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Blockchain Wizardry

gtg witness update, upcoming changes in HBD APR

Gandalf the Grey@gtg (76)1104d

Of course @hbdstabilizer is set to 100% beneficiary for this post.

In April 2022 I published a witness update, announcing 20% APR for HBD

I’m always very careful and rather conservative when it comes to such decisions, but given current conditions this seems to be a good time to go this way. HBD is heavily underappreciated, and I don’t mean its monetary value, which by definition should be kind of pegged to USD, but its utility. 1.5s on average to transfer funds from alice to bob. Neither of them pays any fees. There’s an internal, fee-less, decentralized market HBD <-> HIVE Two-way conversions between the two. And of course: the time-locked saving balance.

I was about to do that many times already, but now I think it’s finally time to end this “promo”.

I will start lowering down the hbd_interest_rate to 10% gradually. My first thought was to set an end date for this process, but I can’t predict what will happen in the coming weeks or months, and if I would have to adjust my plan. Of course, my action on its own doesn’t affect platform wide APR for HBD, because it’s a median value taken from top witnesses.

HBD is awesome and will stay awesome, (even at 0% APR!) because of the above perks. In the long run (and it was a long run already) it shouldn’t overshadow what matters most: Hive Power.

And by the way, the next Hive Power Up Day is coming, are you ready? Have you ever participated in it?

See also:

Comments · 28

  • @deeanndmathews(79)· 1101d

    Sir, we are in a bear market ... Hive is no exception to the rule... we cannot fight the trend that has taken the whole market down 80 percent ... not until the halving of Bitcoin ... as a crypto investor, I happen to know that Hive's nearest competitor for stablecoin interest is already up to 16 percent, so if we want Hive to be competitive in the bull, tinkering with the interest is not the way to go. Twenty beats sixteen and definitely zero every day in an investor's mind, and so we will have better heeled members of the investor class who know little about the story of Hive looking sideways about "what kind of team do they have, giving up competitive advantage IN LESS THAN A YEAR BEFORE THE BULL?"

  • @whatsup(76)· 1102d

    My life has changed a lot over the past year, and I no longer have much time to curate and post, although, I've been attempting to stay engaged.

    I recently decided to power down half my stake which is being wasted by my inactivity and to put it into HBD.

    Reading this I will not be purchasing HBD for a bit and will have to decide what to do with my powerdown now.

    It seems the largest stakeholders aren't interested in promotion or growth to individual users which I understand, however I also don't see any attempts to lure, gain or market to developers, app creators, and they are often dismissive to the devs we do have.

    Without HBD as a back up and with everything being so stagnant, I guess I will have to take some time to consider whether I should leave my stake in Hive at all.

    Loved the ride, love the community, love the potential, but I don't understand the direction of the project.

  • @tempertantric(67)· 1102d

    Bring HBD back to 30% or above, I'm trying to survive here

  • @nrg(53)· 1102d

    I'd get behind 0% interest on hbd. Wouldn't want this whole platform going belly up like luna. Hive should be the investment not hbd in my opinion. However I get what's going on here. hbd used as investment vehicle could yield us potential investors and that's a good thing. Implosion of hive is not likely at current debt levels. Thanks for the update and for lowering the rate. I like the way you run this chain, that's why I vote for you. Keep it going.

  • @memess(63)· 1102d

    Amazing idea, hdb don't need 20% apr for a safe (long term) growth

  • @jossduarte(67)· 1103d

    I even find it offensive that you try to put the label 'Promo' on the situation, it turns out that it was not a benefit, it was never a pro-platform decision; why wasn't it announced in the Post as a temporary promotion? I'm not saying you should watch your words, but this kind of situation is why small print exists in contracts, where does it say that this is temporary?

    I understand that it can be reversible and that you are fine with it at this time reducing it to 10% and 'even 0%', but don't try to sell this as the end of a promotion. Please Respect us.

    Another issue and it does not go directly to you @gtg forgive me for using your Post to address all those Witnesses, who say over and over again that this is a platform of freedoms, where the community is listened to, they fill their mouths saying that as a benefit before other centralized platforms, and here they are, telling us how they think we should consume their platform and giving us not an order but an 'Innocent' suggestion.

  • @revisesociology(82)· 1103d

    You have my support on this I hope other top witnesses follow suit!

  • @preparedwombat(79)· 1103d

    The world needs a lot more HBD. If anything, I’d like to see the APR increased.

