Blocktrades proposal to quarantine and increase HBD interest rates
So @blocktrades is really on a roll when it comes to upcoming #HardFork25. Honestly at this point it's hard to keep up with all the amazing changes to fundamental gains for Hive tokenomics.
To recap
- Bot gamification of curation is being neutralized.
- Removing the convergent curve.
- Hive to HBD conversions (capping HBD value at $1.05).
Any one of these changes to consensus is a huge upgrade, and it looks like we'll be doing them ALL at the same time. Pretty nuts honestly.
If I had to pick the best one?
Definitely Hive to HBD conversions. Stabilizing HBD is a massive achievement that this network desperately needs. This alone could moon Hive token price quite a bit as demand for HBD skyrockets and Hive gets destroyed in huge quantities.
So what are we possibly adding to this list?
It’s been suggested that this interest rate should be increased to something more substantial (e.g. 10-20%)
To make staking of HBD more familiar to the average cryptocurrency investor, it seems likely that it would make sense to make a change to the current interest payment mechanism: instead of all HBD receiving interest, only HBD in savings accounts would receive interest.
I agree
DeFi is the latest craze. It would make a lot of sense to lean into this trend and create a user experience that mimics other systems. Rationale dictates that we should only allocate interest to stake that has been locked, just like how Hive Power operates.
Do I think this is a good idea?
It's definitely a step in the right direction, that's for damn sure. Pegging HBD between $1.00 and $1.05 is already a huge upgrade that will give it a lot of demand. Double upgrading it with high APR on the savings accounts should increase that demand exponentially. By only allocating the inflation to the savings accounts, all the liquid HBD (on the exchanges and otherwise) will be cut out of this yield farming, boosting the APR of the savings accounts quite a bit.
Yet staked HBD will only take 3 days to unlock.
Good deal.
I've gone into quite a bit of detail as to my ultimate vision for HBD and the savings accounts. These accounts are the perfect time-locked smart contracts that have already existed for years but we've never done anything cool with them. These proposed changes are a obvious stepping stone into the direction that I believe Hive needs to go.
DEFI
Hive is the original decentralized finance token. We've been doing yield farming for years using curation and blog rewards to reward the social network aspects of the platform. However, it wasn't all sunshine and rainbows.
Many complained that bid-bots existed. What's the point of the trending tab if people can just buy their way into it? Free downvotes eliminated this. Now we complain about curation bots, the thing that bid-bots morphed into. Why do these curation bots exist?
Passive income.
The answer has been staring us in the face for years but we refuse to recognize it. The vast majority of Hive's delegation-bot problems stem from the fact that users want passive income (they want DeFi & yield farming).
They shouldn't have to curate if they don't want to, and curation bots fill that void where Hive consensus fails. This is the nature of permissionless networks. If there is demand for something... someone's going to build a market for it. This is why so many users delegate to bots and centralize the distribution of power on purpose. It's only a matter of time before we step farther and farther away from this paradigm.
The more we upgrade Hive to come into compliance as it pertains to the rules of defi, the better. My idea was to have the savings accounts double as collateral for loans where users would be able to mint HBD on demand (MakerDAO clone) but that requires a lot of work and a lot of testing. Devs are in very short supply around here. These stepping stones are a great way to do the least amount of work in order to take the biggest steps in the right direction.
How can these changes fail?
I'm actually not 100% sure where the inflation for HBD comes from. I know the witnesses set the target, but I'm not really sure if this money appears out of nowhere or if it comes from somewhere else. Any help on that front would be appreciated.
Regardless, I think the most obvious point of failure is the 10% haircut we are currently employing. I believe these changes will create vast demand for HBD and we could easily hit the 10% haircut, making further conversions impossible and allowing the price of HBD to break above $1.05 once again.
Also, if we are sitting at 10% and Hive price starts going down, HBD will break the peg to the downside immediately and trade under $1. Not great.
As it stands right now, Hive market cap is $229M and there are 7.2M HBD in circulation. We are actually printing HBD like mad I think the last time I checked we were under 5M. In any case, at these levels our HBD to Hive ratio is 3.14% (Pi percent!), so all we have to do is triple demand for HBD and we'll be capped at the haircut again. Lower this multiplier even further to account for the fact that HBD is trading well above $1 at the moment.
