Something Good Came From All the HBD Interest Rate Talk

While in a true debate, things may get heated up before common ground is reached (if that happens), it is much better, although less efficient, than dictatorship.

That's one of many reasons we love Hive and its decentralized nature, don't we? That is reflected in how infrastructure is organized and accessed, but also in the way some decisions are taken in a much more democratic way than in most places I have knowledge of in the cryptosphere. And I can tell you from experience, it goes beyond HP sometimes, which you won't find anywhere else. Social "stake" matters too!

Regardless of the final consensus on what will happen with the HBD interest rate (short-term or medium-term), I believe the passion of both sides showed the devs (many of whom consensus witnesses) that more dev work needs to be done at the core level around HBD to accommodate various types of investors while not putting serious pressure on the chain.

Source

I believe everyone knows how the savings account for HBD works right now.

You add liquid HBD to your savings account any time you want. From the time you add them to savings, they start generating interest, which can be collected once every 30 days globally (for everything you deposited in the savings account), by adding or removing as little as 0.001 HBD to the savings account (interfaces can have this process automated for you).

One of the contentious points of earning a 20% APR for HBD in the savings account seems to be the minimum lockup period. In fact, there is no lockup period (and no fees, since we are on Hive). You can add HBD to savings now and withdraw it a couple of seconds later. What exists is a 3-day delay after you hit withdraw (which, by the way, can be canceled). One doesn't earn interest while the HBD is delayed and waiting to be withdrawn, but just wanted to remark that technically a withdrawal delay is different than a lockup period (which would assume that the account holder can't touch the respective HBD for the respective lockup period of time).

So... a talk about multiple lockup periods for HBD with different APRs, lower for shorter durations and higher for longer ones existed for a significant amount of time on Hive. It may have started with Task, or it may have preceded his ideas about the second-layer bond system.

But nothing happened. And for something to happen, time locks at the core level need to be implemented first.

So it is my opinion that this debate around the 20% APR showed devs that time locks for HBD need to be prioritized.

Blocktrades revealed in the latest talk about HBD on the CTT podcast that they are going to work on time locks for HBD. It may be for the next hardfork if it will be postponed long enough, or for the following one, but certainly is on their radar now while in the past it wasn't from my memory of the discussion with Blocktrades at CryptoManiacs probably about a year back.

I've been a proponent of time locks (not sure they were called that way back then) ever since the topic came to be. It is something people sort of understand from working with banks their entire lives, although they can break classical term deposits at banks and lose all the interest. With a bond system at the second layer, this isn't necessary, because that provides the needed liquidity, but at the same time adds complexity for those who want to keep it simple... These are two systems that could very well work in parallel, like in the present economy.

It is also a normal tradeoff. In one of the arguments I read a few days ago, someone asked "Why should someone be paid 20% for doing nothing?" and a good reply was "That someone is doing something - keeps money on Hive!". The reply was good, but still, there is no way to know how committed that person is to deserve 20% yield on a stablecoin. Time locks will fix that.

Posted Using LeoFinance Alpha