  • @engrave(74)· 1103d

    I'm willing to reduce it as well because, from the outside perspective, it sounds like a scam. It's too good to be true and people think it's not sustainable (which I believe is true in the very long run but it's fine for now). What I would like to avoid is to drastically change it without any prior notice for "investors". This will make us silly. I know, decentralization and stuff but after all we should be considered a mature and stable environment to onboard masses, both users and developers.

  • @mypathtofire(76)· 1103d

    I think this is a great move and brings the focus back onto Hive Power where it should be. My 1k power up is in my wallet and ready to go!

  • @dalz(81)· 1103d

    I don't know what would be the right APR, and probably nobody does, we all play the guessing game here, as for the most thing in life :)

    But I don't think constantly tinkering parameters is a good thing, and the overall uncertainty that we have with this parameter. Can we try and propose some type of rules and mechanics that will give predictability to the HBD APR and how it is determined, and have this set in code?

    At the end the HBD APR is secondary when it comes to the health of HBD and HIVE, the haircut rule is the ultimate protection and the ruler of the system.

  • @tobetada(77)· 1103d

    I get it, but I think we could run this 20% experiment a bit longer. the main reason for having it this high is to attract investors and so far that is starting to work. When someone wants to buy HBD, they have to essentially buy Hive first which puts buying pressure on the markets (the selling pressure from selling Hive on the internal market does not really move the price on the external market, and even better when they convert it). When they sell it, it again puts buying pressure on Hive (again, on the internal market that isn't too much, but we could perhaps say it 0s itself out from the beforegoing selling pressure). We have also seen that 20% is not unsustainable. But I agree that we should make HP the place where value should go long term.

  • @empoderat(73)· 1103d

    Honestly, HBD APR has been in the ''too good to be true'' category for a while. And as @elmerlin said the other day in a discord room (ocdb I guess) it's not about ''being able to pay that 20% APR in a sustainable way (because for now, it is!), it's more about balancing incentives''

    And I can't agree more on that.

    Hive Power holders should be the #1st class citizens on the Hive chain, and 12% for HBD savings feels more than reasonable (at least to avoid eclipsing the APR of HP).

    On the other hand, I believe that as a community we should be careful about changing the economic rules of our chain. Money is skittish and does not like unforeseen changes. Be careful there is imperative not to change the numbers too often.

    I have been thinking about a hypothetical way to adjust the % interest on savings that might be interesting, but that is a topic for another day.

    I also agree with the points of @deathwing to make HP more appealing, I also believe that reducing a bit posting rewards for an increase in HP APR would be a good measure.

    Of course, I own a lot of HIVE, so my opinion is hugely biased. I'll change the params of my witness to signal 12% APR on savings.

    Have a good day @gtg !

  • @ph1102(79)· 1104d

    HBD is heavily underappreciated, and I don’t mean its monetary value, which by definition should be kind of pegged to USD, but its utility.

    It WAS underappreciated, but going to 20%, IMO, was going into other extremeness and the result was that it was OVERappreciated... Let's meet in the middle, it's not too late...

    Thanks for making this change!

  • @hivebuzz(74)· 1104d

    Congratulations @gtg! You have completed the following achievement on the Hive blockchain And have been rewarded with New badge(s)

    You received more than 230000 HP as payout for your posts, comments and curation.
    Your next payout target is 232000 HP.
    The unit is Hive Power equivalent because post and comment rewards can be split into HP and HBD

    You can view your badges on your board and compare yourself to others in the Ranking If you no longer want to receive notifications, reply to this comment with the word STOP

    To support your work, I also upvoted your post!

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  • @beerbod(66)· 1104d

    I think adjustments are necessary in order to make this sustainable. Everywhere you look, investments would hover around 5% apr for safe to moderately risky investments. And 10% apr are already considered highly volatile and risky.

  • @cmplxty(78)· 1104d

    Really glad to have this being lowered! I know a lot of people enjoyed the 20% but I think it's about time to get it down to a reasonable level. I think 10% is likely a good middle ground, it incentivizes people to do more for Hive Power where that earns 12% for curation+inflation at the moment. We are setting up various markets for HBD but those have been a little slow to roll out.

    At the end of the day, I think a slow taper off away from 20% is good. I just wonder what those gigantic accounts with hundreds of thousands of HBD are going to do. Dump Hive? Hard to say.

  • @igormuba(72)· 1104d

    I am also setting my witness to vote for a lower interest, was voting for 18% now I am at 16%

    But we knew that when raising HBD interest to 20% that it would make it very attractive. It was alright when HIVE was not going down, but with the current market conditions I am afraid new investors may not see that Hive is about HIVE.

