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RE: Finding out how does HBD interest work by reviewing code

in LeoFinance • 4 years ago

Are the HBDs printed out of thin air, or is it hive inflation being converted to HBD similar to post payouts?

What about the DAO rewards?

afaik, DAO rewards is 10% of hive inflation being converted to HBD at issuance date.

And I would guess that interest rates are printed out of thin air, without considering hive, am I correct?

4 years ago in LeoFinance by
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     4 years ago  

    Interest is out of thin air. However, if the price of HIVE increases over time, which one would normally expect, then HBD has a negative net effect on inflation (it takes more HIVE to create $1 worth of HBD then is returned by converting it, later, at a higher HIVE price). The interest would partially offset that reduced inflation, but likely less than completely.