The second batch of HBD bonds as per the announcement post from February 26, 2024 was sold out in a week.
The sale was for a 12k HBD, offering a 10% premium on HBD interest, or currently a cumulative 30%, for a 100-day lockup, in tranches of 10x200 and 10x1000. There was a 10 day sale period, but most of it sold out after three days. If the funds are withdrawn prior to the maturity date, the bond buyers receive only the principal with no interest.
The accounts that bought the bonds are as follows:
| Account | Bonds Bought [HBD] | Bonds Buying Date | Maturity Date | Expected payout |
|---|---|---|---|---|
| @newilluminati | 5,700 | 2/29/2024 | 6/8/2024 | 6,168.5 |
| @dannyshine | 2,100 | 2/29/2024 | 6/8/2024 | 2,272.6 |
| @deanliu | 2,000 | 2/27/2024 | 6/6/2024 | 2,164.4 |
| @freecompliments | 1,000 | 2/26/2024 | 6/5/2024 | 1,082.2 |
| @techcoderx | 400 | 2/26/2024 | 6/5/2024 | 432.9 |
| @trostparadox | 200 | 2/26/2024 | 6/5/2024 | 216.4 |
| @randumb | 200 | 3/3/2024 | 6/11/2024 | 216.4 |
| @kenny-crane | 200 | 2/26/2024 | 6/5/2024 | 216.4 |
| @dkid14 | 200 | 2/27/2024 | 6/6/2024 | 216.4 |
The details for the maturity date and the amount of expected payouts are in the table above. A total of 9 accounts took participation, with 8 of them participating in the previous sale and on new participant. As seen from the table the payout dates are at the beginning of June 2024.
Next, I just want to iterate some of the conditions from the announcement post under which the sale was conducted, and some of the general rules.
How will this Work?
First things first. I will be managing the funds, and this is not a thrustless project. By sending HBD you are putting trust in me to manage them and execute as stated in this post. I’m doing it out of curiosity and hope to learn some valuable lessons on the way, giving feedback for a possible on chain solution and maybe build and iterate in the future.
A 10% premium on top of the current 20% for a 100 days lockup
To make this project attractive enough it will be paying out a 10% premium on top of the current APR for the HBD in savings. It is currently at 20%, meaning a total of 30%, for a 100 days lockup. If the base APR falls, for example to 15%, then the cumulative will be 25%. The only guarantee is the 10% premium, not a fixed APR rate of 30%.
The dedicated account from managing the funds is @hbd.bonds.
The bonds sale is capped at 12k HBD.
The tranches are set to be in $1000 and $200. A 10 sets of $1000, and 10 of $200. Users can purchase more than one package, meaning a $2000, $3000, or $200, $400, as long as they are in the amounts as stated above.
Where will the Yield Come from?
The old question where will the yield come from? The short answer is I will be making up the difference, investing the 10% premium. For a 12k HBD, the 100 days interest at 20% is 658 HBD, while for 30% is 986 HBD. So, I’m risking a 329 HBD for the project. Buyers will have a cost of the 100 days lockup and there will be a soft penalty for early withdrawal.
For simplicity a 1000 HBD will earn 55 HBD for 100 days with 20% interest, while with 30% interest it will earn 82 HBD. A 27 HBD more.
Note on the 30% cumulative APR. I don’t control the base APR that is set by the witnesses of 20%. If this changes in the period, so will the cumulative APR. The 10% premium is guaranteed, so if the base APR is said 18%, the cumulative will be 28% etc.
Early Wwithdrawal Penalty
Any buyers of the bond are free to request the funds back prior to the expiration period of 100 days. But in this case, there will be no interest paid. The users will simply receive the HBD he/she putted in with no additional interest back. Any earned interest from early withdrawals will go towards the payouts of the premium for the users that will wait for the bonds to expire or reach maturity as it is known in the finance world.