    I don't think the change will impact HIVE at all, but it may signal that HIVE is still at the very least as important as HBD.

    If I were to put a big chunk of money on Hive on a bear market like this I don't think I would even consider HIVE with an interest of 20% on HBD, I'd go all in on HBD, and the thought of that bothers me.

  • @steevc(81)· 1104d

    I've gained a little from HBD savings, but HP is my focus and I think curation should be encouraged as it spreads the benefits. I have a full set of HPUD badges and will try to keep that up.

    We do need various options for people to invest though.

  • @andablackwidow(69)· 1104d

    Booo 😡

    • Are we overflowing with HBD? No.
    • How does 20% compares to alternative? IMHO there is potential for HIVE to grow withing a year a lot more than 20% (even discounting current dip), so actually keeping funds in HIVE makes more sense from that perspective (even in liquid form, if someone intends to catch some price swing opportunities along the way).
    • Keeping 20% for such long time gives us bragging rights

    If it works, don't touch it!

  • @kenny-crane(73)· 1104d

    HBD is awesome and will stay awesome, (even at 0% APR!) because of the above perks.

    I agree completely!

    It is true that the 20% rate is great for HBD Savers, but at what cost. I'm not sure if it causes people to put less into HP or not. I have seen data and charts in some posts here, so I'll have to find them again and see what the data says.

    I have seen something going on in Venezuela regarding using HBD at stores there. I think @hivesucre is at the center of this trend. I wonder what their thoughts are on the 20% interest rate. Does that benefit them or not. Would a lower rate slow adoption of HBD as a payment currency in their stores or not.

    Also, I wonder about work on ideas from @taskmaster4450 in regard to implementing other locking/staking/saving of HBD such that longer pays better. There was a suggestion of a Hive Bond that might pay a higher interest rate for a longer amount of time lock, similar to bank CD rate tiers. Any insight @gtg as to if that could be a reality "soon"?

    One other thought. In gaming,

    you play the game and level up which unlocks better rewards. It might be cool to have several levels of HBD interest depending on how much you have in HP. Holding under 10K HP pays one interest rate on your HBD, holding 10K to 30K HP pays more, etc. That incentivizes holding HP. Play the HIVE "game" of posting/commenting/voting/buying and level up your HP to unlock higher levels of HBD interest rewards.

  • @cwow2(73)· 1104d

    I have been working on getting 6K HBD in the savings because of the 20% APR. I even powered down all of my 10k HP to get as much HBD in the savings as possible!

    But I am down for the HBD APR to be lowered to 10-12% and at that stage, I would move all of my HBD back into HP or some tokens :D

  • @acidyo(85)· 1104d

    Guess when you say gradually you really mean it. :D image.png

  • @woelfchen(73)· 1104d

    20% was a nice boost for the loyal platform supporters

    maybe should still be high up there to still use the chance to attract some more outside interest, especially with the upcoming market volatility

    but then lowered to 7-14% according to rising outside interest (to not "overheat" the system by too many taking the chance to profit from 20%)

  • @bitcoinflood(80)· 1104d

    This makes sense and honestly I couldn't even understand why it's been at 20% for as long as it has been. It undervalues hive itself since you only make a 7%-11% APR while do working (aka curation) the negative of that however is the risk that hive changes in price and does so rather rapidly.

    Now HBD does a pretty good job at holding it's value at $1 but there's legit no work to be done to get that 20% APR.

    I'm honestly all for slow reduction down of APR on HBD to something more around the 5% - 7% level.

    The reason for that is HBD requires pretty much zero work so 5%-7% a little lower APR with lower risk seems reasonable compared to a riskier HIVE APR that puts out around 7% - 11% (I get this percent from general powered up APR and maxing out your curation on average)

  • @nonameslefttouse(77)· 1104d

    Yup. 20% is too high, for many reasons. Good plan.

  • @incublus(79)· 1104d

    I can't say I'm super knowledgeable about these things, so I don't know if 20% is better or worse, but I'm always in favor of Hive Power. I've been attending Power Up events regularly for a year now, I'm even organizing one for the Turkish people, so I'm ready for the next Power Up day, I'm even planning to break 10k HP.

  • @acidyo(85)· 1104d

    Nice sunflower-ish logo reveal!

    Thanks for the update, ocd-witness has been signaling 15% for quite a while now and is interested to lower it to 12% gradually as well to match with curation and HP APR. Depending on the times and other factors, maybe even a bit lower later.