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Hive Governance

Listening to feedback regarding HBD APR (and Posting Rewards)

Deathwing@deathwing (73)1097d

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Hey all,

I think my latest post became one of the most commented posts I've ever shared on the chain. Thank you all for your inputs.

First of all, I'd like to address a few things I read throughout the day.

Witnesses bad! They coordinate following one guy creating centralization!

Not really, that's not the case. I first put forward my motion about 4 months ago. It has been probably discussed a million times since then and even before.

HBD interest doesn't affect inflation

Remember, HBD Interest is completely separated from Hive inflation. So things like posting rewards, curation rewards, DHF, passive Hive Power inflation, witness rewards etc. All come from a pre-determined (at chain start) inflation rate that is decreasing over time. However, HBD Interest is printed out of thin air.

When we first increased HBD APR to 20% (with a staggered increase) we were thinking of competing with LUNA, who offered similar rates for USDT/C we all probably know what happened to LUNA, but that's a topic for another day. On top of that, BTC was quite high, Hive was close or over >$1 so we were golden! Lets take this opportunity.

However, now it is not like that. The market has gone down significantly since then with Hive, as of now, being traded at about $0.29 per HIVE. Does this mean we cannot afford 20% APR? If we had our old debt ceiling, probably. But not now since the debt ceiling has been increased a while back. But please don't forget that for every HBD there has to be HIVE in the background "backing it" since HBD is "Hive-backed Dollar" after all.

But reading your comments, I believe it is nice people gathered around to share their ideas, feedback and potential future suggestions. We can always find more uses for Hive and HBD both on-chain and off-chain (or side-chains). Time to go back to drawing board with more ideas :)

Lower HBD interest but increase posting rewards

That is not possible due to the explanation above.

Side note: Posting rewards

As I mentioned in my previous post, about reducing posting rewards, that is NOT consensus. It is an idea a few witnesses were mulling about with nothing being set in stone, nothing is being changed and further discussion is of course needed. While it is easy to change HBD APR with just a few parameters, any major change such as posting rewards would require a hard fork, which necessitates supermajority approval in the first place.

So why did you change your HBD APR?

I have increased my HBD APR from 12% to 15%, I believe it is a nice middle ground to wait on until we have filled our drawing board a bit more.

Thanks, I've written enough for this month, see you on my next development update or the next controversial post :)

Comments · 8

  • @crrdlx(68)· 1094d

    A couple of lines here had me scratching my head. I'm sure I must be confused. Help me understand.

    Namely, the couple of head scratcher lines were in the section titled "HBD interest doesn't affect inflation" and follow:

    1. HBD Interest is completely separated from Hive inflation...HBD Interest is printed out of thin air.

    2. ...please don't forget that for every HBD there has to be HIVE in the background "backing it" since HBD is "Hive-backed Dollar" after all.

    Line 1, regarding HBD interest not affecting Hive inflation

    Minting new HBD has no impact on Hive inflation? How can this be true?

    Based on the explanation of "...posting rewards, curation rewards, DHF, passive Hive Power inflation, witness rewards etc...", I understand that those things have a prescribed emission rate and therefore impact Hive's inflation at a prescribed rate.

    HBD, as I understand, works differently. It does not follow a prescribed emission rate. Rather, it is minted based on how much people have moved into HBD or into HBD savings. That quantity, of course, is adjustable to the whims of HIVE holders.

    Thus, "minting" HBD in the form of interest seems as though it would certainly impact HIVE emissions...if users converted that HBD to HIVE. There is a 3.5 day delay in this, but that seems minimal to me and really is only a time delay to impacting HIVE inflation. Of course, if the new HBD is not moved to HIVE, then HBD interest is indeed separate from Hive inflation.

    Some maths.

    Suppose the market cap of Hive was 100 HIVE. Suppose I have 10 HBD. After one year, I have 120 HBD thanks to the 20% APR. I decide to convert, say, 40 of HBD into HIVE. Three and a half days later, the market cap of Hive is now 140, a 40% increase in just a few days. How is that not affecting the HIVE inflation rate?

    Line 2, regarding "for every HBD there has to be HIVE in the background"..

    ...two things come to mind. First, doesn't this mean that HBD actually does affect HIVE inflation? If the two are essentially able to be flipped and flopped back and forth at any time, doesn't newly minted HBD effectively increase the HIVE supply (and thus impact the inflation of the token)? Secondly, the notion that HBD is "printed out of thin air" has a couple of results, in my mind. It definitely impacts inflation of both HBD and HIVE in its thin air printing. And, this statement seems to directly contradict the idea that "...there has to be HIVE in the background 'backing it'." If printed out of thin air, almost by definition, there would be nothing backing it.

    I'm sure...

    ...that I'm not understanding or seeing something here. What am I missing?

  • @onthewayout(62)· 1096d

    I personally do not think that the interest rate should be a parameter set by the witnesses. The blockchain itself should determine what the interest rate should be based on the debt level.

  • @whatsup(76)· 1097d

    I'm in the middle of a powerdown to stake HBD. With all this discussion, I'm not buying anymore hbd, but since I also had a life changing year and don't have as much time to contribute to Hive, I guess I'll have to consider pulling my hive stake all together as I have gotten out of most low cap tokens.

    Currently outside of Hive, Leo and Koin, I'm in Bitcoin and ETH, but not really seeing what the future holds for Hive even when Bull season returns, we aren't promoting, we aren't encouraging development and now we aren't paying interest, as a user I was fine with all that, but as an inactive investor, I'm too unsure about the future of the project and where it is heading.

  • @edicted(83)· 1097d

    Witnesses bad! They coordinate following one guy creating centralization!

    lol yeah I was seeing a lot of this.

    "We should have town hall discussions about these things and talk about them first."

    Like lol what do they think is happening like right now? People are funny.

  • @toofasteddie(77)· 1097d

    To tell you the truth, this whole debate seems absurd and arbitrary to me... 20% APR in HBD hasn't hurt us at all and I don't see it going to do it... Why change things when they are going well? I also don't understand why 15% is better than 20%. The only thing that is needed in HIVE is more marketing and less touching the parameters of a blockchain that works like a Swiss clock. And I'm sorry, I also do not have a solution to improve the marketing of this project since I am not a professional in this regard. Still, I hope that, at some point, someone is and does it but for this, we need more visibility and more exchanges that include HIVE and HBD.

  • @mrspointm(81)· 1097d

    @tipu curate

  • @mehmetfix(71)· 1097d

    HBD faizinin bir şekilde %10' a düşürülmesi ya da en azından %15' e düşürülmesi gibi bir fikriniz varmı Tanıklar olarak? 😀 Ayrıca daha önce birkaç gönderide HBD faizinin yüksek olmasından dolayı Hive fiyatının yükselmediğinden bahsediyorlardı. Senin yazdıklarını okuyunca şimdi kafam daha çok karıştı.

  • @sanjeevm(78)· 1097d

    15% sounds reasonable and lucrative as well if the chain can afford.