A 10% "haircut" on "Hive debt" is going to make very little sense moving forward. HBD isn't debt: it is demand for on-chain stability. There is no limit as to how much demand HBD can acquire. We must change our policies accordingly.
I fully believe that HBD could easily be the most robust and decentralized stable-coin in existence. I've detailed the many different aspects that make DAI a failure and what makes this network superior. Most stable-coins are just pegged by dollars in a bank, which is even worse because those dollars can be loaned out by the bank, becoming immediately insolvent.
Incentivizing holding HBD.
I never considered giving HBD a good amount of interest. My plan would be to get rid of the interest allocated to HP holders and shove that into the savings accounts for passive rewards. If users want passive income they should be incentivized to move to these accounts, while those who power up HP will continue "curating" manually to continue participating with the social networking aspect of Hive. The need to separate passive income from active upvoting is high.
It's somewhat of a revelation to consider we should really be incentivizing both assets. Both Hive and HBD in the savings accounts should be allocated some percentage of inflation to mimic the yield farms on other networks. We have all the tools at our disposal to implement DeFi within a very short period of time.
Conclusion
Hardfork 25 is signaling massive changes to the network. Normally I would say this is risky business, changing so much all at once. However, every one of these changes is a huge upgrade to consensus in my opinion.
Removing the convergent curve is simply getting rid of a mechanic that didn't really serve it's purpose and created more problems than good. Getting rid of curation and turning it into a flat-rate kickback is something that has already been proven to work great for HiveEngine tokens. Allowing Hive to HBD conversions is a super safe play because we are coding in a 5% burn mechanic to increase friction and lower the chance of an exploit. Increasing APR for the savings accounts is also a low-risk no-brainer.
By incentivizing HBD to be held in the savings accounts on top of improving the peg to the dollar we should be able to massively increase demand for HBD. This is a huge win for Hive in all aspects, including taking baby-steps further into the realm of Defi smart-contracts. All we need to do is be ready to take off the haircut training wheels when the time comes.
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Definitely right that people want passive income and put a lot of effort into min maxing things to achieve that... after all, very few people can really actually use their stake perfectly 100% of the time.
I do wonder what these changes will naturally do to curation... I'm sure people will still curate, but I'm also curious to see if curation will drop right off after these changes.
In what way?
The changes are going to give less money to bots and more money to manual curators.
Are you worried about bots curating less?
That's not going to happen either as they scrape a fee off the top no matter what.
No, I wasn't worried about the bots curating less, they'll always be around as long as they can make more than their computing costs. I was more thinking that if people don't have to curate to earn a passive income (ie, through holding HBD) then there would be less people throwing their stake into the curating pool and therefore less rewards for creators.
But I'm honestly not that worried, especially if similar changes are already working well on Leo.
You put all of this into language that I can enjoy interpreting. Thank you 🤝
HF25 is gonna be huge!
Yes I agree 100% this is a good idea and i will start accumulating more hbd in my savings immediately if this moves forward in hf25
Given HBD is still more than $1 now, it might make more sense to accumulate liquid Hive now, which can then be converted to an equal amount of HBD after the hardfork. Assuming that Hive price stays stable or increases during the time before the hardfork, this should yield more HBD than directly acquiring HBD right now (although this strategy might sacrifice some yield, those losses should be far more than compensated by the increase in HBD it should achieve). But that's just a theory, not investment advice :-)
i also strougled to understand this, and this was blocktrades answer to my comment:
so if i understood it correctly it would be taken from the daily inflation. so it would be redistributed. I could be wrong, because i don't really understand how it all works :)
now if i am correct in my understanding that would be less inflation for HP? and if you have 15% APR on HBD saving would you still hold HP that could give you 15% if you are lucky with your votes?
But Dan also said that the % of interest is not set, so they don't know what it would be.
It is something that the witnesses and others will have to discuss to play around with the different scenarios.
The 3% is the initial what was set and it will move from there. To what, is guess.
At least they are addressing it.
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The interest paid on HBD is not part of the regular inflation. It is in addition to it.
