Hive has seen some positive price action in the last period. When this happens usually, we have a positive outcome on inflation as well. January has been such a month for the first time after a while. Let’s take a look!
The projected inflation for Hive for 2025 is 5.5% on a yearly basis, or 0.45% on a monthly basis.
Hive has a double currency system, HIVE and HBD, with conversions between them that add or remove HIVE from circulation on top of the regular inflation. Furthermore, the decentralized hive fund DHF, that serves as a DAO converts the HIVE that is in the DHF into HBD.
Because of this additional mechanics the HIVE inflation and supply can be drastically different in real time than the regular/projected one.
The @hbdstabilizer has also grown and it is playing an important role in the overall tokenomics, making conversions and trading on the internal market.
To be able to follow the HIVE supply we need to take a look at all the different ways HIVE is created, author, curation, witness rewards, conversions etc, then net that out with the HIVE burned from conversions, accounts fees, null transfers etc. To get the virtual supply we need to do the same for the HBD supply as well.
HIVE Created
Here is the chart.
The chart above includes:
- Author rewards
- Curation rewards
- Witness rewards
- Staking rewards
These are the regular ways new Hive enters circulation, and all of them are through vested HIVE, aka powered up. You can notice the slight fluctuations in the daily amounts that is connected with the virtual hive supply, or the base for the inflation. When the price of HIVE is low, the virtual hive supply increases, and when it is up, the virtual hive supply decreases.
In the last month the new Hive dropped to the increase in the HIVE price. Also, hopefully this will be the last year when we have this price dependent inflation. If everything goes as we hope, there should be a HardFork in Q1 of 2025 and the virtual supply should be removed as a basis for inflation.
The thing is the conversions are playing a major role in the ecosystem. Here is the chart again, including conversions.
We can notice that the HBD to HIVE conversions are the dominant in the chart. This works in both ways and a big part of them is converted back to HIVE, especially through the work of the stabilizer.
The regular inflation has been on average 68k per day in January 2025.
HIVE Removed from Circulation
Here is the chart.
The above takes into consideration six different ways of HIVE removed:
- Ninja Mined HIVE To HBD Conversions In DHF
- HIVE transfers to DHF and converted to HBD
- Transfers to null
- Null as post beneficiary
- New accounts creation fee
- HIVE to HBD conversions
The HIVE transfers to the DHF are now dominant. These are transfers made by the stabilizer. We can see a few spikes in the HIVE to HBD conversions (blue) in 2023. These were due to the increase in the HBD price. We can also notice the drop in recent months, same as the opposite conversions due to the low volumes that the stabilizer is doing.
Historical HIVE Supply
When all the above is added and removed, we get this chart for the all-time HIVE supply.
Up until August 2021, the supply was almost steadily increasing with a small fluctuation. Then there was a drop in the supply in September 2021. Since then, from time to time we can see some drops in the supply with the recent happening in February and April 2023.
January 2025 ended with 465M HIVE in circulation.
HBD Supply
Here is the chart for the HBD supply.
The light color is HBD in the DHF. The HBD in the DHF is not freely circulating HBD and only enters circulation when payouts to the DHF workers are made.
HBD is being created and removed in various ways, but the conversions play the major role here in both directions. Other ways HBD is created are DHF proposal payouts, author rewards and interest.
We can see that after a downtrend in 2021, in the last years the HBD supply has been in a tight range between 10M to 11M. We are now again at 11M HBD.
Virtual HIVE Supply
When we add the HIVE equivalent supply from the HBD to the HIVE supply we get the chart below.
The light color is HIVE that in theory can be converted from HBD at the current market prices for HIVE.
We can see that the virtual supply fluctuates a lot, mostly because it is tied to the price of HIVE. As the price of HIVE drops, the virtual supply increases and the opposite. Towards the end of the year we have a decrease in the virtual supply due the HIVE price appreciation.
When we zoom in 2023 - 2025 we get this:
In 2023 and 2024 the virtual supply has increased because of the drop in the HIVE price. In the last month we have had a decrease in the virtual supply to due the uptrend of the HIVE price.
Projected VS Realized HIVE Inflation in 2024 - 2025
This chart tells the story of the new HIVE entering circulation in 2024.
Up to June the realized inflation was close to the projected one, but then in June the Hive price dropped sharply and there was a lot of conversions happening, the virtual supply increased resulting in overall more HIVE put in circulation then the projected one. The year ended with 43M HIVE put in circulation, with the supply increasing from 420M to 463M. The projected new HIVE for the year was at 26M. In the last month we have a stabilization in the supply.
Monthly Inflation
If we plot the monthly inflation in 2024 - 2025, we get this.
We can see that all the months were positive, with the summer months of 2024 being the highest. More than 1% monthly inflation in the summer months, while the projected one on a monthly level is at 0.5%.
January is the first month after May 2024 when we have a lower inflation then the projected one.
Yearly Inflation
The yearly, projected and realized inflation looks like this.
After a while 2024 has been a year with higher inflation than the projected one. A projected one of 6% and a realized of 9.5%. Last time this happened was in 2020, when the realized was close to 12%.
2025 is now on a good start after the first month, but we will see how it will continue.
Net HIVE Created by Category in January 2025
Here is the new HIVE put in circulation by category for the mionth.
Conversions are negative and because of that we have lower inflation then the projected one.
Curations are on the top of the positive with 900k followed by authors rewards.
Some small amounts were burned, with setting null as beneficiary for posts and from account creation fees.
For a change 2025 is now on a good start, with the HIVE price increasing. The Hive inflation is set to go down 0.5% each year, meaning for 2025 it is projected at 5.5%. If we implement the change from the virtual HIVE supply to regular in the next HardFork this will further increase predictability. Of course with the dual currency system and conversions at layer one, the unpredictability factor will remain, but overall 2025 should be better than 2024.
All the best
@dalz
Maybe I missed the memo but how the hell did the DHF get that huge influx of HBD just before 2021?
It was becouse of the ninja mine tokens that were put there (Apr 2020) and started converting from HIVE to HBD (Oct 2020), in relation to HIVE prices. Becouse the conversions were set to 0.05% daily out of the 83M HIVE that were moved into the DHF, at the begining the daily amounts in HIVE terms were highest, 40k and plus HIVE was converted to HBD daily. Now we are at 18k HIVE daily with 38M HIVE left.
That's good to here. Hopefully we keep on this good trend. !PIZZA
In this way it is very difficult to handle all the things and we see that here now we will see more users on this platform so things will also change. We did not have that much knowledge before but reading your posts. After that there is a considerable increase.
The June #HIVE creation spike illustrates the double-edged effect of a notable price drop... lots of conversions increase the HIVE supply, which would logically help sustain the lower price point.
It doesn't seem like there is a comparable opposite effect with a notable HIVE price increase, which should help with overall token value. It would be nice to see a slowing down of supply. Are there obvious ways to do that besides converting, burning and selling?
!PIZZA !BBH !LUV
(1/4) sent you LUV. | tools | discord | community | HiveWiki | <>< daily@dalz, @thatcryptodave
How much of the 'unexpected' inflation came from the stabilizer and went directly into the dao?
What is the expected number of hive at the end of 2025?
So, this is good news, right? The inflation is low, which is nice.
Yes :)
Hive inflation rate has been decreasing every year, that's good. Hive supply has increased. Hive creation needs to be reduced.
!PIZZA
I just hope it wouldn't go as low as 2.3 this year
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