Is the 20 % interest rate on HBD holding Hive price down?

Open question...

This is not a rant by me on the 20 % interest on the Hive Backed Dollars, I must admit, I have highly profited from it the last few months. And I still am right now. But more and more accounts are opposed to it, and are saying that it is holding the price of Hive down. Some arguments of @yintercept and @geneeverett in a discussion a few days ago, deserve some attention. A closer look at that.

The stabilisation protocol of Hive Backed Dollar

I don't know shit about the algorithm that is behind the stabilisation of HBD, but according to @geneeverett, every time that HBD has gone below the one dollar peg, Hive is dumped into the market to push it back up. If that is really how the mechanism works, then that is indeed a reason for Hive to lose value. And it happens several times per week that HBD is below its peg, more than the other way around. So, he has a point there. But the question is, has the interest rate on HBD something to do with this? I don't see the connection.

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Hive-Engine tokens and Hive losing value due to this

According to @yintercept, the last raise of the interest rate has dramatically dropped the influx of funds into Hive Engine, as people are no longer selling their HBD for SWAP.HIVE. This has drained the liquidity on Hive Engine and dropped the price of community tokens substantially. I am just repeating what @yintercept says here, I have no clue if this is correct or not. But it could most definitely be, as it sounds very plausible.

We should be promoting Hive instead of HBD

This is something I have heard multiple times before, and I stand completely by this. It is for sure not the smartest move in my opinion to promote Hive Backed Dollar so hard, and in meanwhile not promoting Hive. Is it a possibility to higher the inflation of powered up Hive from the 2.89 % it is right now to for instance 7 %, and lower HBD to the same rate? Just a suggestion here. This would definitely incentivise people to power up their Hive, instead of leaving them liquid on an exchange. Or that inflation just too big? All questions I don't have the answer to, but are sure worth asking.

Anyone with an opinion on this, feel free to comment, as we can only become smarter by opening the discussion on this. And who knows, somebody has the perfect formula to make Hive more attractive to the outside world.

Sincerely,

Pele23

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(Edited)

I'm not sure about impact you are describing, it doesn't sound totally out of the question, but there are longer term motives to discuss.

HP (Hive Power) gives a holder the following opportunities, I'm not sure this is an all inclusive list, but it covers the basics.

  1. Resource Credits.
  2. Influence on Governance
  3. Voting Power
  4. Future opportunity if the price goes up.

Once a person has reached a fairly modest amount of RCs, there is no longer a need to continue to power up for RCs.

Due to the distribution having a meaningful contribution in governance takes a very large stake.

Voting power only matters to those who want to build the social applications of Hive. Many aren't that interested in this side, although it sometimes feels like the main drive, because that is where we communicate.

If the Hive price goes up like any other token there is a great opportunity to grow your stake, while HBD on the hand remains stable and pays interest.

In my opinion what the HBD interest drives is to allow those who don't wish to participate in the social elements a reasonable place to grow their holdings and we see less participation from those who weren't into it in the first place and over time I think that improves the social side and allows for future growth.

It's just one point of view, I look forward to reading others.

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“ If the Hive price goes up like any other token there is a great opportunity to grow your stake, while HBD on the hand remains stable and pays interest.“

But it’s not stable at all. It moves 10% many days (1.00 to .90) and often is hanging out around .93 or .95.

My concern although I don’t think presented perfectly above is the new wave of many here promoting it outside our platform as “the best and most stable coin” and it’s just not true. My concern is if all energy bu many is promoting HBD more then Hive it’s going to let many people down and hurt our reputation. I don’t think it’s going to destroy the platform, I think smart minds would fork and find a solution b4 that happened but it’s just not a stable token at all. If promoted for use as a overall stable coin it’s going to be judged like a strait up stable coin and it won’t work. I am anti HBD all together at this point. I say fork and turn it all into Hive. We don’t need it anymore here. But use here at least we all understand it. Promoting HBD for general stablecoin use outside Hive community won’t end well. 20% interest isn’t permanent and many I see promoting it as a sure thing indefinitely which is just crazy.

It’s all respect ✊
Smart people can disagree.
Just don’t like a platform I care about being promoted like most scams are. Hive isn’t a scam at all. I don’t wanna see it hurt by HBD failing expectations….

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If you want the price of hive to be fractions of a penny then removing HBD is your best bet. HBD is one of the only and best ways we can keep the people who are constantly selling from dumping the token further.

It’s a bear market, hive is performing pretty well considering the sheer cliff many other coins and projects have fallen off in these downturns. It hasn’t lost its market position much at all and continues to perform despite significant amounts of people selling the token left and right.

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continues to perform despite significant amounts of people selling the token left and right

I agree completely, this was my thoughts since the bear market started, that Hive has been holding up.. in that sense Hive is pretty strong, it does not go up a lot in bull markets, but also dont go down a lot in bear markets. Its probably because Hive has a lot of real users, all with their own opponions, so its strong in that sense.

Its lacks pumpamentals though, which Richard Heart and Lasse Ehlers related products have! Hive is good for storing text on the blockchain in posts, not so much for anything else.

#lassecash

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I don’t see why removing HBD should have that effect, can you elaborate on that?

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So right now people on hive have four things they can do with liquid rewards.
They can convert or exchange hive for HBD which in many cases keeps the funds on the chain here.
They can power up the hive which is even better for locking the assets away and preventing wild fluctuations in speculation and price for many people.
They can spend it on things like hive engine, Splinterlands etc.
They can transfer it out and sell it on an exchange.

