Why does the protocol want this [6% base inflation] to begin with?
The chain was originally conceived as an intentionally inflationary economy rather than a fixed (or very low inflation) supply model as with other cryptocoins. The idea being that the inflation would be spent to directly support the infrastructure (witnesses), attract more users, build bigger communities, and so forth. Opinions probably differ has to how that has worked out but it clearly hasn't been a huge success.
Whether that means it should be completely revamped is probably going to be highly controversial.
Yeah, I mean I totally get why there's a certain amount of inflation; it's also much simpler to build ongoing, stable incentive systems through inflation than through, let's say, a tax system.
My question was directed to the (protocol -born) yield on HBD specifically. If HBD is supposed to be a stable coin (which it does a really good job in being) that e.g. should be used to make stable payments within the ecosystem, why would the protocol want to generate additional inflation of HIVE to pay a yield to people who just sit on their HBD bags? The only conceivable answer that I can think of (and that's why I asked) is to attract outside capital to buy more HBD just to earn 15% interest. In theory, this could be a scenario if HBD had sufficient liquidity and investors could easily move money in and out of HBD (e.g. by having a deep USDT/HBD pair on Curve) but since there's hardly any liquidity for HBD outside the protocol itself, my theory is that this feels too risky for investors to do. But even if that were the case and we'd have 1bn HBD minted, this would cause a massive amount of additional HIVE issued just to pay for the 150m HBD interest over the years, no? And that would likely cause issues in the long run, even at a much higher HIVE base price originally (reminds me a little of the LUNA / UST situation back in the day).
Anyway, I think it's a great discussion to have as I think everyone here will agree that too much inflation probably isn't good for a token, and everyone wants their HIVE bags to go up, not down.
Originally the exchanges that listed STEEM (HIVE predecessor) all listed SBD (HBD predecessor) as well. It was much easier to trade in and out of the stable token.
Too bad it apparently got delisted everywhere.