subject to get more attention too; reblogging helps creating visibility 😉

Friendlymoose