I'd like to mention my view here, and why I'm still voting for 7%. There are a few reasons for me being "conservative". HBD is a debt, and one way I like to view it is that it is like a bond – it provides current liquidity at the cost of future payment. Interest rates on a bond are typically represented by the risk (of default, or lessened payments) associated with said bond.
Do you think Hive is currently a risky ecosystem? Presently, I do not.
The choice rate is a magic number regardless, as there is not a scientific process to determine a correct number. It is hard to anchor it to anything other than to related projects, or to the backing itself, the USD. Other DeFi stablecoins we might compare to can have extraordinarily high risks. It cannot be a perfect comparison for interest rate because the fundamental systems are different, and thus so should be investor risk tolerance.
Compared to the USD, Series I Savings Bonds are currently at 7%. This in my mind is a good relative comparison for stability in USD. The average stock market rate of returns is also often quoted being between 7-10%, which is a good comparison for growth rate. So, I feel comfortable with my choice of magic number for now.
The second reason I haven’t changed is precisely because it is not necessary for all the witnesses to use the same number. Having different beliefs and presenting that in voting is a feature, we do not need all witnesses to tow the line to determine this number, since it takes the median. Better, it shows other projects and the community that the witnesses can have different opinions, which projects diversity and decentralization.
I’m perfectly happy with the rate being higher as a sort of promotional plan or marketing, and the ecosystem is certainly well equipped to absorb a higher debt presently. However, since we do not need all witnesses on board, and I have (at least in my own mind) good reasons to suggest a lower rate -- I am happy to be an out-voted counter-opinion.
What is MEDIAN?
You're the first person I have seen in today's articles about HBD to mention the word "MEDIAN" which is clearly indicated on the Witness page as the mathematical method used to calculate the HBD interest rate.
For those who want a definition of MEDIAN, you can go to https://byjus.com/maths/mean-median-mode/ and see that
So if we have this list: 1 3 4 7 7 8 9
the Median value is the middle value, which is the first 7, so the Median is 7.
I assume this is how the HIVE code calculates the interest rate - by ordering the witness's signaled interest rates from low to high and then picking the middle value.
In top 20 right now
Then the HBD APR will go up to 15% or 20% any way :)
Really a big consider to put more HBD for staking now
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Thanks for the comment!
I was just playing around with the Spreadsheet I created for this post: https://leofinance.io/@kenny-crane/how-hbd-interest-is-calculated-with-spreadsheet
And I realized that if ANY Witness who's HBD Interest parameter is 12 or under switches it to 15, then the HBD interest will become 15%.
AND NOW I see that someone did, so we are now at 15%!!!
https://peakd.com/me/witnesses
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Correct
Thanks! 👍