Imagine if the Facebook community got so sick of Mark Zuckerberg that they decided to copy the code for the site, then run a version of it themselves. And imagine if the new site outperformed Facebook within a week, despite Zuckerberg’s billions.
That story played out in blockchain-world this week when the token of Hive, a community-led fork of blockchain-based social network site Steemit, outperformed its ancestor.
Just a week after the launch of Hive, the platform’s native currency is already worth almost twice those of the blockchain network that houses Steemit, which is still mired in controversy after its bungled acquisition by the flamboyant CEO of TRON, Justin Sun.
On March 27, HIVE tokens peaked at around $0.336, according to crypto metrics site CoinGecko. At the same, STEEM’s price hovered at roughly $0.168—almost half of that. While the gap narrowed on Saturday, Hive is still outperforming Steem—the tokens are trading at $0.248 and $0.151, respectively.
Notwithstanding the price bump, Hive still has a ways to go to reach the volume of the Steem blockchain. HIVE’s trading volume reached a little over $90,000 over the last 24 hours—dwarfed by STEEM’s $3.2 million, according to data from CoinGecko.
Steem: The story so far
Steemit was acquired by blockchain network TRON in February. Yet, many users didn’t trust the new owner, TRON Foundation CEO Justin Sun.
When Sun bought Steemit, he was entitled to around $12 million worth of pre-mined tokens on the network—an estimated 20% of the total supply of STEEM—that allowed him to steer the blockchain’s direction. Sun’s grand plan was to migrate Steem tokens to the TRON blockchain.
To curb Sun’s authority, the community voted in favor of a soft fork that prevented him from using his newly-acquired tokens. In return, Sun called those who voted against him “malicious hackers,” who had violated the “sanctity of private property.”
Things came to a head when Sun asked major crypto exchanges, including Binance and Huobi, to help him revert the lock-up. Crypto exchanges have an immense amount of influence on the network, which they used to help Sun to overthrow the democratically elected leaders of the network and replace them with TRON-controlled sock puppet accounts.
Binance and Huobi later reversed their decision, and the community rallied to topple Sun’s sockpuppet accounts. But in the end, some users had enough of Sun and launched Hive—a hard fork of Steem that duplicated the network as a stand-alone chain. Perhaps they realized that the wealth-based arms race against the incredibly rich Justin Sun was pointless.
When Hive launched, it let people migrate their Steem tokens to the network. But it didn’t let any of Sun’s supporters migrate their account, and Sun can't move his pre-mined tokens over to Hive, either.
Let’s work things out
As the community-led network gets traction, the Justin Sun-led Steemit is trying to win users’ trust back to slow down the exodus. In a recent blog post, it promised to “put governance back in the hands of the community as soon as possible,” and that it is “committed to Steem for the long-term and plans to bring more value to Steem than ever before.”
The company also acknowledged it was censoring posts related to the Hive hard fork:
“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,” the post reads, defending the company’s actions.
Pretty cool scrolling through the #HiveIsAlive hashtag on Twitter.
Have you seen a crypto with this much activity lately? This is with a brutal 2 year plus beat market!
I believe projects this hungry will capitalize the most in a new bull market.
— They Call Me Dan (@TheycallmeDan_) March 27, 2020
Hive’s price boom suggests that the community is unconvinced by Sun’s big business brain.