HBD interest rate is slowly changing
HBD interest rate was set to 20% APR by many witnesses but recently there has been a small change where many witnesses have started signaling a little lower HBD interest. I think I already wrote an article on this topic when discussions happened long back. One of the biggest reasons why people try and invest in Hive is the APR given by HBD. None of the other decentralized blockchains provide a 20% APR for on-chain savings with 3 days cooldown. This is one of the competitive phenomena we have in Hive.
The HBD percentage is currently the median percentage of the top 21 witnesses. That's the reason why the price keeps dipping to 19 and sometimes back to 20%. When many top 20 witnesses start entering an APR value less than 20 percent, then that will be taken into consideration and that will be set as the APR percentage.
Onboarding is a big challenge in Hive. We can somehow talk and bring people inside Hive. But they all ask why they should stay invested. When we explain the benefits Hive blockchain is providing, we also explain the 20% APR that Hive is providing. This is a very good selling point. I think that having a 20% APR has not affected the stats or how HBD issuing works.
At the time of writing this article, the Debt ratio was 7%. To stay at 1$, the ratio should be below 30% but it looks like 7% is a very nice number to have. I don't know much about the other technical details of how it is calculated and things like that. (Maybe something for me to explore later) but from what I heard, I think we have a lot more time for 20% APR to become dangerous for us. I felt if it was good, it was not bad to continue as it is and have a 20% APR instead of anything lesser.
Returns from 20% APR
I would like to take India as an example. We have a 30% tax on crypto gains. So, let's say we have 20% APR for our HBD in savings, the returns will be taxed at 30% and ultimately we will be getting only 14% as the return. For conversion and transactions, there would be some fees for which let's say we lose 2% more. Ultimately when we cash out the interest, the value would be only 12%. These days there are a few real-world investments that already provide close to 15% APR. Maybe the banks are not providing that much APR but there are some other investment opportunities and mutual funds that provide a decent APR sometimes even more than 15% and the need for investing in a crypto-stable coin doesn't matter.
The above reason is one thing that I think should be considered when the witnesses are thinking about reducing the APR percentage. If anyone wants to support my thoughts and continue to have 20% APR, they have to vote on witnesses that are signaling 20% APR. There are a few witnesses who have set a low APR which I think I might shuffle my vote to. I would like to choose witnesses who have set 20% APR which I think is fair and competitive and good to sell to newbies. I have been running my witness node with 20% as the value for HBD APR.
If you like what I'm doing on Hive, you can vote me as a witness with the links below.
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Denmark have a tax on crypto at 37-53% xD
ouch.
that is high.
Yes, its quite high :D
But my salary is taxed at 37% so its not far from that :D
oh so not so bad then.
Nope, its pretty standard haha :D
Nah, its fine. I like it. We have free schools, free healthcare and good public infrastructure for trains, busses and metroes :D
Even though public transport aint free
Well we get taxed out the ass too but the money gets sent to other countries in the way of bombs and tanks, or just filling politicians pockets. The US is becoming a 3rd world country, so when I say taxation is theft, yeah, it really is...
Ohh ye, the USA is a 3rd country seen by anyone from Europe xD
Your healthcare, studentdebt and gun laws are insanely outdated or not existing. The USA is such a joke, only your millitary is strong at this point :D
Yeah, our gun laws kind of suck. Anything other than the 2nd Amendment is unconstitutional. I am a big time gun fan and believe we have full rights to have whatever kind of firearms we want. If the military and police have it, we should be able to as well.
Old news.
Det ved vi jo allerede 😉 Håber de snart opdaterer loven. Og helst til det samme som i Portugal, hvis det jeg har hørt er rigtigt 😆
Eller måske bare give krypto samme regler & procenter som aktier, ville være en start :D
Jeg ved faktisk ikke hvad den ligger på - "verdens dårligste finans rådgiver", kalder de mig i byen 😂
This is not good 🥺🥺
Wow. Hope you earn enough to pay that high tax.
You can live off minimum wage here if you don't fuck around all the time xD
So its quite easy.
Minimum wage is 22 dollars/h right now, I think
22$ per hour is a decent number.
Ohh for sure, yes.
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I don’t like that though but if it is for the benefit of HBD, why not?
Let’s go!!!!
Im lucky there is no tax for crypto where I live, I also believe that the 20% APR is not crazy although many believe is too high and thats fine with me too, Im not the type of person who needs to be right as long as there is equilibrium Im fine with it, in the long term I can see APR on both Hive and HBD lowering down once there are more L2 projects adding transactions on their own tokens but there is a long way to go before that happens
Some layer 2 projects are offering some APR based investments too. If the 20% APR goes down, people will start switching elsewhere.
Would not be bad if any important witness set it to 23% to compensate the rest 😅
Lol they take the median price so 23 % alone may not work. 😉
btw, you have my vote
Thanks for the vote. Cheers!
20% HBD is by far one of the best things that is happening in hive and can attract investors and people. Based on the dept and other stats i have read from dalz and many other well known people around Hive, there is currently no actual reason or issue that should lead to lower APR, in fact we can even increase it a bit more.
Honestly, we should pay more attention on a more well structured hive fund that i some people are taking advantage even know and thousands of dollars are in people's pocket that are offering nothing.
Btw i won't ask you to tell me who says about a lower APR but is there somewhere i can check it out myself or there are relevant posts from witnesses that are talking about this, these days? It's time to change some of my votes i guess based on what i find.
You can check the list here to see who is setting what.
https://primersion.com/witnesses
hahah write after i wrote the comment i got frustrated, found it via peakD and changed at least 10 votes :P, i gave you my vote as well!
Thanks for the information. I think 20% APR is very attractive and a good selliing point for Hive. I hope it stays the same or gets higher.😀 You have my vote.
Yeah let's hope 20% stays. Thanks for the votes.
I'm still not sold that having a 20% APR on HBD is making people come here and hold. In fact I believe it's one of the aggressive selling that happens on hive as I would suspect most heavy investors collect the HBD each month and then sell it off. I'm also not sold on people trusting it. I would imagine most seeing a crazy high APR like 20% and after seeing what happened with every other company that offered 10% APR or higher close up shop, rug pull etc. If anything it might look like a red flag.
Selling is not a problem with just HBD interest alone. It happens with Hive too or pretty much all the inflation we have including witness rewards.
We are failing big time in onboarding and retention of users. At least HBD is making people hold some assets here hoping that gradually they get to know Hive. 20% APR is not the only selling point but that's an important selling point which no other blockchains have.
How I wish it can still be sustained that level it has been before
I am really hoping that 20% should be restored back and even go higher instead of reducing
Yeah let's hope.