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If true this is unfortunate because as more HBD enters the savings accounts there would be no penalty for higher competition. It almost guarantees that we would be constantly pushing HBD up to the haircut, making Hive >> HBD conversions moot and once again destabilizing the peg to both the downside and upside.
Eh we'll figure it out when we get there.
One of the largest sources of inflation in Hive/Steem historically (possibly the largest overall) is the excess inflation created by HBD/SBD conversions while the feed price is low. HBD interest may actually lower inflation overall if it is sufficient to discourage conversions at low prices.
The interest will need to be balanced against the debt burden and rate of conversions. If witnesses can be trusted to be actively involved, they can adjust the HBD interest up or down depending on if we're getting too close to the debt limit, or too much conversions etc.
Very good point, HBD is not pegged by fiat but algorithmically by HIVE, it is more like debt, leading to increased inflation during a bear market, to maintain the peg, more HIVE need to be created through the conversion function. While many users believed that the inflation of STEEM was below 10%, it was actually above 20% p.a. in the bear market because of the SBD debt, which was devastating especially in a bear market. Without the haircut rule that limits the amount of HBD and the conversion rate, HIVE would get hyperinflated during a bear market.
i was not sure about that. i thought it is the part of the regular inflation because there was a lot of voices complaining about the high inflation that goes to creators.
I haven't personally inspected the code, but it's always been my understanding that the inflation paid to HBD is in addition to all other existing forms of inflation, not a redistribution.
👍
There are a number of tradeoffs between HBD and HP, not just comparative yield. Mostly that HBD offers stability and greater liquidity, but limited upside and HP has limited liquidity but more upside. How those play out in terms of demand is really anyone's guess but it isn't hard to believe that HBD might offer higher yield, but people still want to invest in HP for the chance of (potentially large) price apprecation.
Now historically Hive/Steem has not done very well in terms of overall price appreciation but I guess anyone investing in it must think that is likely to change going forward.
the price speculation makes sense. especially if we manage to hold hbd to 1$
I don't know if I fully understand how will be those HBD savings rewarded but if I wanted to take advantage of this, i would power down, change the Hive for HBD and send it to savings, because i haven't much activity lately on Hive, apart of make some comments.
When i saw the proposal from blocktrades was waiting for Edicted's post, hoping more explanations about it and more details, now i have the feeling that the proposal leaves me more uncertainity.
I am now really really excited!! When is HF25 ♥️♥️♥️
lol you know I was wondering that myself I forgot what the targets are.
Hive as blogging platform only is “50%-boring” but Hive as a “51%-defi” is awesome! Total= Financial Satisfaction
The recent addition probably kicks it back a couple weeks but you can guess two months.
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I fully agree on everything in this post. The upside peg will be effective. If HBD is above $1, a lot of HIVE will be converted into HBD and the price will be destroyed in the process while pumping HIVE.
Add proper yields to HBD and there will be demand for the coin, all translating into demand for HIVE thanks to the peg.
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Did I read somewhere that RC pools are coming in this hard fork?
Or am I mistaken on that?
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That would be pretty legendary but I vaguely recall a delay on that front.
Perhaps we'll get a less fragmented update from @blocktrades soon™.
Ah okay. I thought it was too much in one Hard Fork.
I missed the latest developer call so I am a couple weeks behind on that end.
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I thought that was true but seems to be downplayed in the write ups.
Seems we have a difference in views.
Will it be in or not? the great mystery.
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Here are two screenshots from blocktrades:
Edit: Just saw this from @howo
Its going to be delayed until the subsequent release I believe. It doesn't need a hard fork so it should come sooner than the usual 6mos-1y schedule for hard forks.
They will come as a softfork after HF25. Last ETA was a few months after.
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So all we need is to triple the demand for HBD? I think this is at least a better solution than the temporary one right now. It can't hurt to try it and revert it afterwards if it doesn't work properly.
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If we hit the haircut cap that would be bad because that means that there's a demand for HBD that we can't fill, and if Hive dips users will not be able to convert it for the full $1 they are owed.
Thanks for clarifying it for me. I guess there are just many different factors to consider in order to make HBD work out and I hope that this change as well as the hard fork helps address them.