Any user who asks for early withdrawal of funds will receive the funds between 24 to 84 hours (1 to 3.5 days). If there are incidental withdrawals I will cover up for early liquidity, but I keep the right to wait for the withdrawal period out of savings of 3.5 days in case there is a lot of requests for early withdrawals.
Updates and Communication
I will post monthly updates here. Any request for early withdrawals needs to be made here in the comments, or on the future update posts, tagging me @dalz, as official channel, and then additional users can contact me on discord as a reminder, user: #dalz3699.
What’s New this Time?
The first sale was for 10k, while this one is slightly increased to 12k. The minimum participation was 100 HBD, while now its 200 HBD. The lockup period was 90 days, while now is 100 days. This is due to the fact that claiming HBD is once per month, and there is a lag between claims, interest payouts, so not all funds are available at the 90 days mark.
In the previous sale all the HBD was put in savings and them me making up the 250 HBD difference. Around half, or 125 was provided from posts rewards, while the other half is from me. This time I will use part of the funds to invest in Bitcoin. A total of 1500 HBD (12.5% of the funds) will be invested in Bitcoin, 500 HBD each month, making a sort of DCA on a monthly level. The risk from the price of Bitcoin going up or down will be taken again from me, and the bond buyers will receive as promised. If the price of BTC is lower, I will just need to hodl more, and if its higher, any excess profit will be put in used for future bond sales.
Having in mind that only 12% of the funds will be put in BTC, and the other 88% will remain as HBD the risk here is relatively low and acceptable.
Sustainability
I have written a whole posts about ideas of sustainability. In short, the options are inflation, trading, fees, lending, staking, ventures. For more details visit the post.
In the first sale I have partially implemented fees with the early withdrawal and now I’m going after the trading option with small steps. Inflation is also partially implemented from the Hive inflation and the posts rewards. A real boost for this can be issuing new asset, aka token for the project, but this is far in the future for now. I want the project to have some assets and success behind it, before doing this.
The real challenge here is scale. Funding a 10k, or 20k bond sale is not an issue and I can personally easily fund it. The challenge is funding a 1M bond sale. If executed correctly and with time (years), the project might get there eventually, but we will need to wait and see. This project showcases another use case for HBD, as it will not be possible if HBD is not there in the first place. The long-term vision is a dedicated web, thrustless with smart contracts in the background. Will we get there? I don’t know. The advantage of this project is that is cyclical. If everything is ok, I can iterate, improve and continue, and if not, users will be paid out and just stop making another sale, with no consequences for the users.
For all the accounts that bought in the first sale please follow the @hbd.bonds account as I will be making periodically short reports from there as well.
post beneficiary @yield.reserves
All the best
@dalz
I am really interested in this project and its outcomes @dalz. If I would have read it before, I would fors sure have bought 200 or even 1.000 for @hive.helps.
To be honest, I do not think that it is really sustainable. The 20 % of HBD is already very high. To be able to consistently do 30 % APR with the money you get from the bond buyers is difficult in my eyes.
Especially since you completely take the risk, you should be well rewarded, but this only happens, when you make around 35 to 40 % APR.
Since I have trust in you, I would buy it anytime, but I do not think that you can do many waves of these bond emmissions.
Would be glad you prove me the opposite :-)
Thanks for this Follow Up report. I'm happy to be a buyer of both of your bonds. Looking forward to the future of HBD bonds and everything else happening here on HIVE.
The 30% on 100 days lock-up looks very attractive indeed.
It is clear that there is demand for this product on Hive and it sells out quickly. Perhaps it could be automated and expanded from the chain itself.
It's a wonderful initiative for those who are already staking HBD, now they can earn 10% extra, which is great.
Having 30% interest after 100days seem like a cool business
Makes sense
Bearing hundred percent loss for any downturn in the price of BTC is endearing, your transparency is without any doubt.
This is a good thing you have mentioned and all people will definitely want to participate in it because every person wants to try their luck.
I am really quite interested in participating in this experiment one day. Probably one day when I have accumulated a lot of HBD, to actually try out. Then I can give it a try definitely