I am sure many of you have already noticed that today in author rewards those who are set on the 50/50 split there is no HBD payment. The rewards are 50% HIVE for staking and 50% HIVE liquid. I actually cannot recall the last time this happened and do think this is the first time on the HIVE blockchain. The old chain I can recall a couple of times this occurring and this is only a safety mechanism controlling the debt and not a crisis to worry about. The HIVE pricing being so low has got us here and this is just how it is. If HIVE was at $0.10c which may or may not happen over the next few days or weeks then HBD would be back to normal with regards to author payouts.
New users or those that only know HIVE may have been stressing not sure what is going on and why I have tried to explain this in layman's terms so everyone can understand this. A developer may use different terms that passes over our heads and why I thought it best to have a crack at understanding this scenario.
Safety Mechanism For HIVE Debt
You may be wondering what debt and from my understanding which is fairly basic so bear with me. Bank notes used to be known as a promissory note with the words I promise to pay the bearer x amount in gold. The actual promise stopped in the UK back in 1931 and now that bank note can be swapped or exchanged for that notes value. The Hive Backed Dollar (HBD) is exactly the same as it has a value of $1 and you will receive $1 worth of HIVE which is about 12 HIVE today. Each HBD is owed 12 HIVE today and from my understanding the amount of HIVE tied up in HBD has reached the 30% threshold and why no more HBD is being printed. This is a safety mechanism designed to protect HIVE and as I mentioned before is quite normal and does happen.
I was trying to calculate where we currently are looking at the HIVE blockchain market information with current supply showing 514,877,274.500 HIVE and 34,080,489.923 HBD (roughly 408 965 879 HIVE) which gives us around 923 million HIVE. Virtual HIVE supply is at 930 million so I am not sure if the debt ratio of 30% was changed with the last Hard Fork plus it also excludes the DHF fund. The debt ratio currently shows a rate of 44.666 % which if we add the DHF fund we will probably be closer to the 30%. Again I am assuming here and trying to help myself and others understand this as we should know this being on HIVE for many years now. Maybe I am assuming too much, but this is my understanding and if wrong would love to be corrected in the comments so we can understand this once and for all.
Whilst HIVE is now being printed along with no HBD this means in theory the debt ratio will reduce slowly over time and at some point in the future HBD will print again when it is below the 30% ratio rate. If by some miracle HIVE goes back to $0.10c or higher then this will all return to normal because then each HBD owes less HIVE.
Normally we do get some type of warning when the safety measure kicks in by receiving HIVE (50%) and HBD + HIVE as the 50% liquid. This time we did not experience this and went straight into HIVE for all author reward pay puts. Maybe this did happen earlier today and I missed this event as it is slightly different due to it happening so rarely. Nothing really changes and we just continue like normal.
Last night I did notice the APR for those with staked HP rise and is sitting at 3.92% which is high considering the bench mark was always around 3% being just under or just over. The APR is literally 30% higher as a percentage over the normal with 0.92 representing the extras.
Posted Using INLEO
First off I love this platform, because it is censorship free for the most part. However it also needs to be rewarding people for staking. I have gone from about 4000 HIVE to over 7000 HIVE and my account value is lower now than it was at 4K. If I had cashed out and taken the earnings elsewhere I would have higher value not lower. Good thing that is not why I use this platform.
This platform is in major need of some new people coming here and using the platform. Long gone are the days when you heard about HIVE anywhere. There almost no major influencers driving traffic here as there is no incentive to do so. I have a 40K subscriber Youtube channel, but none of the major whales here are interested in my promotion of the platform. Kinda tells you everything you need to know.
It used to be half the youtubers I watched in alt media would be promoting steemit, which became HIVE, however that is totally gone because the wrong horses were backed. Most of the alt media that were chosen to promote this platform are charlatans and were only here for the money. Since the money is gone, they are gone.
Whoever the top people here are on HIVE, ya'll need to identify some actual good hearted people who make interesting and engaging content to drive traffic here. I am not talking about myself as this is a hobby for me, but content creators who care more about content than money. The type of people that will promote HIVE because it is not censored rather than because they are being paid off to do so.
Without increasing traffic here, bringing in new people, this platform will likely continue to lose value. Something has to change.
I agree Hive definitely needs a steady flow of new users signing up. I think it will happen as more and more people are unemployed and have to find alternative types of income. I went from a value of $250k down to $15k so the volatility is normal in crypto.
Any idea why the staked HP APR is so high? Not complaining but it adds to the inflation and decreases value further. Also the 15% HBD savings APR needs to go down in these times.
Yes the staked APR climbing so high is concerning and have no clue why it has climbed so high. 3% was the benchmark we could always rely on and it would fluctuate around this mark, but normally return. 3.94% is big and I do not think it is good even though we are now earning much more. Staked HBD should also be reduced and think 10% would be still very good.
Wow! I have never actually seen this happen before... I am not impacted as I have 100% Staked Hive set on all my posts...
Yes over a crypto cycle this scenario does happen and is all price related to the number of HIVE required to create or pay 1 HBD.
Interesting, thanks for pointing it out.
I am so ignorant about rewards I didn’t even notice this.
What about $HBD savings rewards? Are these on hold too?
I do not think those are affected by this and this is only author rewards that those users chose the 50/50 pay out option.
Cool. We’ll see in a month. !LOLZ
This significantly increases the value prop of ACE
Thanks. Then I need to look at it then as I have not really read up on ACE yet.
In what way?
I didn't notice it. The debt ratio is now backed below 30%.
Great post, thanks for sharing, was wondering what was going on..
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Thanks for this. I never pay attention as much as I should. Wouldn't have known about this had I not seen this post.
I was surprised it happened so soon. I was expecting it needed to go a bit lower.
it's just a HIVE-stacking season.
It is the first time I've experience it, and it is understandable with the current situation
It has happened once before, briefly ... but no transition this time around -- one day getting HBD, next day just Hive!
I also got surprised to see my rewards being Hive and HP