The HIVE Supply Is Going Down | A Breakdown Of The HIVE Historical Supply

in LeoFinance13 days ago (edited)

The supply of a coin is quite an important thing. Also, its inflation. A very common question about a project is what it is supply?

As many things around here the HIVE supply is a bit special, and doesn’t have a simple answer 😊.
Let’s take a look!

01.png

If you take a look at the other coins, let’s say Bitcoin, the supply and the inflation over time is pretty simple. There are a certain amount of tokens circulation, inflation level set, and the supply keeps increasing over time. Usually in time the inflation drops.

However, as many things on Hive this is not that simple.

The reason?

The main reason would be the dual token economy with HIVE and HBD, and the conversions between this two. HIVE has its stablecoin, that in a sense its maybe before the time, since we are now seeing a lot of stablecoin popping out and the defi movement is partially evolving around them.

HIVE Created:

  • Author rewards, HP and HIVE
  • Curation rewards HP
  • Witness rewards HP
  • Staking rewards HP
  • HBD to HIVE Conversions

HIVE Removed:

  • HIVE to HBD conversions
  • HIVE ninja mine conversions in the DHF
  • Instant HIVE to HBD conversions from HIVE transfers to DHF
  • HIVE transfers to null
  • New accounts creation fee

Note: I want to emphasis that the data bellow is kind of revers engineering the supply. I have taken the current numbers for the supply and extracted all the way back. It is most likely not a 100% accurate, but it shows the overall picture pretty close. Also, I have not taken into account the new accounts creation fee.

Let’s dig into this!

HIVE Authors rewards

Here is the chart for the all-time HIVE authors rewards.

image001.png

Authors receive rewards on Hive in three currencies. Hive Power, HBD or liquid HIVE. The chart above represents the authors rewards in Hive Power and HIVE. HBD rewards are not included. The HBD supply will be analyzed separately.

Almost 45M Hive Power and HIVE rewarded to authors since inceptions. The period for the previous version of Hive is also included. If HBD rewards are included this number will be almost double. But users don’t convert HBD to HIVE instantly when they get the rewards, so this math is a bit of.

We can notice a flattening in the authors rewards towards the end of the chart, mainly because of the switch from 75/25 to 50/50 split in authors/curators share.

Curation rewards

The chart for the curation rewards looks like this.

image003.png

Luckily curation rewards are earned only in one currency, Hive Power, so things are a bit simpler here. I have kept the axis scale for the chart on a same level as for the authors rewards for better comparison. A total of 33.5M issued to curators.

Witness rewards

Currently 10% of the inflation goes to witness.

image005.png

The witnesses have received a total of 19.3M HIVE.

Staking rewards

Hive Power holders receive staking rewards for holding HP. Their HP is increased each day by a very tiny amount. The current APY for HP staking rewards is around 3.4%.

image007.png

A total of 20M to staking rewards and HP holders. The staking rewards are around 10k HIVE per day. Now the interesting thing is that they are generated from the HIVE per VEST ration and not with a hard transaction so to speak.

HIVE from HBD Conversions

HIVE can be generated by HBD conversions as well. When HBD is put in conversion its being destroyed in a period of 3 days and the average price is taken from that period when HIVE is printed.

image009.png

A lot of HIVE has been generated trough conversions. Authors that receive their rewards in HBD are converting a lot of it. Especially in the last period.

A total of 72.8M HIVE has been put in circulation from HBD conversions. If we compare this with the total author rewards of 45M, we can see that more HIVE has been generated in this way. This is mostly because of the previous cycle, bull and bear, when HBD was added and then converted at low price for a lot of HIVE.

The low price of HIVE is basically generating more inflation trough HBD conversion.

HIVE Virtual Supply From HBD

If we want to get the whole picture for the supply we need to include the HBD as well. To do this we need to convert the HBD to HIVE and added as virtual supply.

Here is the chart.

image015.png

The virtual supply of HIVE from HBD is fluctuating a lot. This is mostly because of the HIVE price. When the HIVE price is low, the virtual supply increases and the opposite. The top for the virtual supply is somewhere between 30M to 40M HIVE.

HIVE Removed From Circulation

HIVE is being removed in all the ways that was mentioned above, but mostly from conversions.

image013.png

We can see the huge spike in HIVE removed from circulation in the last month or two.
There is now a total of 48M that has been removed from circulation. Most of it is because of the HIVE to HBD conversions in the last months.