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That's definitely a lot of changes, all at once! Exciting times...
Having a somewhat higher interest rate on HBD might be a nice incentive, but I'd say it has to remain below what an average person would typically make as a result of staking and curating so as to still gently guide people towards active curation as the highest source of income. That might not be as relevant if we already had a few dozen LeoFinance-style niche communities with their own rewards systems... but for the time being, I think it's still important that we have most incentives go towards building and keeping an active social community.
But that's just me, I'm a blogger!
=^..^=
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I think this is an important point.
2.5M of that is inside DHF which doesn't count toward the haircut
Good to know but might be irrelevant considering the macro-economics.
Offer decent APR on a stable coin and it's all but guaranteed that we hit the haircut limit instantly.
To be fair the APR being discussed is less than a lot of defi projects, and also locked for 3 days.
But we also don't know the demand to hold HBD given the new cap to the upside (increased stability).
Should be interesting but I expect some speedbumps.
Not if the price of HIVE goes up.
Right yeah of course... it's just that... an APR of 10-20% is legit better than curating from the reward pool. Not only that... from what I'm hearing this APR has no competition involved like there is with the reward pool and other defi protocols. It's just a flat-rate APR that won't vary with competition. That's a pretty big problem. Only a set amount of inflation should be allocated to the savings accounts: equally distributed by stake-weight just like every other Defi platform (and Hive itself).
I need to think about this more.
It's a different model from reward pools for sure. It puts a high priority on witnesses to set APR appropriately (so vote accordingly!). And the haircut of 10% may be too low or have been a bad idea in the first place (if you know the history, it was made up by Steemit on basically no analysis). So overall I agree with you on the high potential for significant speed bumps. However, I am not sure it will fail.
We currently pay 3% interest on HBD to everyone, including exchange custodial funda. Paying 10-20% to targeted accounts with a minimum staking mechanism, may produce a lower extra inflation than 3% for all. But reality will tell and this is a witness parameter, so there's not much to worry about really.
The 10% haircut rule might create issues, but I agree with blocktrades that we should leave it untouched in HF25, before we understand better the overall effects these changes will have on the Hive economics.
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Are we sure that the HBD balance in the DHF does not count towards the haircut? I was monitoring the feed price and it's stuck at 0.248 which is the level at which the haircut would be in effect if the total HBD supply is used for the calculation. Maybe something was overlooked in the code.
I think you may be right. I'll bring this to the attention of the developers.
https://hive.blog/hbd/@smooth/hbd-stabilzer-temporarily-disabled-due-to-possible-blockchain-bug
The interest paid on HBD is in addition to the "regular" inflation. So it does come out of "thin air".
HBD is debt, it is redeemable upon request via conversions. Not having a ceiling on the debt (aka the "haircut rule") can only have one outcome...hyperinflation of Hive.
Once the markets go south (which is inevitable) and hive dollars start trading below the peg you would see the conversions ramp up. This will put pressure on the price of Hive with the result of more of it printed in a downward spiral.
So yeah, not having a ceiling on the debt is a bad idea.
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The haircut ironically creates the need for HBD to be destroyed in the first place. The demand to hold HBD dwindles to pathetic levels when the network doesn't have the spine to eat the loss. We've already experienced this "death-spiral" effect even with the haircut in play, and more likely ironically because of it.
The haircut is an abysmal failure. It was meant to act as crutches in the case of black swan events, but instead became a prison that we were trapped inside for months at a time. There's no reason to think that demand to hold HBD is going to drop off a cliff during a bear market unless continue haircutting the value of stability. That's precisely why it exists in the first place: to hedge against losses during the bear market.
The haircut is clearly too low. MakerDAO liquidates collateral at 150%, and Hive begins the haircutting process at 1000%. It's ridiculous.
It will become much more obvious that HBD is far more than Hive's debt when it can be minted and destroyed with additional smart contracts. It's only a matter of time before this network is essentially forced to allow HBD to be minted using CDP smart-contract loans. Literally every Defi coin is going to have a stable coin in the future. This lets you give yourself a loan permissionlessly, the value of which is too great to ignore.
