Ultimately u just can’t have 20% on the APR.
Imagine the idea that a long lock up (one year plus) has to have a guaranteed 20% for the duration of the year, I just don’t see people voting for that. Maybe 15% lock up.
If we want to get hbd liquid we will convert to it from our hive holdings.
The idea of using inflation to make hbd liquid is like filling the beach with a bucket of sand at a time.
Once we have time vaults (bonds) I doubt the community will rationally want to issue more than an average of 12-15% APR.
The three day lock in period kind of distorts this. Everyone can agree that high interest rate can come from long lock In only, but then where does the interest rate stop? 60% for 30 years lock in, guaranteed, hard coded into the chain? This is insane. Now it becomes clear why APR at high rates is unrealistic.
Question really is:
- do we slowly lower rates now up until time vaults releases where one can get a higher rate Apr for longer lock in
- do we keep the rates the same until to keep the high rate u are forced to lock in longer than 3.5 days?
Either way it’s a shock to everyone’s system.
To me, getting 20% for a simple 3.5 day lock is completely unrealistic and it’s getting something for almost free. It’s not realistic and not fair to the chain. I’d also not like to keep it that way while we wait for as long as it takes to release time vaults. (12? 18 months).
At the same time, getting a 60% Apr for a 30 year lock in is also completely unrealistic.
A balance will be found.
Once time vaults will be found the risk of high Apr earnings can be shifted to the speculators and collateral backers on the layer II bond collateralised loan markets.
The base layer should not be forced to take the high Apr risk imo, especially when it doesn’t need to take it. The borrowers and yield searchers can easily take an 8% Apr, 1 year hive backed dollar bond and obtain the 12% return to it via their speculations in order to return those who want 20% Apr the returns they are looking for, while not putting any extra risk onto the base layer by risking coming close to the hair cut rule
You state,
Writing an 800 word blog about your walk that's essentially your own photo album that no one cares about and earning $100 is essentially getting something for almost free...
That’s why we upvote based on social interactions and traffic. Wish more curators would do this
If the time vault is used as collateral for a bond backed loan market with no kyc and ability to always settle in 1usd of hive, it will pay for itself 1000x over. I’ll get to the rest (it’s a long message)
Agreed. It only earns its value when collateralised loans come. The risk and high Apr can be earned from that layer two. No need from hive layer one.
Yes, we need to call it a stableish coin.
I agree with all of this in principle. I especially like the auction of bonds first then let the hbd holders lock in if they wish.
Either way ppl need to have a shock, 1 year hold for what? 15% max. Surely ppl won’t agree to 20% guaranteed for a 1 year lock. When looked at from that perspective it makes more sense to most imo.
The question really is how long do we keep this up, as I can only feel comfortable doing it when the bonding and auction system is in place, and it sounds like this is at least a year away.
If resources were allocated to building This, and building was proceeding in ernest, i could maybe understand ppl getting upset, but the longer we keep this up without the bonding system and auction with collaterilisation system not having been worked on, the more trouble we are asking for