Economics

Hyve H3’s economic model separates operational speed from economic security, creating cryptoeconomic guarantees through Ethereum finality. The system coordinates five key components:

1. Hierarchical Consensus - Operational speed with economic finality
2. Staking & Collateral - Ecosystem-aligned proof of stake
3. Fee Collection - User payments for storage services
4. Reward Distribution - Performance-based operator compensation
5. Penalties & Slashing - Economic enforcement of protocol rules

This architecture leverages Symbiotic  on Ethereum as the ultimate source of truth, while the Liveliness Layer handles high-throughput operational consensus.

Hierarchical Consensus Model

Hyve employs a two-tier consensus system that optimizes different layers for different purposes.

Operational Consensus

The Liveliness Layer provides fast consensus on data availability and blob inclusion:

• Processes thousands of operations per second
• DAG-based consensus protocol
• Immediate user-facing finality
• Generates availability certificates

Economic Consensus

Ethereum provides ultimate economic truth through Symbiotic smart contracts:

• Handles all payment settlement
• Executes slashing and rewards
• Provides governance authority
• Delivers cryptoeconomic security guarantees

This separation enables sub-second operational decisions while maintaining Ethereum-grade security for economic outcomes.

Staking and Collateral

Operators participate in Hyve H3 by staking collateral through Symbiotic vaults on Ethereum.

Collateral Model

Hyve uses ecosystem-aligned proof of stake, accepting multiple collateral types:

Primary collateral (mainnet launch):

• wstETH (Lido’s wrapped staked ETH)
• Capital efficiency: Delegators earn ETH staking yield while securing Hyve
• Security: Inherits Ethereum’s economic security
• Simplicity: Single, widely-adopted liquid staking token

Future collateral options:

• Additional LSTs and ecosystem tokens
• Cross-chain collateral for ecosystem alignment
• Risk-based collateral tiers

Vault Structure

All economic activity occurs through Symbiotic vaults:

Vault properties:

• Smart contracts on Ethereum
• Hold collateral and manage staking
• Execute economic outcomes (rewards, slashing)
• Permissionless participation post-mainnet