Proposal Account: @magi.network
Daily Ask: 900 HBD/day (22% reduction + a revenue based reduction towards $0 USD)
Vote here: https://peakd.com/me/proposals/378
What Magi Is And Why Hive Needs It
For the first time in Hive's ten-year history, there is a protocol-level mechanism that creates new, mechanical demand for Hive assets from outside the Hive ecosystem. Not speculation. Not marketing. Not hoping for the altcoin market to recover. Structural demand baked into how cross-chain swaps work.
Magi aims to fulfil 3 important goals that we feel as Hivers should be more present (where possible) with DHF funded proposals:
- Revenue generation
- Self-Sustainability
- Structural Hive and HBD demand generation
At this point in time BTC-HBD and HIVE-HBD liquidity pools are live on Magi Network, accessible through Altera, Magi's flagship DeFi application.
Not wrapped Bitcoin. Not a synthetic. Not a custodial bridge token. Real, native Bitcoin sitting on the Bitcoin mainnet, swappable through decentralized pools built on Hive's Layer 2.
Every pool pairs against HBD. Every multi-hop swap routes through HBD. As cross-chain volume grows, BTC to DASH, USDC to BTC, USDC to HIVE, BTC to HIVE, ETH to BTC, ETH to HIVE, eventually dozens of asset pairs demand for HBD scales proportionally. And because HBD is backed by HIVE, that demand flows directly into the HIVE economy.
This is the flywheel Hive has never had. Every external user who touches Magi generates value for the Hive ecosystem whether they know it or not.
The Fourth Protocol Ever to Do This
Out of thousands of protocols in crypto, only four have shipped TSS-based custody for native Bitcoin in production cross-chain swaps, where real BTC is held and transferred without any wrapped token at any stage:
| Protocol | Architecture |
|---|---|
| THORChain | Cosmos SDK, RUNE settlement |
| Chainflip | Substrate-based, 100-of-150 threshold |
| Maya Protocol | THORChain fork, CACAO settlement |
| Magi | Hive L2, HBD settlement, WASM smart contracts |
Every other "cross-chain" protocol either wraps Bitcoin into an ERC-20 or uses centralized custody. The reason so few ship native BTC swaps is because the engineering is brutally hard, distributed key generation, multi-round signing ceremonies, key rotation without fund migration, UTXO tracking, SPV verification, all under adversarial conditions. Most teams assess the complexity and ship wrapped tokens instead.
Where there were only three, now there are four. Magi is the only one built on Hive.
Why This Architecture Matters
Your "wrapped" BTC on Ethereum is a promise from one entity with one key. Cross-chain bridges have lost over $2.5 billion to hacks, Ronin ($625M), Wormhole ($320M), Nomad ($190M), Harmony ($100M) almost always because a single private key or a small multisig was compromised. That's the custodial model. One key. One target. One hack. Everything gone.
Magi doesn't work that way. There is no single key. No custodian. No recovery account. Threshold-signed custody across an elected validator set means no single party can move funds. The Bitcoin network sees a completely normal transaction, no idea independent parties cooperated to produce the signature.
Eliminating Hive's CEX Dependence
The fear of exchange delistings has hung over Hive for years. Every time an exchange reviews its listings, the community holds its breath. That dynamic exists because Hive's liquidity has been almost entirely dependent on centralized exchanges deciding to support it.
Magi makes their listings irrelevant. The protocol doesn't care about listing requirements, trading volume thresholds, or compliance reviews. It's infrastructure. It runs because validators run it.
Every new chain Magi integrates is another on-ramp path. Each new chain means another path to reach HIVE, and the harder it becomes for any single point of failure to cut off access.
Hive becomes self-sufficient not because it doesn't need liquidity, but because it does not rely on anyone other than itself.
The Magi App Layer - Every Wallet, One Platform
The next killer app in crypto won't come from a protocol that's cut off from the rest of the ecosystem. It will come from one that connects them all.