Therefore, if/when HBD is backed by both the conversion rate and CDP loans and whatever else, we can see that the haircut is just going to stand in the way and be an annoyance that fucks everything up just like it has been this entire time. It won't be hard to maintain the $1 peg when $2-$10 worth of Hive is being locked to maintain it in CDP smart contracts.
Also, the biggest reason why we experienced extra inflation due to HBD in 2018 was because we didn't have a peg to the upside. HBD didn't start getting liquidated for over 6 months of bear market. We had to wait for HBD to crash from $13 to under $1 before we could even start mitigating this bullshit. The haircut is just going to stand in the way and push the value of HBD above $1.05 even after Hive >> HBD conversions are in place. History will repeat.
When MakerDAO liquidates CDP loans it doesn't create more collateral...that is a huge difference. The game theory for HBD and DAI is not the same...apples to oranges. HBD has more similarities to FEI Protocol (although if you ask me they fucked up the lower side of the peg and we did it at the other end).
In order to make a valid comparison between MakerDAO and Hive you need to start by determining what is the equivalent to the collateral of CDP loans in the hive world. The collateral in Hive is the difference between the virtual and the total supply. When the value of that collateral reaches 100% of the value of the HBD supply (minus the balance in the DAO) the haircurt rule is triggered...it is not 1000%.
The haircut rule does limit the size of the HBD supply IF the price of Hive does not go up in tandem. I find it difficult to believe that the value of Hive will not go up if the market starts to buy it in order to mint HBD.
The debt ratio (aka the "haircut") is not a measure of the liquidation point of the collateral, rather it is the cap on the supply of HBD given a certain price feed. Given the fact that the collateral for HBD is not a "fixed" amount (unlike DAI's) it would be unwise to get rid of it. Probably it is worth exploring what would be the optimal ratio.
The optimal ratio: is no ratio.
The haircut is a last ditch attempt at preventing a death-spiral and should be implemented manually by witnesses in real time, if at all, just like price feeds and HBD APR. Probably not even then because the haircut itself massively incentivizes holders to dump it and make the problem worse. The haircut was an abysmal failure that didn't help us at all.
Show me the math on how much inflation we prevented by allowing the peg to drop to 60 cents for months at a time. Now factor in all the people that dumped just because the peg was broken: making it a completely worthless asset. We likely printed more inflation BECAUSE of the haircut, not the other way around. Allowing the peg to break to the downside did the network zero favors.
You have to admit that your statement is not backed up by any data (I am not saying that it is untrue, just that it's an assumption). It sounds to me that your premise is that when the debt ratio reaches or gets close to 10% it triggers HBD conversions. I only have data after the split from steem so here it goes.
Here you have the deviations from the expected production of new hive per day. Most of the positive deviations were caused by HBD conversions. The negative ones are either burns or the result of the hbd stabilizer.
And here you have the evolution of the debt ratio. Only between 4/8/20 and 4/24/20 (17 days) was the haircut rule in place, yet we had conversions year round. Something else is at play here. My conjecture is that conversions are mostly triggered by market fluctuations below the peg unrelated to the haircut.
Just to complement the data here is the historical HBD supply.
You can even see a massive reduction in the HBD supply at the end of May accompanied by a surge in the extra hive created when the debt ratiio was no where near the haircut.
Wow... nice analysis.
Good shit.
I am impressed.
This is a hard topic to navigate because we are in the Wild-West phase and one false move could send us hurling off a cliff.
Oh yeah also I was totally bullshitting you because Tether market cap has a history of rising and falling with the bull/bear markets. You'd think demand for Tether would increase during a bear market... but it does not. Seems like the liquidity tidal waves of these mega-bull runs wash away any kind of rational theorycrafting.
Actually your kind of right about that. Think about it, what happens during a bear market? People trade their crypto for fiat and/or stablecoins. So in other words, compared to regular crypto there was more demand for Tether. The supply for it remained relatively flat during the last bear market while the marketcap for the whole cryptoverse went down. It even had a brief moment when it traded around 1.20 (according to Coingecko).
So the demand for stability does increase in relative terms during those periods. Check the logarithmic chart for its marketcap.
Actually it is less then 2%, the balance in the @hive.fund account is not part of the debt calculation since the last hardfork.
