This is a report for the Hive supply and inflation for February 2022. Tracking the HIVE supply has always been challenging and this monthly post aims to provide an overview of the flow of inflation, conversions etc.
Let’s take a look!
Hive has its regular inflation that follows the following formula
Hive inflation = (978 - (head_block_number / 250000)) / 100
At the moment the regular Hive inflation is at 7.3%.
The thing is Hive has a double currency system HIVE and HBD and there are conversions between them that add or remove HIVE from circulation on top of the regular inflation. Furthermore, there is HIVE in the DHF that is slowly being converted to HBD and also HIVE sent to the DHF is also converted to HBD. Because of this additional mechanics the HIVE inflation and supply can be drastically different in real time then the regular one.
To be able to follow the HIVE supply we need the following.
HIVE Created:
- Author rewards
- Curation rewards
- Witness rewards
- Staking rewards
- HIVE from HBD Conversions
HIVE Removed:
- HIVE to HBD conversions
- 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
Next the HBD.
HBD Created:
- 10% share of the inflation to the DHF
- HBD Author Rewards
- Interest payouts
- HIVE to HBD Conversions
- Ninja Mined HIVE To HBD Conversions In DHF
- HIVE transfers to DHF and converted to HBD
HBD Removed:
- HBD to HIVE Conversions
- Transfers to null + null as post beneficiary
When all the above is summed up, we will get all the differences between them and how much HIVE and HBD was created or removed in a certain time frame.
With this said let’s take a look at the charts.
HIVE Created From Regular Inflation
First the chart for the regular inflation for HIVE.
- Author rewards
- Curation Rewards
- Witness Rewards
- Staking Rewards
These are the regular ways HIVE is created without the conversions. All the above are paid as Hive Power or VESTS, except in a case where the HBD debt is high and post start receiving liquid HIVE instead of HBD.
As we can see this type of inflation is around 55k HIVE per day at the end of the year. It has been slowly decreasing in the period. The few spikes that we can see in July and then in October is where there were liquid HIVE payouts to posts because of the high debt for HBD.
The curation rewards take the biggest share of this type of inflation.
A total of 1.6M was created from the regular in February 2022.
HIVE Created From Conversions
When we add the conversions from HBD to HIVE on the chart above we get this.
We can notice that the conversions are quite volatile with big swings happening at occasions. HBD to HIVE conversions are happening when the price of HBD is bellow the peg, bellow one dollar. When this happens if you convert HBD to HIVE the blockchain will still give you HIVE for the value of HBD of one dollar, does making conversions profitable to external markets.
In the last year the @hbdstabilizer has taken on the role of stabilizing HBD and a large share of the conversions are made from this account, but there are other accounts doing it as well.
A total of 3.76M HIVE was created from the conversions in February 2022.
Cumulative from regular inflation and conversions a total of 5.5M HIVE was created in February 2022.
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
As we can see the conversions from HIVE to HBD that happened at the end of August and begging of September have impacted the chart heavily. On a few occasions there was 2M HIVE converted to HBD in one day.
Cumulative a total of 3M HIVE was removed in February 2022.
Now let’s take a look at HBD.
HBD Created
Here it the chart.
The above is a chart for HBD created without the conversions. It includes to following.
- 10% share of the inflation to the DHF
- HBD Author Rewards
- Interest payouts
- HIVE to HBD conversions
- Ninja Mined HIVE To HBD Conversions In DHF
- HIVE transfers to DHF and converted to HBD
Here again we can see that the conversions are dominant when it comes to adding a new supply of HBD. The August and July period is when a lot of HBD was created. Around 17M HBD was created in this period. The ninja mined HIVE conversions are also adding significant amounts of HBD in the DHF, especially with a high HIVE price. Note that the HBD in the DHF doesn’t count as debt.
A total of 3.5M HBD was created in February 2022, most of it from HIVE transfers to the DHF (2.1M) and from the ninja mine conversions in the DHF (0.9M).
HBD Removed
Now let’s take a look at HBD removed. Here is the chart.
HBD is mainly removed when converted to HIVE, but also with transfer to @null and setting null as beneficiary on posts rewards.
HBD is being converted to HIVE when the price is below the peg. We can see that in the last period there is a lot of HBD conversions. A total of 3.7M HBD was removed in February 2022, most of it from HIVE conversions.
HIVE Supply
When all the above is added and removed, we get this chart for the HIVE supply.
In 2021 up until August 2021, the supply was almost constant with a small fluctuation. Then a huge drop in the supply in August and September, from 384M to 357M.
An increase since then and at the end of February we are around 375M HIVE in circulation.