If you eliminate HBD then everyone gets paid in liquid hive and hive power only. When we had this previously it caused even more of a downward pressure on the hive token because if you have the main token, hive, readily available and not needing to exchange it for something else, it prevents people from holding an asset longer term. Right now we are getting paid, according to an algorithm calculation, HBD as the liquid asset until the ratio of hive to HBD is at a certain threshold (I don’t know this exact number but I’m sure if you poke around blocktrades you can find it somewhere) forces people to do different things with their post rewards. They could either drop the HBD into savings, and locking away a liquid asset and preventing spur of the moment speculation and dumping of the token, or exchange it on the internal market or convert it into hive both which still do stay on the chain here and usually don’t involve outside exchanges.

If you remove HBD entirely, we’ve seen in the past that it just causes further price dumps of the token and people drive it to the ground to then buy it up, wait for more upward price movement and then dump again. It’s not guaranteed that having HBD around makes it impossible for these things to happen but it significantly reduces the chances of it happening which is great. I and many others keep the hive and HBD transactions internal to hive without going to exchanges. If it was just hive, this wouldn’t be the case and it’s too liberal of a fiscal policy for the chain governance. Taking the more conservative approach and incentivizing people to keep their funds on the chain here and in savings accounts is far better long term. It also creates good use cases which is important.

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I disagree, I respect you and it’s all love and respect here. I just have a different opinion. Time will tell

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But it’s not stable at all. It moves 10% many days (1.00 to .90) and often is hanging out around .93 or .95.

The price is stable on the internal exchange.

Stop looking at the price on Coingecko. That is misleading.

It tracks Upbit which is a closed exchange to those outside of S. Korea and Bittrex which has no volume and often has the Hive wallets locked.

HBD on the internal exchange and pHBD are both holding near a dollar. They fluctuate a bit but are mostly within 1%-2%.

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I still think my point is valid. I just feel differently then u guys. I respect u a lot. I just disagree. Time will tell and there’s no need to stress about having different opinions. It’s all love and respect ✊
I just think hbd won’t go well this way. If I’m wrong I’ll be happy.

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Oh no not you again, an older woman that verbally abused me in SteemSpeak back in the day... I hope to never meet you in person and I dont really want contact with a bad person like you, but for my friend @pele23, I will read your BS comment and respond sense to it!! Only for my friend, after that I never want contact with you again EVERY ON MY LIFE!!!

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(Edited)

The comment is just boring, the truth of the matter is, the Hive Blockchain works well for storing text in posts, the rest is kind-of messed up by BALLHEADs, so I dont give much credit to it.

I came up with the ideas for LasseCash to build a trustful and virtuos environment, and that succeded. There is no drama, no corruption or what not on LasseCash, instead quality posts gets rewarded and longterm mentality is rewarded.

Hive is like the dumb highway that LasseCash runs on, brainwashed ballheads secure the Hive blockchain and they do a good job at that, the POB on Hive is fucked up and I dont see it fix within the first 5 years... who knows after that?

Peace to @pele23 and out!!

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I wouldn’t say that HBD is a bad thing to have at 20% interest but I don’t know what the long term implications of it being at that rate are. There are lots of opportunities for people who want to be more active and use the hive side or those who want passive and go HBD. Previously the savings accounts didn’t exist in the way that they do now and HBD is a lot more stable near the soft peg that the chain has set for it. I don’t think it’s going to be perfect but that’s okay, the only things that are perfect are ones that are scams and highly centralized and manipulated. I think hive and HBD have performed quite well in this regard!

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I don't know shit about the algorithm that is behind the stabilisation of HBD, but according to @geneeverett, every time that HBD has gone below the one dollar peg, Hive is dumped into the market to push it back up. If that is really how the mechanism works, then that is indeed a reason for Hive to lose value.

Yet more people converted HBD --> $HIVE over the last month. In fact, it was a net of 700,000 HBD that disappeared.

If people were pessimistic about $HIVE, they would have been going the other way. Seems like more people want this rather than HBD.

In the last month the supply of HBD (excluding the DHF), decreased for around -0.7M. As mentioned, it was most because of the conversions to HIVE. With this amount of HBD and the HIVE price the debt is now at 3.2%.

https://leofinance.io/@dalz/hive-inflation-and-supply-for-june-2022

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Ok, thanks for that information, that puts things in perspective. I don't know where you guys get all that information. But it sure is interesting. From all I have read now, I conclude that the 20 % is a good thing for the ecosystem.

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I don't know shit about the algorithm that is behind the stabilisation of HBD, but according to @geneeverett, every time that HBD has gone below the one dollar peg, Hive is dumped into the market to push it back up.

HBD is worth how much the HIVE you get after the 3 day conversion period is worth. If HBD price goes below 1 USD, there are likely traders dumping HIVE in hope to get an edge by converting but if HIVE price development seems bearish at that moment the conversion may not yield enough value because the exchange rate used in conversion is the average price of the conversion period.

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(Edited)

I think that 20% is almost nothing in a space where some things do 10000X, like HEX did in 2 years and Shiba Inu in 9 months.

I personally dont use "stablecoins", for many reasons, for one its a confusing word, because the dollar is falling in value constantly, so its not stable at all. Other then that I never hold anything in HBD, USDC or anyother dollar pegged token or coin, I just buy what I think is the best and live with the extreme volatility. Now I know some people need these dollar-pegged coins to make sure they can pay bills or what not.

That being said, I think the Hive community got a lot of issues with the people in it, most of the whales are ballheads, that could be one of the big reasons the price is going sideways for 6 years.

I use the blockchain to document my journey as the text is stored forever, but I dont invest much money in something that is ran by ballheads primarily, fix that and you will probably fix the hive price!!

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As to whether or not Hive Engine tokens are affected by this or not, I dont think LasseCash value is affected by which % you give on HBD or Hive Power, its more a question about who is buying and who is selling.

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