Quora Hive Awareness Initiative, Question Answered: "Does Hive Blockchain print lesser HIVE tokens when HIVE token trades higher?"

in #hivequora • 4 years ago

The rate at which HIVE tokens are printed as liquid rewards does not directly depend on the price of the HIVE token. It is generally constant and independent of the price of HIVE with the following important exception I’m going to explain below.

The Hive blockchain prints three tokens as rewards:

HIVE

Hive Backed Dollar, as which the user can choose to get 50% of their author rewards, and

Vests, which are Hive Power by the name the blockchain code knows them.

When the value of all Hive Backed Dollars (HBD) combined (=market cap of HBD) is less than 9% of the value of all the existing tokens on the platform, then only HBDs are printed as liquid rewards. If the value of all HBDs is between 9% and 10% of the value of all the tokens, then between 0 and 100% of all the liquid part of content rewards (if the author chooses to get liquids in addition to Vests) are printed as HIVE tokens instead of HBDs to a linearly increasing degree as a function of the relative market cap of HBD. If the market cap of HBD is over 10%, then all the liquid rewards are HIVE.

So, in answer to your question: yes, in practice you get less new HIVE printed when the price of HIVE is high because the printing of HIVE as liquid author rewards is likely to not happen. But the overall effect is small.

——

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For more info on HIVE: Hive - The Blockchain & Cryptocurrency for Web 3.0

Join the HIVE Quora Space: The Hive

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4 years ago in #hivequora by
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     4 years ago  

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       last month (edited) 

      Just letting you know that you have downvoted my original content please review and remove the downvotes thank you

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