HBD Supply
Here is the chart for the HBD supply.
The light color is HBD in the DHF.
As we can see the HBD supply has expanded a lot in 2021, but it has been in the downtrend in the last months. While the HBD supply in the DHF is growing and it is maintaining the cumulative supply around 24M, the HBD supply excluding the DHF has been going down and now it is under 10M HBD.
In February the supply of HBD (excluding the DHF), decreased for -1.4M. As mentioned it was most because of the conversions to HIVE.
Virtual HIVE Supply
When we add the HIVE equivalent supply from the HBD in circulation to the HIVE supply we get the chart bellow.
If we ZOOM IN starting from 2021 we get this.
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 quite a lot, mostly because it is tied to the price of HIVE. As the price of HIVE increases, the virtual supply decreases and the opposite.
Monthly Inflation
If we plot the monthly inflation we get this.
The red is the HIVE only inflation and the light dark VIRTUAL HIVE inflation.
We can see that the highest the monthly inflation has been is 1.54%, while it has reached negative -3.83% in September 2021. For February 2022 the inflation is at 0.66%.
The yearly inflation, projected and realized looks like this.
| Yearly | Projected | Realized |
|---|---|---|
| 2017 | 9.04% | 8.12% |
| 2018 | 8.62% | 9.69% |
| 2019 | 8.20% | 12.85% |
| 2020 | 7.78% | 11.71% |
| 2021 | 7.36% | -2.71% |
| 2022 | 6.94% | - |
Quite the differences here. Again mainly because of the HBD conversions. 2022 is projected at around 7% (0.58% monthly). The first two months are slightly above that, will see how it goes for the rest of the year, as there is still a lot to come.
Supply Summary
Here is the new HIVE put in circulation by category.
| HIVE Created: | Feb-22 |
|---|---|
| Author rewards | 321,661 |
| Curation rewards | 789,240 |
| Witness rewards | 242,799 |
| Staking rewards | 372,658 |
| HIVE from HBD Conversions | 4,481,787 |
| Total | 6,208,145 |
| HIVE Removed: | Feb-22 |
|---|---|
| HIVE to HBD conversions | 33,732 |
| Ninja Mined HIVE To HBD Conversions In DHF | 1,026,985 |
| HIVE transfers to DHF and converted to HBD | 1,790,388 |
| Transfers to null + null as beneficiary | 1,002 |
| New accounts creation fee | 624 |
| Total | 2,852,731 |
The starting and ending balance for HIVE in February is as follows.
| Date | Hive Supply |
|---|---|
| 1-Feb-22 | 373,229,533 |
| 28-Feb-22 | 375,721,308 |
Net HIVE created in February 2022: 2,491,775.
All the best
@dalz
Posted Using LeoFinance Beta
Thanks for the report. Increasing the demand for HBD should be #1 priority. If we can do that, it will be a similar outcome to LUNA/UST...UST demand skyrocketed due to Anchor 20% interest, and to get those UST they burned LUNA, whuch make the price go crazy and brought many people in to the Terra ecosystem.
We need a platform or two that really utilizes HBD to set that off. Also, the 12% APR on HBD savings is rarely spoken of, we should be pushing that feature HARD.
Posted Using LeoFinance Beta
Yea I'm all on board for HBD :) Have been posting a lot about it. I feel we need more bridges to other defi projects.
Good to hear it, I hope that you reach many folks! About the bridges and such, do you know if HIVE has any plans to join ThorChain in the future? That would bring a lot of liquidity to the HIVE trading volume imo. I know that Monero and Haven Protocol are being implemented as we speak, but not sure of the timeline. I think they are adding new projects kinda slowly to make sure the platform is safe above all else. Its a shame that Thorchain wasted so much time implementing projects that were fads and of little value like DOGE.
thank you so much for this wonderful report.
U welcome!
Thanks for sharing!
Do you have or know of any article that explains the inflation formula?
Just out of curiosity :)
Posted Using LeoFinance Beta
It basically starts at 9.78% and goes down as the block number grow.
The divider 250000 determines the pace at witch the inflation will decrease .... at the moment its around 0.5% per year.
I see! Thanks!
Posted Using LeoFinance Beta
How come the inflation was negative in 2021 (-2.71%) and can it be the same in 2022?
Posted Using LeoFinance Beta
Its because HIVE was used to create HBD. If there is demand for HBD it can happen again.
What makes these two numbers not equal if rewards are split 50/50?
its because author rewards are 50% paid in HBD
Oh, ok, that accounts for it.
Thanks for making this data transparent for us.
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$WINE