Magi's application layer does something no other Hive infrastructure has ever done: it lets Bitcoin wallets, EVM wallets, and Hive wallets interact with the same app layer at the same time. A user with Leather signs a BTC transaction. A user with MetaMask signs an ETH transaction. A user with Keychain signs a Hive transaction. All three using the same liquidity pools, interacting with the the same application.
This is wallet interoperability at the protocol level. A single application layer where users from different chains show up as first-class participants with their native wallets, their native assets, and their native signing experience.
For developers, this changes the math completely. Building on Magi means your app is instantly accessible to Bitcoin users, Ethereum users, Hive users, and every future chain Magi integrates. Your addressable market isn't one chain's user base, it's all of them. Liquidity from multiple ecosystems flows into your application without your users needing to leave their wallet or learn a new chain.
For Hive, this is the unlock. Hive applications are no longer limited to Hive users. Every chain Magi connects becomes a source of users, liquidity, and activity for apps built on Hive's Layer 2. The barrier between ecosystems disappears and the builders who show up first capture the network effect.
What We Built (Live+Testnet)
Everything below is built, live, or in final testing. All publicly verifiable on GitHub.
- Native Bitcoin Swaps — Live on Mainnet.
Real BTC, real swaps, real liquidity pools. Non-custodial. Trustless.
Read the announcement - 6 Chain integrations ready — BTC, EVM, LTC, DASH, DOGE, BCH.
Same custody infrastructure, same signing protocol, same security model. - Altera — Complete App Rewrite, Live.
BTC wallet sign-in. Wallet-signed deposits. Multi-hop routing. QuickSwap with live pool math. Not a reskin a whole new application.
Try it: altera.magi.eco - Token Ecosystem — Live.
Fungible tokens and NFTs deployable by anyone on Magi today. Mintable, burnable, pausable, with soulbound token support. The foundation for DeFi, gaming, and community projects on Hive L2.
Read the announcement - Magi SDK v1.0 - Ship a DEX on Your Site in 10 Minutes.
Embeddable cross-chain swap widget. Any Hive frontend can become a cross-chain liquidity aggregator overnight. One component, your referral address, done.
Read the announcement - EVM / Ethereum Integration - Proven on Testnet.
Deposit ETH and USDC into Magi, swap for any asset, withdraw back to Ethereum. No wrapping. No custodians. The largest pool of on-chain liquidity in crypto, connected to Hive. Targeting release alongside DASH and ZK proofs.
Read the progress update - ZK Proof System - First of Its Kind.
Zero-knowledge proofs of Ethereum consensus verified on-chain. Instead of every validator running a full Ethereum node, one prover generates a cryptographic proof and every validator verifies it instantly. To run validators on other equivalent protocols to ours the cost to run them is 2-3k USD per month in hardware alone, with ZK proofs we reduce that to $0 USD. - Passkey Wallet + ZK emails + Email-to-Email Payments.
Sign in with Google. Generate a passkey based wallet. Send HBD between email address even inside the email body. Recipient clicks a link, signs in, funds arrive. No seed phrases. This is how Magi reaches users who have never touched crypto. - TSS Reshare — Fixed from the Ground Up.
The cryptographic backbone that makes everything else possible. The largest merge to mainnet in project history — 301 commits, 234 files changed. Reshares completing on schedule, every epoch.
Read the full development update - Incentive Pendulum — In Development.
The validator fee distribution mechanism. Validators earn directly from swap fees and other sources. This is the unlock that major LPs are waiting on before committing deeper liquidity. In active review.
A Note On This Proposal 🦋
Magi has undergone a leadership transition. Magi previously operated under a different organizational structure. Damir Rogošić (@lordbutterfly) has stepped into the project lead role, while the previous team lead, Vaultec has transitioned into a technical and BD capacity. This transition does not change anything in relation to our promise to the Hive community. We believe it showcases our determination to optimize our operation and deliver everything we set out to do.