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The interest rate on staked HBD will be a tricky one to get right. Too much and it would cause problems, too little and what is the point?
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I was interested by your idea of removing the inflation mechanism on HP and moving it to hive in savings. Not sure how it would all pay out but maybe there would be people with HP who aren't active voters and aren't invested in governance who would rather go for 3 day lockup of savings and a higher interest rate than 3.2% we are presently giving for holding hp that would move to hive in savings.
Something I'd be interested to hear people talk about it and we will get to see an experiment with HBD first for many months anyway
The return will also be based on a stable-ish coin. Which means it won't get part of price increases during bull market, or drops during the bear. Theoretically, but on the downside there are still not enough countermeasures against HBD price drops, imo.
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Real simple for me and I think for everyone else.
If HBD can actually hold $1 and be backed by something in order for it to hold that $1 peg whatever the heck needs to be done by the dev team needs to be done and for it to be fixed once and for all.
Otherwise my vote is to do away with HBD and simply just award HIVE in whatever $ value it is at the time. So if it's $100 a day then it's calculated in hive value and given to the dev. OR simply just use a stable coin like USDC USDT to pay out devs. This entire thing has been such a freakin huge waste of time and resources that it's honestly irritating to me. Much better things can be worked on.
So yes,
If HBD can actually be stable and hold $1 then hell yes this is a great idea. I'd stack HBD and earn 3% on it. It would be like a good bank savings account for me and then I can use it later to buy other crypto if I want to in a $ value.
But seriously let's freakin fix HBD if it can be fixed already and stop with all the BS (yes I'm irritated by this subject if it wasn't apparent lol)
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I agree it may be necessary to increase the haircut limit, but I think the safest thing is to leave it at 10% as we first observe the operation of the new rules, because I think 10% is so conservative than there's little risk for anything too terrible to happen under the new rules.
In my opinion, it's also not likely for the haircut rule to represent too big a danger for HBD holders: in the potential case where HBD becomes very popular but that still doesn't translate to an increase in Hive, so that the HBD supply starts to approach the haircut level, the HBD holders can relatively quickly unstake and initiate conversions to Hive to avoid suffering "loss of stability".
Because of the above process, I think the most likely result is that the haircut will just function as a cap on the supply of HBD that is likely to be created. Later, if that cap is considered to be too small, and Hive holders want to assume some more risk and allow for a more liberal supply of HBD debt, it's a relatively easy change to make with a hardfork. But I think such a move should definitely be held in reserve until we've confirmed that the basic economics of the new rules play out as expected.
The biggest danger to HBD holders would be an extremely large drop in Hive marketcap while HBD supply was at high level, of course, and this is a possible scenario in the volatile world of crypto. But even then, this would probably only result in a principal loss to a "long term HBD staker" if Hive stays low from that point forward and doesn't later rise above the haircut level (so far, it always has before too long, IIRC).
I think such holders might want to initiate a small withdrawal from savings to trigger an interest rate payment (to mitigate the chance for a potential loss of accumulated interest time as it possible that witnesses might move to lower or entirely eliminate the interest rate during such a period of time as well).
Arguably this would represent the great loss to such a HBD investor: the loss of future interest during the time that the haircut rule gets triggered. And it presupposes that witnesses would terminate the interest payments during that time, which isn't necessarily true, and would probably depend on the actual factors that resulted in the haircut rule being triggered and the anticipated time for the rule to remain in effect.
In the case of approaching the haircut due to high demand for HBD, even before existing holders decide to unstake, it is likely that further demand will fall off. Who is going to want to buy HBD knowing that a haircut may be coming? (Of course, we see all sorts of odd market behavior here so nothing can be 100% ruled out.)
As you say, I agree this may just serve as a cap, and it then will be up to stakeholders to decide whether the cap is more helpful or harmful.
FWIW, we have never seen a situation where the haircut/cap was triggered due to high demand for HBD. It has only happened when demand for HBD has been weak but HIVE has fallen even faster.
