20% Interest on HBD with 3 day locking is too good and it will make HBD the best stable coin among others...but will it be a problem in terms of inflation
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20% Interest on HBD with 3 day locking is too good and it will make HBD the best stable coin among others...but will it be a problem in terms of inflation
How is that?
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When we have more HBD getting paid as on interest, there will be pressure on Hive as more and more Hive will be sold for HBD and will there be a problem on inflation when there is more conversion from Hive to HBD
Yes and that Hive being sold will reduce the amount out there, actually making HIVE deflationary.
Plus, we need more HBD if we are going to be a stablecoin. Do you think 9 million HBD is enough to engage in commercial activities?
We already have no liquidity in it.
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I would expect the 20% to be tapered back eventually. High interest like that should be available to long term stakers. I hope u continue to advocate for that task. But for now, temporarily we propose 20% for three day lock in, based on us actually building out the staking system. 20% Apr should be for 6 months stake locked in. Not three days. Hope u continue to push for that task.
Now we just gotta get a proposal out to get hbd backed by 1mil worth of btc and make sure that there is a guaranteed hbd btc conversion from a btc multi sig. that plus tipping hive content with lightening (which BoL has essentially completed ability to integrate into other front ends by API) puts hive at the front.
Our witness @threespeak will move to 20% Apr temporarily on the basis that we build longer term lock ins and btc backing
Certainly I will keep pushing for time locked levels within the Hive savings program. However, I disagree that 20% is high interest considering we need so much of it to be created. This is something that can easily be offset by growth within the platform. Just think of how much HBD is going to be required to conduct $50 million in commerce.
As for the backing of HBD by BTC, why do that? Why try to use collateral for HBD when that should be the collateral? There is no reason to hand that role over to Bitcoin. It makes no sense to me.
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IMO 20% too high for a three day lock. Happy to advocate for it temporarily to give hive best chance to meet its potential. But the sound thing to do is advocate 20% for a 6 month lock in. 3 day lock in at say 10% is better. (Obvs tech is not yet built for that).
Partial btc backing (say 1 mil worth of btc, 5-15% market cap) imo is great thing and will help bitcoiners view hive as more of a side chain than it already is. It’s essentially a hbd / btc liquidity pool that the hive chain printed up the liquidity for. I think it shows hive is very capable chain. Not many other chains could make that type of a power move
That is true. Certainly this was the entire premise of a bond tree. The numbers could vary but just to toss it out there: 10% for 3 day; 15% for 90 day; 20% for 180; 25% for 1 year and so on.
This is also true. But for this reason, I think Hive has the opportunity not to show Bitcoin but go after Bitcoin. In the world of collateralization, as a base layer, Hive has the ability to do something else very little can do. For this reason, we need to focus upon making HBD pristine collateral instead of supporting Bitcoin. In the end, the latter will end up doing well there (in fact that is what I think its ultimate role). In the meantime, Hive can do it better if we implement some of the above levels as you mentioned.
I am working on the ideas surrounding this and how we can replace a great deal of what takes place in the Repo market and with interbank lending.
Hive honestly can step in here if my calculations are accurate.
More to come my friend.
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Yes I don't think anyone would suggest it be "permanent"
It is very important to make clear at all times that witness-set APR is variable and can change at any time. When the cost of interest exceeds the value of promoting the chain (either because the former is too high or the latter too low or seen as diminishing returns) I would expect it to be reduced.
If or when longer term bonding / locking system is built, one of its great features will be a guaranteed APR, rather than an APR that can vary based on witness signalling. If that can be built before the APR on the 3 day lock in gets reduced (for whatever reason) it will be quite a classy move. Will certainly put us ahead of other chains in this feild who have ultimately had to reduce their APR eventually. I think with the low market cap of hive and incredibly low market cap of hbd or usdh or whatever we end up calling it, the potential for this to outperform where others have failed is tremendous.