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RE: Hive Inflation for August 2024 | Running Hot for a Third Month in a Row!

in #hive • 5 months ago

I have some questions:

  1. How can Hive inflation derail from its expected value (6% -> 10%)? Isn't it hardcoded?
  2. Will the Hive inflation correct itself? Do we have any mechanisms for this?

I thought that the Hive inflation is under strict terms. Can it for an absurd scenario reach 100% for example?

5 months ago in #hive by
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     5 months ago (edited) 

    The hardcoded inflation only pertains to what's allocated to the DHF, witness rewards, post/curation rewards and HP inflation.

    HBD converted back to HIVE is the primary driver for this inflation, which could be from peoples taking out savings to take advantage of the low HIVE price and/or the continued pressure from DHF proposal payouts.

    As for corrections, generally we could see HIVE become deflationary (negative inflation) if the price were to go up, this would be driven by people converting HIVE back into HBD as it's more favourable to do so when HIVE is worth more.

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       5 months ago  

      Its hardcoded only for the regular HIVE inflation. The conversions HBD-HIVE are aditional.
      Will it corect itself mostly depends on the HIVE price and HBD in circulation. The ultimate mechanisal is the haircut rule that devalues HBD.

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