We keep getting a few tidbits coming out about the **SpkNetwork**.  As this happens, the potential for Hive keeps growing.  Understanding how some of the different pieces are going to operate is paramount to seeing what will take place.  This is especially true at the core level.

For months, we discussed the **Service Infrastructure Pool (SIP)**.  It is a new concept that is going to radically alter the path of cryptocurrency.  We are going to see an entirely new model of funding introduced which also provides value to an existing token.  Soon, the days of burning tokens will be obsolete as it is literally torching money.  The SIP instead focuses upon growth while also putting existing value to work.

<center>![image.png](https://images.hive.blog/DQmb3HtRufRHYbBUkXsRcPzzdzcLqRfp22PLFqUmgqqJyg5/image.png)</center>

What makes this so revolutionary is the fact that it is going to lock up a lot of Hive.  This will also be used to offer a funding mechanism that can, at the community's discretion, be used to advancement of the entire ecosystem.  

To understand the power this is going to provide, we need to see how it will work.

### LARYNX Token

The most recent [podcast of Community Token Talk](peakd.com/hive-181335/@theycallmedan/xpkupbdz) provided us with a few more tidbits as to what will be implemented.

According to [Hiveblocks](hiveblocks.com), the current supply of Hive is as follows:

<center>![hivesupply.png](https://images.hive.blog/DQmdTk7vxVS57JLS6c9YiuKKPnWvRwXNoaAmQPdCoNzBDyU/hivesupply.png)</center>

As we can see, there is just shy of 357 million Hive at the moment.  This can obviously change but the important point is there is going to be a 1:1 claim drop to those holding Hive (not sure if main exchange accounts will be eligible).  This means, if all tokens are matched, there will be just shy of 357 million LARNYX mining tokens issued.

The miners are not sold so there is nothing added to the *SIP** from the distribution.  This is how the **SPEAK** token is created.  We will see those holding HIVE start to accumulate this token as mining takes place.  

What changes the tokenomics a great deal is these miners lose power each year.  Thus, those with older miners will not see the same effectiveness as those who get newer ones.  How are new miners acquired?  They have to be purchased.

This is the activity that starts to fill up the SIP.

### SPEAK Token

Here we see what is produced by the miners.  The SPEAK token is where the **governance** for the system comes from.  Individuals with this will have stake in the system and be able to influence decisions based upon their holdings.

Obviously, the more miners one has along with how recent they are, the greater the chance of getting SPEAK tokens.  Here we see how people are incentivized to keep investing in LARYNX miners on a consistent basis.  Every year or two, those who are serious about the platform will want to upgrade at least a portion of their miners.  

We found out a few new items in the latest podcast.  One of them is a previously unannounced **SPEAK tax**.  This is incurred each time someone moves a SPEAK token.  The idea is for people to stake SPEAK and leave them.  This helps with the stability of the system.

Each time SPEAK is moved, a small tax is applied which is then sent to the LARNYX tokens that are staked.  It is another to reward those who stake miners, helping to enhance network security.

### Positive Economic Loop

The result of all this is there is an economic loop that keeps growing.

People are incentivized in two ways to hold LARNYX tokens.  Since they diminish in effectiveness, people have a reason to keep investing **HIVE** into the network.  Each time this happens, it is locked in the SIP, removing it from the open market.

What we see is a reversal of the early adopter situation.  Those who get in early benefit for a year or two.  However, as newer, more powerful miners come to market, those who upgrade will end up getting a larger portion of the "tax revenue".  Again, the incentive is there to keep the network strong.

A major benefit to this is that, each day, people are going to be investing HIVE into the SIP.  There is no other way to pay for the LARYNX.  Those who are most interested in maintaining the network receive more of the rewards.

Here is where it gets very interesting.  The purchase of LARYNX is an auction based system.  Each day, whatever number of tokens are available is bid upon.  Hence, the totality of HIVE spent can vary.

For example, let us presume on the first day, two people bid, one putting up 90 HIVE the other 10.  Thus a total of 100 HIVE enters the SIP for the LARYNX offered.  We can easily see how the miners are split.

Now, on the second day, another gets involved.  The people from the day before bid the same amounts.  However, the new person puts up 900 HIVE.  This means that person get 90% of the miners with the other two getting 9% and 1% respectively.

We can see that even though the number of LARYNX might be the same, the money that flowed into the SIP did a 10X.  Over time, **as the network gains in value, the daily bidding should increase**.  This will start to lock away more HIVE as time passes.

### Network Value

It is evident that **increasing the value of the network** is imperative.  This comes through growth and activity.  As more applications are developed, we see the ability for users to engage with the different aspects of the platform.

At present, @threespeak is the only application we can see being offered when things go live.  However, just because we cannot see something does not mean it is non-existent.

Another tidbit dropped in the podcast is the fact there are **a few more applications that will be available when the network goes liv*e*.  No further details were provided yet we see that it will be more than a one-trick pony.

Of course, there are many facets to what is being developed.  What started as **decentralized video storage** is now much expanded.  We are going to see a protocol that enables a wide range of services such as DeFi, image storage, NFT creation, and token generation.  All of these features will feed into growing the network both in applications and users.  Naturally, this should equate to move value being driven there.

What does this do for the governance token?  We can only speculate but it likely will increase the demand for it.  After all, those communities and businesses who are part of the ecosystem will want to have a say.  While direct purchase is one option, the other is the mining.  This sets off the entire process described in this article.

Basically, hundreds of millions of LARYNX miners are going to require upgrading every couple years.  How much HIVE will be needed to upgrade all of them?  Will they go for 1 HIVE each?  Half?  A third?  It is impossible to say.  What we do know is that the more value on the network, the higher the price is.

Just this aspect of the network alone is going to **lock up millions of HIVE in the SIP**.  We see the discussion about the need for decentralized social media and DeFi services that are outside the reach of regulators.  It looks like the SpkNetwork is a protocol that will enable this.  As more applications are produced, individuals are going to be able to move away from the controlled environment that we presently see.  

In conclusion, this is going to be an enormous sink for Hive.  The token is going to find its way into the SIP and immediately start going to work, generating more revenue.  Through the transaction fees within the liquidity pool, other ventures can be funded.  This completes the cycle since we how have a decentralized, self-funding apparatus that is controlled by the community.

As they say, then it is a matter of rinse and repeat.

Couple this with the other advancements such as Splinterlands recent success and the need for Resource Credits and we can see how Hive is going to encounter a liquidity problem.  This means that the is only one direction for things to do on the open market.
___
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