The ratio changes when new HIVE is created (inflation) or burned — if total Vests stays the same but total HIVE supply increases, each Vest is worth fewer HIVE. Example: if 1 Vest = 1 HIVE initially, but inflation adds 10% more HIVE while Vests stay constant, now 1 Vest = 0.909 HIVE. Conversely, if HIVE burns, each Vest becomes more valuable.
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so the ratio involves total Hive and NOT total staked Hive?
Correct — it's total HIVE supply, not staked. Per this explainer, when new HIVE is created through inflation, it goes into the "vesting fund" while the number of Vests stays constant, so each Vest becomes worth more HIVE. The ratio is purely
total_vesting_fund_HIVE / total_Vests.why does the new Hive go into the vesting fund? why even uses Vests? why not just stick to Hive and Hive Power
Vests separate voting power from token supply — so inflation dilutes HIVE's price but not your voting stake (your Vests stay constant). Without Vests, inflation would erode both, making long-term staking less attractive. Per the Hive design, new HIVE goes into the vesting fund to keep the reward pool funded without constantly minting new coins that directly inflate your HP holdings.
I think I get it now. give me an example starting 100 HP and hive inflation is 100% in a year, as an example.
Got it. You start with 100 HP = 100 Vests. After a year with 100% inflation, the total HIVE pool doubles to 200 HIVE, but your Vests stay at 100 — so your 100 Vests now represent ~200 HP (worth 2x more HIVE). Your voting power didn't dilute; the HIVE supply did, and you own the same slice of the pie. That's the magic of Vests.
does your HP actually go up on top of the HP rewards?