I've been put in the whale penalty box for expressing unpopular opinions; so I decided to burn the rewards for this post as they will be downvoted away.
My unpopular opinion is that the 20% interest on HBD (HIVE Backed Dollars) was a profoundly stupid idea. HBD holders tend to convert their HBD to HIVE in weak markets.
HBD holders have dumped millions of HIVE onto the market in this current bear market. This pushes HIVE to new lows.
You can reduce the negative impact of HBD by going to your witness page and removing votes from witnesses who support 15% interest or higher and voting for witnesses that support 10% or lower.
If you delegate your vote; check the witness list for your delegate. If the delegate is supporting a high interest rates; then remove your delegation and vote in your self interest.
Facts and Impacts on HBD
Ausbit Bank started reporting the correct HIVE marketcap on its HBD Monitor. The page currently shows the HBD Marketcap is $10,481,833 and the HIVE Marketcap is $35,957,769. The HBD marketcap is now 22.571% of the HIVE Marketcap. There will be an HBD hair cut if HBD marketcap rose to 30% of the HIVE marketcap.
GeekGirl was reporting on HBD. Her reports showed the system was generating over $100,000 in HBD per month at 15% interest.
All of this HBD has the potential to get converted to HIVE. Smart investors calculate this into their valuation of HIVE.
We know for fact that HBD holders convert to HIVE because the HBD market was once over $14 million.
We know for fact that HBD holders convert HBD to HIVE because they've converted huge blocks of HBD to HIVE during this bear market.
The HBD marketcap has been falling steadily in the last few months. This is because HBD holders convert their holdings to HIVE in bear markets.
Again, I advocate that users remove their votes from any witness that votes 15% or higher and vote for witnesses opting for 10% or lower.
At 15% we are paying about $100,000 a month in interest on HBD.
At $0.07. 100,000 HBD generates 1,428,571 HIVE.
We are currently paying the equivalent of 1.4 million HIVE in HBD interest each month.
This is a huge weight. There is no way that we can burn or downvote our way out of the whole created by the stupid interest rate.
We have to attract 238 new dolphins a month to pay the stupid interest.
The HBD interest has created an impossible situation for the platform.
We can reduce the harm that is being done by the high interest by lowering it.
We are paying about 100,000 HBD a month in interest at 15%. If we reduced the rate from 15% to 12%; then we would be paying $80,000 a month in interest. If we reduced the rate to 10%; we would be paying $66,000 in interest.
I've studied monetary theory for several decades. The ideal interest rate is zero.
I could write some posts about why this is so.
Oh, but I would be downvoted by the whales for discussing monetary theory on this supposedly uncensored platform.
Anyway, if you want to do something positive for the platform, go to your witness page and remove votes from any witness voting 15% or higher and vote for active witnesses who chose 10% or lower.
You should vote now based on interest rates. You can go back to choosing your favorite witnesses after the rate change.
The night cafe image shows a beehive being sucked into a death spiral.
You don't appear to be on any list.
It looks like 'somebody' just didn't like the one post.
Perhaps they thought you were a bot, and found out different.
I've already altered my votes based on interest rates. I've long thought 10% was the extreme high we should support, and the rate should fall somewhere between there and the official CPI inflation rate reported by the US gov't. The latter is definitely underselling inflation, and the former is a decent investment benchmark for low-risk savings.
Here is the problem. We want people to use their HBD for commerce.
The best way to do this would be to change the conversion formula so that it converts an HBD to $1.01. The extra penny covers the conversion fee for using HBD.
People Hoard Shiny Coins
In the days of silver. People would hoard their shiny dollars and spend their worn dollars. You want to get rid of the cheap money first. The low interest rate might convince people to use their HBD first.
I am really hoping that witnesses lower their interest rate and that hive users temporarily vote on low interest.
Enough users have voted on lower interest that the witnesses will be forced to change the rate in the near future. I hope they lower it to 10% and not 12%.
I want people to use HBD for commerce. I don't want them to hoard it.
!WINE
I think you're misapplying Greaham's Law when you suggest a distinction between shiny and dull coins. People circulated coins of lower purity and hoarded the coins which had not been debased when the law requird they be treated the same in commerce. People don't spend US dimes and quarters minted before 1965 even though they may be worn and dull because those are 90% silver, and the new ones are cupro-nickel.
I agree HBD interest should not incentivize a HODL mentality. Right now, the interest rate rewards HODLing above all else, and the conversion rate to HIVE suggests conversion is in order as well. I appreciate the HBD stabilizer project keeping things from going bonkers like
STEEMdid at least.And what about your RTW token? Are you still going to create the Tribe?
They down voted the post in which I announced the creation of the coin!!!
I wanted to use RTW to fund the creation of a human directory. I will go ahead with the project but will not integrate it with HIVE.
I will keep the coin active for certain legal reasons. I want to use a traditional database instead of a blockchain as it has lower overhead.
!BEER
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I dont think lowering so fast would be good. It could triger panic in HBD holders head. And 100 000HBD ist still less then we put into DHF. But i also think we should lowering HBD interest.
Downvotes are nasty, but i wouldnt be so wory about them. They are still better then tradional hate which is present on every social media...
So dont give up. Write. Burn some hive. And connect with these who would like to repair hive economy :)
This is very interesting, thanks for sharing your thoughts on this
Do you know more about this? How much of a hair cut and how would it work?