A few days ago a news article had been released in Korea, announcing the official partnership between the HUNT platform and Lambda256 (Luniverse Blockchain as a service). I would like to get into the story of the startup behind the platform HUNT, how to startup on the Steem Blockchain and what this partnership means.
0. Background
The team and startup behind Steemhunt and the Hunt platform is coming from a traditional startup and cooperate background. After starting to realize their idea to give the original Producthunt platform an upgrade and going back to the roots of ranking cool products, they bootstrapped Steemhunt for over a year with the support of Steemit Inc. 's delegation of 1 million Steem Power and from their personal budget. From May 2018 there have been more than 80K products reviewed, shared and ranked, which shows the immense success of Steemhunt.
1. Running a community-based project on Steem
When you start a business that is based on the Steem blockchain, you will have to get familiar with the community at Steem and also about different kinds of rules based on Proof of brain (POB). Staked Steem Power(SP) gives you the possibility to distribute Steem from the reward pool. Compared as an example with Bitcoin, where you need a lot of hardware power to create Hashpower and running a node to be able to get rewarded in Bitcoin, Steem has also a reward pool that comes from staked Steem Power.
The project Steemhunt was able in 2018 to get the attention of Steemit Inc. and a delegation of 1 million Steem Power. Including other delegations, Steemhunt was able to distribute based on a voting power of about 1.7 million Steem Power, which was on a higher Steem price about 2500 USD rewards per day.
These high rewards attracted a lot of Steem users to the platform and also started the rally of abusers to milk the system. The team needed to start a few month-long battles with these abusers to adapt and develop a system to stop this behavior. Steemhunt has now one of the most sophisticated anti-abusing systems available.
But the real difficulty came with the bear market, which had been affecting all kinds of Blockchain projects on the market. The general active user base was shrinking, not only for Steemhunt but in general for Steem. Not only the users but also Steemit Inc. had its backslashes and needed to release about 70% of their staff, which backfired the development of SMT. Source
Nonetheless, the team decided to move on even in a bearish market with an IEO and launched the ERC-20 based HUNT token on the Daybit Exchange. The IEO had been successful and the team was able to gather funding to move on developing the HUNT platform.
2. Delegated Steem Power is not a Business model but only a non-accessable marketing fund.
If you are preparing a business based on the Steem blockchain, POB is a very powerful tool to increase the awareness of your project between Steem users. But if you understand the specifics of how the Steem economy works, you will have to understand that any kind of delegated Steem will not directly convert into a direct income to run your project. The team behind the Hunt platform is running Steemhunt as a company and a full-time project. It means that the business's purpose is to generate income to be able to run the service. Delegated Steem Power does not create any income unless you are going to power-down and sell your Steem Power. Let's see how Steemhunt used the Steem Power.
- Rewarding users based on the ranking and internal levels
- Curation reward (started with 25%, now 50%) is getting rewarded also directly 100% in Steem Power.
- Steem Power needs 13 weeks to gets fully un-staked.
- Steemhunt staked most of the curation reward (93%) and used part of it for distribution to delegators or for marketing purposes.
As you can see, as long as there is no funding from the outside, delegated Steem Power is a great tool for marketing your project but not directly useable as a business model for your project. At the end, you will need fundings either from customers or from investors.
3. Reaching users
The biggest strength that the Steem blockchain can offer is the community behind it. With a good product, marketing plan and a reasonable amount of (delegated) Steem Power, it is possible to have in a short amount of time a high number of user engagement, which has already a deep understanding of the environment of a blockchain and the rewarding mechanism. The bigger the Steem community is, the bigger the chance that your niche is going to have sophisticated users investing either time or money on your project.
A very good example of a Steem based project is also Splinterlands (
Source: Untamed Kickstarter
Due to the bearish market, the general number of Steem users has gone down under 3000 active accounts, but for a few months, Splinterlands has more active accounts on their platform than Steemit.com itself.
Source: StateoftheDapps
It means that more active users are using the Splinterlands platform than Steemit.com. One point needs to be mentioned here, as the Steem Social Media Front is not only available from Steemt.com but also from different other condensers like busy.org or Steempeak, etc.
For Steem itself it is a very positive effect that more and more projects are leveraging the Steem blockchain to run their projects. But if we go into details, it is also an invisible barrier for any kind of Steem project, as it is going to need onboard new users on Steem to grow the project.
a. Direct onboarding
Steemhunt has one of the most convenient and easiest Steem onboarding system developed, that includes a 2-month min. Steem delegation. It reduces the hassle for an account for the Steem blockchain which is, in reality, a very high barrier for new users outside the Steem economy to onboard.
This is the most direct way to increase the account numbers for the Steem blockchain.
b. Indirect onboarding
An indirect way of onboarding is to expand the economy outside of Steem and bring active users to the chain. Splinterlands has already expanded to the Tron chain and it could be not the only chain Splinterlands is expanding. The biggest advantage of this strategy is, that you are targeting an audience that is already used to Blockchain technology and terms. In most cases, also this audience is used to invest in cryptocurrencies.
The Hunt platform is also already running a multi-chain project, as the HUNT token itself is currently an ERC-20 token, which is planned to be swapped to a Luniverse based token.
4. Meaning of partnering with other chains
There are several beneficial facts about the Steem Blockchain and some hard facts are like below.
- Only chain to develop based on Proof of Brain
- Fast and almost free of charge use of Chain (Based on Resource Credits coming from Steem Power)
- One of the strongest Blockchain community
Related article link
One downside of Steem is that Steemit Inc.'s main revenue source is selling its liquid Steem on the market which results in an endless spiral of price pressure on the cryptocurrency Steem. Additionally, the only way to for Steemit Inc. to push Steem based projects is delegated Steem, which is great as a marketing tool within the Steem community but also limiting the possibilities to outreach the Steem economy (and increase the user base for a project)
On the other side, there are blockchains and projects that have fundings and also influence the cryptocurrency market that can help a project to get more visibility and also reach more users.
It can start from direct funding to connecting the right contacts and could also mean help to find the right partners for business extensions like increasing the direct user base or listing on exchanges.
5. Halo effect
All these kinds of partnerships will have halo effects on each other. Dapps are going to leverage the benefits from each chain for their projects and users. As multichain Dapps are tending to give exposure for all kinds of chains they are using, it will help to increase the visibility not only for the Dapp itself but also for the chains that are onboard of these Dapps.
6. Personal thoughts
The real use of Blockchain technology will come with the usage of Dapps that will surround our daily life. Blockchain is going to be an underlying technology like we use HTTP without knowing it. The first Killer App for HTTP was E-mail and the revolution came with E-commerce followed by different fields of businesses.
As Blockchain technology comes today together with decentralized financial structures, the struggle from the current world is even higher than we had it from the E-commerce wave, but I am sure that the change has already started and it is going to be adapted even faster than E-commerce has.
Many Steem based projects are showing the first view of the future we will see in Dapps based on Blockchain projects and I think the Hunt project is on a good way to create a successful path for following projects, "How to startup on Blockchain."