Honey is a community currency issued and distributed by the 1Hive community.
Honey is at the heart of everything we do, by optimizing how we issue and distribute Honey we can grow the 1Hive economy, reward contributors, and expand our community.
The value of Honey is determined by supply and demand. The supply is managed by a policy and demand can be influenced by participating in the process of staking on proposals which allocate and distribute Honey from the common pool to contributors.
If participants allocate Honey productively, inflows to the common pool will eventually exceed outflows, demand will outpace supply, and the value of Honey will increase. Conversely if Honey is allocated unproductively the circulating supply of Honey will increase without a corresponding increase in demand and the value of Honey will decrease.
Simplified Honey Stock and Flow Diagram
One way to think of this system is as a cybernetic feedback loop where stakers are sensors, the protocol is the controller, and proposals are the actuators that impact the environment. The impact of proposals may be uncertain and may change over time, but outcomes will be observed and feed back into the system resulting in adaptation to the environment over time.
Increasing the value of Honey is an implicit goal of the system and its participants. Stakers must hold Honey over time to influence proposals and therefore have a vested interest in supporting proposals that maximize the value of Honey, and contributors need Honey to be valuable so that their contributions can sustainably rewarded.