The leadership transition in terms of internal structure has already happened about 3 months ago. In the 75 days since the leadership transition, the team has delivered:
- 560% increase in net code output
- 600% increase in PR shipping rate
- 400% increase in core infrastructure throughput
- 1,100% increase in multi-chain development
All of it verifiable on the vsc-org github.
What happened in those 75 days:
- Mainnet launch of TSS, fixed and hardened - live
- Native Bitcoin swaps — live
- 6 chain integrations code ready — EVM, BTC, LTC, DASH, DOGE, BCH
- Complete Altera app rewrite — live
- ZK proof system — proven on testnet
- Token and NFT contracts — live
- Embeddable SDK — live
- Passkey wallets and email payments — built
- TSS reshare — operational
- 8 full security audits across core node, DEX, UTXO mapping, EVM bridge, ZK verifier, passkey system
- DASH partnership secured
- 250+ merged PRs across 15 repositories
Every line of code, every security fix is publicly verifiable on GitHub.
Budget — 900 HBD/Day
The current VSC/Magi proposal asks 1,151 HBD/day. We are asking for 900 HBD/day — a 22% reduction to maintain solidarity with other DHF proposals that reduced their proposal asks with the same team and dramatically faster execution. But we will not stop there. Considering our aim is self-sustainability we will be reducing our proposal all the way to zero USD as we enter revenue generation. We need community funding right now to get to that point.
We in no way intend for Magi to be "a forever DHF proposal" and maximum effort will be put in, so that does not happen. We want this proposal to reflect that.
| Current Proposal | This Proposal | Difference | |
|---|---|---|---|
| Daily ask | 1,151 HBD | 900 HBD | -22% |
| Annual cost | ~420,000 HBD | ~328,500 HBD | -$91,500/year |
The Core Team
@lordbutterfly
@vaultec
@milo-hpr
@techcoderx (community contributor)
@disregardfiat
@yozen
@tibfox
The budget covers developer and team wages, server infrastructure, GPU compute for ZK provers, AI development tooling and business development for chain partnerships and aggregator listings.
| Cost Item | Monthly | Annual | Notes |
|---|---|---|---|
| Node infrastructure | $150 | $1,800 | ~$50/node (increases with intergations) |
| ZK prover GPU compute (2 provers) | $600–$1,200 | $7,200–$14,400 | $300–$600/prover |
| AI development tooling | $800 | $9,600 | |
| Payment services & banking | $100 | $1,200 | Mercury + misc |
| US LLC maintenance & compliance | $83 | $1,000 | Annual filing fees |
| Miscellaneous services & tooling | $150 | $1,800 | |
| Infrastructure subtotal | $1,883–$2,483 | $22,600–$29,800 | |
| Core team compensation | $24000–$25000 | $288,000–$300,000 | Remainder of 900 HBD/day |
| Total | $25,800-$28,000 | ~$310,600–$329,800 | At 1 HBD = $1 |
Revenue-Based Reduction - A Commitment to the Community
Magi is making this commitment publicly and on-chain:
Once Magi generates consistent daily protocol revenue we will be reducing the DHF ask.
| Protocol Revenue | DHF Ask Drops To | Reduction |
|---|---|---|
| 33%+ (~300 HBD/day) | 600 HBD/day | -33% |
| 66%+ (~600 HBD/day) | 300 HBD/day | -66% |
| 100%+ (~900 HBD/day) | 100 HBD/day | -89% |
| 150%+ (~1,350 HBD/day) | 0 HBD/day | Full DHF exit |
The numbers presented are examples, the reduction might happen at earlier revenue thresholds or slightly later depending on when we find the protocol to be stable and in what ranges.
Revenue will be tracked transparently on-chain and reported in monthly updates. The community can verify the numbers independently. The sources of revenue will be the 25% protocol fee revenue from pools and the 0.25% base Altera fee on swaps.