I'm curious as well. It's being mentioned that blockchain pays that. From what I understand is new HBD is printed as per inflation by blockchain itself to incentivize. Not sure though.
apparently it's just extra on top of all of Hives other inflation.
love it man trying to figure things still where can i yield farm on hive trying to remember
I fully agree on everything in this post. i will start accumulating more hbd in my savings immediately if this moves forward in hf25
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Very nice changes! I believe that many of these will prove to be successful in the long-run!
Thanks for the information hive will soar high.
I'm definitely happy about the new changes to HBD interests in the upcoming HF. Providing interest only to HBD in savings will be a good idea and especially only if the interest rate is 10 to 20%.
I still think that the curation reward distribution is complicated for a common man. But once it gets into action we will know if it worked out or not. Let's see how it goes.
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What is this HBD all about and how can someone access it??
I was wondering what was happening to the HBD price. Some major upgrades to the Hive blockchain will be welcome.
Now all we need to do is catch up to the price of Steem again, which is doubling Hive at present. Maybe Sun is manipulating with his whale trades lol.
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..
Great news! Thanks for this great analysis. Being new to Hive, I still don't fully understand all the concepts involved but this certainly helped a lot.
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Incentivizing HBD - I love that idea. If HBD were offering an attractive interest rate like 10% or anything close to that, then that would make it a serious contender to any crypto investor. Thats a big inventive to move money from your basic bank savings account that makes 0.05% Apr. I'm definitly in favor of that change
One might wish to have a passive income and still be involved in the governance of the blockchain. With that in place, that would be no longer possible. It may also have a negative impact on the security of the blockchain if everyone starts to powerdown to convert their HP into savings.
Perhaps I'm wrong in thinking that giving governance votes to stake in the savings accounts sounds like a trivial process. For the most part I assume that there are a ton of people who just want passive rewards that don't want to be active in the community, so you can't really throw the baby out with the bathwater on this one. We get rid of people who shouldn't have a vote by offering them passive rewards elsewhere. Not too worried if some users don't get to have their cake and eat it too.
Those who want passive rewards and governance votes?
We still have curation bots providing that exact service.
Considering that we've already outsourced the blogging aspect of the network to dozens of tokens and condenser clones... it's not ridiculous to imagine a future where Hive pivots too 100% DeFi, eliminating the reward pool in its current form and allocating all inflation to the savings accounts as a yield farming mechanism. All governance votes and Resource Credit allocations would then also be moved to the savings accounts.
All it takes is one killer dapp to start filling up all our blocks and much of the consensus mechanisms we have today will make zero sense. Blogging will not survive the competition. Hive has shown it can roll with the punches though so I'm not too worried about that. This network is pretty good at reactive evolution.
Fully agree. I already suggested the idea of moving the social stuffs to layer 2 and communities at
SteemFest4 in BKK during the witnesses talk, but it was not warmly welcomed at that time.Yeah I was pretty strongly against it as well.
I think it's just a waiting game until we get forced into it.
The price of hive and hbd is alwalys under rated as we think its a better blockchain based social media, however some initiative are taken and execution in nearly future will help the community more stronger. Untill then we are try to support the entire community.
There are many issues with this. However let me first start in saying that at the very least people are starting to take the space seriously if they are having this discussion or they are finally starting to see the tremendous issues they have.
":Again, we need to forget about Lambos, McMansions, and mooning. When dealing with the traditional world of finance, offering something that they can comprehend, with little risk, is appealing."
The problem is many are here for this simply because they don't see a significant use of crypto as of yet. So what they are really saying is let me play the casino. Then i will remove my crypto probably for fiat currency and go buy those things because thats the only real use i see in crypto despite my lamentations about freedom. This is a huge problem.
Why is this a huge problem? First of all a currency is no more useful at $1 than $1 million. It is a medium of exchange. It is not a casino, lottery machine. defi gimmick. It is not any of those things and because the space makes it those things it has so many problems. Velocity of money and use of a currency can create a large amount of economic prosperity That's why currencies are so useful. However let me address everything wrong with blocktrades proposal.
I'm sure he means well. However his track record isn't the best. He created this proposal system it was an absolute disaster. Now the hbd proposal whereas it is in the right conversation. I don't think his plans for how it could work will work. Where will the inflation come from? What is the inflation rate? Nobody knows right there you're probably going to be stuck at zero. If someone says they know the rate of inflation there are man arguments against that.
