Do you want 10-20% interest rate on your Hive dollars?
Throughout recent history, Hive dollars (HBD), and even more their precursors, stirred controversy in the community.
The reason: because they kept failing to live up to one of their main functions, to stay pegged to $1, and not much was done to attempt to fix that, people got fed up with the situation, plus enough hated the additional layer of learning curve they introduced at no perceivable benefit for the regular user.
There were, of course, defenders of Hive dollars. Who saw a great benefit in having a stable coin native to the ecosystem, provided HBD will become more stable-ish.
What changed recently? The core developers started to pay attention to Hive dollars and working little by little to improve it.
I wrote about it about two weeks ago, when blocktrades was talking about adding a Hive -> HBD conversion mechanism in HF25.
https://leofinance.io/@gadrian/is-hbd-pegging-really-coming
In the meantime that code is ready and included for HF25.
But, in a last minute proposal, when the code for HF25 was about to be frozen in order to start the final test phase, blocktrades came with another proposal, asking for our feedback.
Currently, by the decision of witnesses, all our Hive dollars receive a 3% interest rate. That's in no way competitive with the interests rates of other stable coins out there, but it was higher than zero we received before for HBD.
Now, we receive this 3% on HBD regardless if it's liquid or in our savings account.
What blocktrades proposes is to make the necessary code changes to include in HF25 (he says coding + testing for this will only take about 2 days), so that only HBD staked in the Savings account receive interest, and this will be more significant, proposed in the range of 10-20% annually.
He describes in the post what he thinks the benefits of using the savings account to distribute HBD interest and I'm not going to rehash his words. Just read the post if you are interested. Comments too.
I believe it's a good proposal with the only downside I see that you have a 3 days window to unstake your HBD before you can use it.
So I hope it will be included in HF25.
From here I see two potential developments which will greatly help Hive.
First of all, the focus so far has been on creating countermeasures against the pumping of HBD. Before the new Hive->HBD conversion which will be added in HF25, there was practically no mechanism at the blockchain level to prevent a pump of HBD. Only the fact that at some point it becomes profitable to exchange HBD to Hive and more and more people will. But that's not a core blockchain mechanism.
So, I believe Hive->HBD conversion will do its work.
But we will still have issues with the downward pressure for HBD. As we saw in the past, the haircut rule didn't stop it. Maybe this also will need some attention to really help making HBD more stable. Especially as we approach the bear market. With a stable-ish HBD earning substantial interest, maybe we will see less funds moving away from the ecosystem especially when everything drops?
Secondly, - and this is not something for core blockchain development - we need more use cases for Hive dollars. That includes those in the savings account. For HBD in the savings account, maybe there will be an option to collateralize them in the future? This way, especially if they are stable-ish and earning a substantial interest, there's no reason to sell them (unless the interest drops, and here's where witnesses can make adjustments).
To wrap up: great developments and proposals, but we can do even more, as always. We are definitely on the right path.
Posted Using LeoFinance Beta
My biggest frustration with Hive is the learning curve. Months after using the platform I still learn stuff I wish I knew much sooner. The knowledge is so spread out that it takes a while to understand the potential of using Hive. I don't have an answer on to "how" but Hive needs an onboarding process that even my parents could understand. I think Hive would attract a ton of new users if that kind of process existed and was easy to find.
I agree on the onboarding process part. In some areas there is that. Think Splinterlands if you are in any way connected to gaming, which has a smooth onboarding process and 'lives' on Hive. We will later this year have the microblogging app code-named Project Blank, which will have a much easier onboarding process.
Overall, you have to keep in mind Hive is an ecosystem, is pretty big and always growing. NOBODY knows it all. We all know fractions of it, the ones where our interests lie.
That is true for all ecosystems in crypto.
That is true outside crypto too.
If you are interested in finance (other than crypto), you might know well bonds or blue chips but be a complete beginner in Forex. Or you might have issues understanding margin, leverage trading etc.
There are layers upon layers in everything.
And you don't NEED to know everything to do well, even very well in an ecosystem like Hive. You just have to find your place and keep showing up daily and make your contribution. "Magic" things will happen with time.
Posted Using LeoFinance Beta
A very good review.
Having a stablecoin on Hive would be great. Thus far it has not worked although it is starting to get some attention now which is a positive. It is amazing how the shift in focus occurred.
As for the title to the question, the answer is of course I would like that. Is that a prudent move for the blockchain? That will require a lot of discussion. Being competitive with the market is important. What the number is I do not know.
Nevertheless, we are at a starting point which is important. We will see where the path leads us next.
Posted Using LeoFinance Beta
10% can be attempted at first and impact measured. If I were to guess without any data backing up my words, 10% on a focused group of accounts (which move HBD to savings) compared to 3% to all, has a lower impact. Just think of the exchanges. They either won't stake customers' HBD or they will partly do it. And these HBD are a significant share of the total.
If things turn into an unexpected direction, witnesses can change it rather quickly. This is the benefit of having it as a witness parameter. Changes can be made without a hardfork.
Posted Using LeoFinance Beta
if this becomes within this range then I hope people would love to have a stable coin in account because it will earn a good amount of interest.
Posted Using LeoFinance Beta
Yup, that's what I'm thinking too.
Posted Using LeoFinance Beta