DHF is a bootstrap mechanism, not a permanent subsidy.
Business Model - The Path to Revenue
Serve demand where no one else does. We don't need to compete for ETH-USDC volume on Ethereum, that market is saturated with single-chain DEXs. Magi operates cross-chain. There are thousands of tokens and protocols with active communities and real trading demand that have zero non-custodial cross-chain liquidity infrastructure. Billions in market cap sitting in ecosystems with no native route to Bitcoin or Ethereum that isn't custodial. These protocols aren't hypothetical customers, they need what we already built, and no one else offers it.
Integration as a service. Currently the plan for future chain integrations come with a minimum $50,000 - $100,000 liquidity commitment, 50% in HBD. Every new chain that connects to Magi creates immediate, structural HBD demand, their community must acquire HBD to seed pools.
Aggregator routing and affiliate fees. Cross-chain aggregators are constantly searching for new routes. Getting listed means volume flows in from the entire DeFi ecosystem, users route through Magi without knowing it exists. Every swap carries a configurable affiliate fee, so any frontend, app, or aggregator that routes through Magi earns a cut. Multiple interfaces compete on UX while the protocol earns on every trade regardless of who serves it. Volume in, fees accrued, HBD demand up.
Marketing that pays for itself. Every chain that integrates brings its own community. Their users market Magi for us because Magi is how they access cross-chain liquidity. Outbound effort focuses on aggregator partnerships and developer onboarding channels with direct revenue conversion, not vanity metrics.
What We Are Building Next
Immediate (0–60 days)
- DASH-HBD pools — infrastructure is complete, pool activation is next.
- ZK proof system to production — flaten validator hardware costs.
- EVM release — ETH and USDC deposits, swaps, and withdrawals. Targeting release alongside DASH or few days later.
- Incentive Pendulum activation — the unlock for major LP commitments we have.
- Fiat on-ramp / off-ramp — integration in Altera removing the need for CEX offramps.
Short Term (60–180 days)
- LTC, DOGE, BCH pool activation — the infrastructure is built, activation follows DASH.
- HP staking for validators — bonded HIVE earning, making Magi validation strictly better than raw Hive staking.
- Developer tools and documentation — templates, SDKs, and onboarding for third-party builders.
- Passkey wallet + email payments deployment — onboarding non-crypto users.
Medium Term (180+ days)
- Target for revenue being sufficient to begin DHF reduction steps.
- ZK expansion to additional chains
- Developer ecosystem
- Mobile and additional wallet integrations.
- More chain integrations — every new chain is another on-ramp, another source of HBD demand, another reason Hive's liquidity becomes impossible to shut down.
Why Vote for This Proposal
Magi is not a whitepaper. It is not a testnet demo. It is not a promise.
It is a working product. Native Bitcoin swaps, live, on Hive's Layer 2. An application layer with wallet interoperability, with tokens, NFTs, a DEX, an SDK. Ethereum integration proven, a ZK proof system that no competitor has shipped. And a team that increased its output by 5-10x over the previous year and will continue to do so.
Magi brings the revenue model Hive has been missing that has the potential to return Hive to the heights that it belongs to.
Every external user who swaps on Magi generates demand for HBD. Every new chain we integrate multiplies that demand. The more chains Magi supports, the more valuable HBD becomes and the more self-sufficient Hive becomes.
It is Hive's exit from CEX dependence. Magi creates liquidity infrastructure that no one controls, no one can delist, and no one can shut down.
We are building the infrastructure that puts Hive where it belongs at the center of cross-chain liquidity. Not as a speculative token hoping for the next bull run, but as the settlement layer for a decentralized financial future for the whole crypto ecosystem that grows stronger with every chain it connects.
Questions and technical discussions: find us on Discord or reach out to @lordbutterfly on Hive.
GitHub: github.com/vsc-eco | Explorer: vsc.techcoderx.com | App: altera.magi.eco | SDK: magisdk.okinoko.io