Hive economy feels more niche than able to support products like these. So Hive for its flagship product has very poor growth. There are tons of inflation on hive. Everyone is taking and earning hive and selling hive. Creating more hive, not creating significantly more money and more growth. That's leading to high amounts of inflation and its basic mathematics at this point. You just can't have that.
The barrier of entry for hive is still too massive to keep up. The people at the top are still too greedy only wanting to make as much money as they can gain as much hive as they can. However a millions zeros divided by zero is still zero. Let me just hint at this in conclusion.
This is going to be difficult to do. Several months ago i introduced what i believe to be the most important creation in cryptocurrency and it was called the BBD coin. It trades as a second layer option and thats exactly what you need to pull this off.
I"m not goign to go into big detail because this info can be found on my blog but i will say this part. BBD coins understand the vast relation between growth and inflation. If you look at the us dollar the inflation rate is based in large part on the size of the economy obviously. What we found was that the most important thing in crypto is wallets and payment channels. The more wallets and payment channels you have the higher the inflation rate is what we found in our model.
So for example if you were to take the value of a social network, we could use any network but i think the easier example is a social network. We are able to in some variety of ways come to the conclusion that the value of those social networks are directed related to the size of the user base. Thats why fb is worth so much because it has so many people on there. it wouldn't matter the business model. Having 2.5 billion people would still be of value. How much value. This is a similar question to gauging what is the inflation rate? Well to not overcomplicate it and to put it in a realm of trust and more security. The valuations we've often used in traditional companies and wallstreet valuations i think would be somewhat safer and appropriate.
So i could deduce something like the average rate on mainstream social media sites per account could range around $200 just for example. Now of course even thats not 100% accurate however we do have a range that may work better than standard ideas and models. So next knowing that value when account bases rise we're more able to account for new value coming in. That can give us a more accurate value to the stability of the project. Next you link a coin to it. This is the model for BBD coins. Unfortunately i believe the space beyond just trying to make money haven't considered these very important issues and thats why there is so much chaos. Why they lose so much money. Why they can't sleep at night. This will continue until the problem is resolved.
Posted Using LeoFinance Beta
So.... for Token that the whole point of existing is to be stable to the dollar, the proposal is to create fake scarcity by promising a random "interest rate" (wich actually is just inflation, since the payment come from new tokens minted), to make the HBD price rise?
riiiight....
Really... You people need to read a basic economics book...
I had to read that three times before I could even understand it.
Were you drunk when you wrote this?
No shame.
The dollar has nothing to do with it.
HBD only has to be a stable asset.
The dollar is the standard "stable" asset anchor.
We're creating "scarcity" by printing more tokens?
No, we are increasing demand.
Why would we want HBD price to rise?
The price is already too high we are trying to lower it to the peg.
Well, a lot of old whales have a lot of HBD on their accounts... need a better reason?
No, you are creating a fake scarcity, promising to pay people if they take the coin out of circulation. This leads to people buying more because they think they will "earn" more, increasing demand, pushing price up.
Pretty basic economic dynamic there.
hahahhaa
Seriously. Go read a economy 101 book.
If there was just a promise of a random interest rate, then you would be correct, that factor would drive the price of HBD higher.
But you're not taking into account the impact of the new Hive->HBD conversion operation which will keep the price of HBD stable (by enabling liquid Hive holders to create more HBD supply to drive the price down to approximately $1).
In fact, I think this one reason that witnesses aren't yet willing to set a higher interest rate on HBD, because without the conversion mechanism, it would lead to an increase in the price of HBD.
Wow bro your attitude is absolute shit. To have such a superiority complex and be so wrong at the same time... I just can't believe how many people there are in the world who act like this. Pretty mind blowing.
It's cool though I'll give you a free pass as you wallow in scarcity slavery.
Try to clean up your act when we're all millionaires.
There are so many tactics that will be used to stabilize the price of HBD.
The more stable it is the more demand it has.
The more demand it has the higher Hive token price goes.
I mean obviously you're not seeing the big picture here so I'll just leave it there.
I thought it would be obvious that wanting low demand isn't something that anyone wants.