Steem (STEEM)
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18 March 2020

OnChainFX Alert: Steem community plans a hard fork to cut out Tron-owned Steemit

Members of the Steem community have planned to launch a new network, called Hive, this Friday to act as an alternative to the embattled Steem blockchain. As a fork of its Steem predecessor, Hive will airdrop its native HIVE tokens (as well as Hive Dollars) to all existing Steem accounts; all except for those associated with Steemit Inc., the content distribution app now owned by the Tron Foundation. The new chain will also feature an update to Steem's on-chain governance system, which will require users to lock-up their tokens for 30 days before they can participate in governance votes.

STEEM price has spiked since the Hive announcement. This price increase is reminiscent of other coins leading up to a network fork, as users attempt to capitalize on the promise of "free" airdrop payouts. But most tokens (not all) see a significant decrease in investor and user demand post-fork.

Why it matters: - The split stems from an ongoing battle between the Tron Foundation and the Steem community. After Tron purchased Steemit last month, Steem witnesses (akin to validators) voted to remove the governance rights from Tron's newly acquire STEEM tokens as a "protective measure." Tron reportedly retaliated by coordinating enough support to reverse these governance restrictions. The concerns over network centralization pushed the Steem community to move to a new chain. All told, this timeline of events represents one of the cautionary tales of Delegated Proof-of-Stake (DPoS) systems, as they are susceptible to the formation of cartels that can undermine the decentralization of a network. - Since Hive will be backward compatible with Steem, the new chain will contain all of the data, including Steemit blog posts, previously deployed to the Steem network. As with any blockchain platform, nobody owns the data, which enables users and projects to fork away from an undesirable situation without losing the core information necessary to relaunch on a new platform.

Over the weekend, Tron founder Justin Sun announced a loan platform called Djed that is nearly identical to MakerDAO but built on Tron. Similar to its predecessor, Djed will be creating a crypto-backed stablecoin through the opening of a Collateralized Debt Position (CDP). The protocol will also foc...
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