How did Hive did in September 2024 from an inflation standpoint? Let’s take a look!
The projected inflation for Hive for 2024 is 6.0% on a yearly basis, or around 0.5% on a monthly basis.
Hive has a double currency system, HIVE and HBD, with conversions between them that add or remove HIVE from circulation on top of the regular inflation. Furthermore, the decentralized hive fund DHF, that serves as a DAO converts the HIVE that is in the DHF into HBD.
The @hbdstabilizer has also grown and it is playing an important role in the overall tokenomics, making conversions and trading on the internal market.
Because of this additional mechanics the HIVE inflation and supply can be drastically different in real time than the regular/projected one.
To be able to follow the HIVE supply we need to take a look at all the different ways HIVE is created, author, curation, witness rewards, conversions etc, then net that out with the HIVE burned from conversions, accounts fees, null transfers etc. To get the virtual supply we need to do the same for the HBD supply as well.
HIVE Created
Here is the chart.
The chart above includes:
- Author rewards
- Curation rewards
- Witness rewards
- Staking rewards
These are the regular ways new Hive enters circulation, and all of them are through vested HIVE, aka powered up. The regular inflation is around 80k HIVE per day.
We can notice the increase in the daily HIVE issued because it is dependent with the virtual hive supply, or the base for inflation. When the price of HIVE is low, the virtual hive supply increases, and when it is up, the virtual hive supply decreases. A small pullback in the last month.
The thing is the conversions are playing a major role in the ecosystem. Here is the chart again, including conversions.
We can notice that the HBD to HIVE conversions are the dominant in the chart. This works in both ways and a big part of them is converted back to HIVE, especially through the work of the stabilizer.
We can notice the spikes in the recent months because of the drop in the price of HIVE and some users taken advantage of this and converting HIVE to HBD.
HIVE Removed from Circulation
Here is the chart.
The above takes into consideration six different ways of HIVE removed:
- Ninja Mined HIVE To HBD Conversions In DHF
- HIVE transfers to DHF and converted to HBD
- Transfers to null
- Null as post beneficiary
- New accounts creation fee
- HIVE to HBD conversions
The HIVE transfers to the DHF are now dominant. These are transfers made by the stabilizer. We can see a few spikes in the HIVE to HBD conversions (blue), with one occurring just recently. These were due to the increase in the HBD price. We can also notice the drop in recent months, same as the opposite conversions due to the low volumes that the stabilizer is doing.
Historical HIVE Supply
When all the above is added and removed, we get this chart for the all-time HIVE supply.
Up until August 2021, the supply was almost steadily increasing with a small fluctuation. Then a drop in the supply in September 2021. Since then, from time to time we can see some drops in the supply in February and April 2023. In the last months the supply has seen an uptick.
September 2024 ended with 451.8M HIVE in circulation.
HBD Supply
Here is the chart for the HBD supply.
The light color is HBD in the DHF. The HBD in the DHF is not freely circulating HBD and only enters circulation when payouts to the DHF workers are made.
HBD is being created and removed in various ways, but the conversions play the major role here in both directions. Other ways HBD is created are DHF proposal payouts, author rewards and interest.
We can see that after a downtrend in 2022, in the last period the HBD supply is very stable around the 10.7M, with a decrease in the last months.
In the last month the HBD supply has decreased from 10.9M to 10.7M HBD.
Virtual HIVE Supply
When we add the HIVE equivalent supply from the HBD to the HIVE supply we get the chart below.
The light color is HIVE that in theory can be converted from HBD at the current market prices for HIVE.
We can see that the virtual supply fluctuates a lot, mostly because it is tied to the price of HIVE. As the price of HIVE drops, the virtual supply increases and the opposite.
We can notice the sharp increase in the virtual supply in the last period due to the drop in the HIVE price.
When we zoom in 2023 - 2024 we get this:
Here again we can see the increase in the virtual supply towards the end of the chart. The regular HIVE supply has slowly increased in the period.
Projected VS Realized HIVE Inflation in 2020 - 2024
This chart tells the story of the new HIVE entering circulation in 2020 – 2024.
We can notice the sharp drop back in September 2021, when there was a lot of HIVE burned for HBD due to the HBD high prices. Since then, the realized has mostly followed the projected inflation with some small bump on the road. In the beginning of 2023, there was again a reduction in the HIVE supply due to burns for HBD. A sharp growth towards the end of the chart due to the drop in the HIVE price.
Since the creation of HIVE four years ago the realized inflation is at 100M, or on average 25M per year, while the projected inflation is at 105M. A difference in 5M less HIVE created in the four-year period. This is mostly thanks to 2021 when the year ended with negative inflation.
Monthly Inflation
If we plot the monthly inflation in 2021-2024, we get this.
This is a chart for the period of 2021-2024. We can notice that the only negative months are in August and September 2021 and February 2023.
June, July and August 2024 are quite high in inflation with above 1% monthly inflation. September is just bellow the 1% mark, or 0.9%.
In terms of absolute numbers, the HIVE supply in September 2024 has increased from 447.7M to 451.8M, adding 4.1M HIVE in circulation, while the projected one is around 2M.
Yearly Inflation [%]
The yearly, projected and realized inflation looks like this.
With the last few months having high inflation the overall yearly trend for 2024 for Hive is to end above the projected one of 6%, or somewhere around 10% now. After nine months in the year, we are now close to 10% on a yearly basis and this will likely be very close to the yearly realized. First time when HIVE might end with double digit inflation after 2020. There should be a very drastic moves in the last quarter of the year for something to significantly change.
Net HIVE Created by Category in September 2024
Here is the new HIVE put in circulation by category for the month.
Conversions are positive with 1.7M HIVE created in this way. This is the main reason why there is now more HIVE in circulation. Conversions are the main variable that is changing the Hive inflation and when they are positive the inflation is above, or when they are negative the inflation is below the projected one.
The curation rewards are in the second spot with 1M HIVE. Next are the authors rewards with an 500k HIVE added.
Some HIVE was burned for @null as beneficiary and account creation fees.
Note that authors rewards are paid 50% HIVE, 50% HBD, and the HIVE share only is at 500k, while approximately the same amount was paid in HBD equivalent.
All the best
@dalz
This is my favorite chart @dalz :
Thanks for sharing this info. Awesome!
surprised to see so many conversions, I thought people just trade on market for HIVE.
Most of the conversions are from the stabilizer ... that goes on the internal market and support people trading :)
could you add a chart excluding stabilizer in the future?
I'm making reports on conversions as well ... usualy once every three-four months ... here is the last one from June. https://hive.blog/hive-133987/@dalz/hive-to-hbd-conversions-and-the-opposite-or-more-hive-created-from-conversions-or-june-2024
Ah okay, must've forgotten, thanks!
NP, I should have another one soonish :)
I don't understand much of Economics. The present situation as you analyzed is it good for Hive or not?
Does it mean the hive inflation is working against the value
Inflation always works against the value.
The value of hive has dropped a bit again. Inflation is clearly on the rise again.
It looks like supply is almost caught up with projected inflation bases on the projected vs realized chart.
It'll be bad in a sense if we actually suppass the projected on that chart but it looks like things are starting to settle.
If anything if there is another bull run and the price grows by a lot we could see another massive deflation event like in august 21 where there was iirc massive of conversions to HBD
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How much of the 10% yearly inflation went back into the dhf?
IF the stabilizer is putting much of that back into the dhf perhaps it should be accounted for in the yearly percentage?