I don't mind the proposal system. The proposals are supposed to fund the creation of things. There is a catch proposal that burns the HBD.
The 20% interest on HBD creates coins that don't do anything except push down the price of HIVE.
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That is incorrect. One of the primary purposes of Hive is to enable investors to attain ROI. Prior to the increase in the return on HBD, almost the only overt way to attain to ROI was for holders of Hive to generate curation rewards. This created a financial purpose for curation that deprecated actual curative intent. Rather than upvote 'quality' posts - whatever quality standards consumers apply - investors upvoted posts to gain financial returns, which created incentive to form circlejerks, bot farms, to buy votes, to frontrun pandering, and for reasons related to curation reward metrics that have nothing to do with the quality of the content of the posts. A quick look at Trending, particularly during the heyday of bidbots, reveals that such financial incentives utterly derange curation and dramatically reduce the quality of content on Hive.
Implementing the 20% return on HBD enabled investors to achieve ROI without deranging curation, which has had a beneficial impact on content quality on the platform by reducing the use of staked Hive to curate only in order to gain curation rewards because that stake was instead parked in HBD. It also increased Hive's potential to attract investment by providing an ROI mechanism to investors other than dodgy curation rewards.
Social media has rapidly become the largest financial sector in global markets, and this shows that Hive's blog usecase has enormous potential for upside, far more potentially rewarding than any other use case.
The ratio of HBD to Hive is ~1/3 that at which the HBD 'haircut' is required to prevent debt from overwhelming the Hive currency value. We're nowhere close to that point today, and HBD continues to benefit free speech and content quality, which is arguably the platforms vastly greatest potential to raise token price, suppressed because attracting outside investment threatens extant control of governance, as Steem demonstrated (and BlackRock reveals is endemic to plutocracy).
@edicted has posted several times regarding stable coins and shown that HBD FUD is baseless. I recommend having a look at those posts and considering the analysis he has provided, as well as understanding how ROI is facilitated and curation rewards are mitigated by HBD interest. The quoted statement reveals you completely ignore those, and other, benefits of nominal HBD interest.
HBD savings, for example, increase funds available to invest in development. People take out loans for reasons, and without debt the world would be without one of the most powerful vehicles for commercial development. Hive could certainly invest better than it does, but that requires better use of funds, rather than reducing funds available for development.
To play devil's advocate, you could drop the interest rate on HBD as low as 12% and still exceed what you could get from hive interest+curation and provide a greater return than most traditional investments (on average).
Having said that, I don't see an immediate need to reduce interest. I guess a better discussion might be under what conditions should a reduction be considered?
Indeed, the ~9% premium over the historical ~11% return on stocks is intended to attract stake that would otherwise be invested elsewhere. I prefer to allow the current offer to continue to demonstrate reliable returns, because prudent management of funds will await historical demonstration of stability and security of the vehicle. It would be rash to now raise that rate, despite upside room to as much as 25% or more, and I see no reason other than FUD to lower it, presently. Slow and steady wins the race to financial security, and extreme hype would attract aggressive speculation, while reduction to marginally improved returns would not overcome FUD regarding Hive. 20% feels like a sweet spot to me, and I expect it came of substantial consideration prior to it's implementation.
The value of HBD comes from HIVE. This is easy to prove because HBD was holding its peg before the the raise in the interest rate.
Yes, the HBD price tends to be slightly lower than $1.00. The easiest way to raise the HBD price to $1 would be to change the conversion formula so that it generated $1.01 in HIVE.
Originally the haircut hit at 10%. So, we just crossed the original haircut.
That's what people thought would happen when they raised the rate.
The price of HIVE has been in steady decline since the decision.
HBD Interest Crashed HIVE-Engine
It is easy to prove that the 20% interest on HBD accelerated the decline of HIVE Engine.
If you look at the history of honey-swap; you would see that a large number of players pulled their funds from HE and put the funds into HBD. You will also see that 20% interest on HBD reduced the flow of funds into HE.
The 20% interest on HBD failed to bring in new investors. It managed to "derange" the curation of both HIVE and HE coins which is shown in the deep decline of the coins ever since.
!WINE
I'm not saying these things didn't happen. I point out that the oligarchy can only maintain it's plutocratic control of Hive as long as it doesn't incite outside financial interest from relatively small investors, like Sun Yuchen. Trying to maintain the oligarchy on Hive requires a delicate balancing act, because they need to maintain ROI without facing hostile takeover. That seems to require a shrinking userbase and declining token price, because sharks are circling, looking for ROI.
HBD's 20% return offers a way for sharks to invest in Hive without changing it's paradigm, to prevent Hive from suffering Steem's fate and the extant oligarchy from losing control of governance, IMHO. This is your real problem with 20% interest on HBD, that it works to attract that stake and dampens ambition, as it is implemented to do. The DHF transforms the Damoclean sword of the Founder's stake into a mechanism to redistribute that stake to the remaining oligarchy through proposals, such as HBD Stabilizer, Valuplan, HW, SPL, and etc, that may promote growth rhetorically, but do not threaten it in actuality.
Actual growth is no less an axe poised above Hive's neck than was the Founder's stake, as Steem shows.
Edit: I am confident that any mechanism that potentiates growth without facilitating the subsumation of Hive by BlackRock or lesser stakes would be eagerly adopted by extant stakeholders. What would you propose?