Historical HIVE Supply

If we combine all the supply generated from the rewards and the conversions above, we get this.

image017.png

As mentioned at the begging the chart is generated from the current supply and then extracting the rewards back to the starting supply.

We can notice that the HIVE supply has grown quite a lot in the last years. When accounted for the conversions the inflation rate was closing to 15% per year, not the 8% to 9% as designed. This resulted in doubling the HIVE supply in less than five years, reaching the peak in January 2021 with more than 420M virtual HIVE supply, from the starting around 210M.

Since the option for reverse conversions HIVE to HBD, the HIVE supply has dropped a lot, but also the virtual supply that accounts for the HBD as well.

In 2021 HIVE is deflationary!

This goes for the both parameters, HIVE and the virtual HIVE supply. At the start of the 2021 the HIVE supply was around 380M, and the virtual supply at 420M. Now the HIVE supply is at 356M, and the virtual HIVE supply at 394M. The HIVE supply has dropped for almost 10%, while the virtual supply for around 6%.

At the end one clean chart for the HIVE supply 😊.

image019.png

All the best
@dalz

Posted Using LeoFinance Beta

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Also, I have not taken into account the new accounts creation fee.

I was curious about this so I ran some queries on hivesql that I thought were worth sharing

SELECT SUM(fee) FROM DBHive.dbo.TxAccountCreates;
= 3,536,485.257 Hive burned in account creation fee's, ever

SELECT SUM(fee), YEAR([timestamp]) FROM DBHive.dbo.TxAccountCreates GROUP BY YEAR([timestamp]) ORDER BY YEAR([timestamp])

1,272,710.700 in 2016
1,027,099.667 in 2017
239,798.890 in 2018
16,803.000 in 2019
8,856.000 in 2020
971,250.000 in 2021

95%+ of those account creations are thanks to splinterlands via @steemmonsters

Great one!
Not that small. I was not sure where exactly these fees are stored. Thanks for the info, and will include them in the next repetition.

Quite a few great info about Hive in here.
So Hive is deflationary, what about HBD?
I see there are more than $28 million worth
in the system.
Great time for HBD to remain within the dollar range.
We need DEFI in the true sense of the term
these days.
Any ideas?
Great info like always.

!BEER

Posted Using LeoFinance Beta

The HBD supply is included in the virtual supply, where it is converted to HIVE. The total supply, including the virtual supply is deflationary as well.

Loading...

HIVE is being removed in all the ways that was mentioned above, but mostly from conversions.

image.png

While this may look to be the case, in reality it isn't as clear. There is over 28M HBD printed right now (outside of the HDF), this acts as a debt to the Hive blockchain as a promoise of $1 worth of Hive in the future.

At the current price, that is nearly 38M Hive that can be printed at any point.

Something to keep in mind when looking at the numbers.

Posted Using LeoFinance Beta

Yes a lot of HBD is created in the process. This is why I put the VIRTUAL SUPPLY that included the HBD converted to HIVE at prices at the moment. The virtual supply is down as well. This will stay that way as long as the HIVE price holds. If the prices drop then up we go :)

What does it mean out of the HDF?

Ignore HBD in the Hive Decentralized Fund (Proposals).

Posted Using LeoFinance Beta

Nice to see someone shine a light on hive tokenomics. I'm not well versed in the inner workings of Hive but the burning mechanisms seem to be very limited... Other than users deliberately burning hive with their posts, post promotion, and printing debt (HBD) there's nothing else right?

Terrific work @dalz. Thanks for delving into this and explaining it for all to understand.

When accounted for the conversions the inflation rate was closing to 15% per year, not the 8% to 9% as designed.

This is not a problem since growth can offset it. @splinterlands really did a great job bringing in new users although they are not, for the most part, getting involved in the other aspects of the ecosystem.

Over time, the need for RCs will also alter these numbers. But it is great to see how we have the ability to keep adjusting things up or day by having two tokens tied to the chain.

Posted Using LeoFinance Beta

Yes, that has already been confirmed, growth can eat inflation for dinner :)

In order to get resource credit, Hive power is needed
so in the long run a lot of Hive will have to move out of the system to help in that case.
The price will go up consistently.

!BEER

Posted Using LeoFinance Beta


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Hey mate,

What is the current inflation rate of the rewards pool and what effect is it going to have going forward. From memory, I think next year, the rewards pool (under normal circumstances without ridiculous HBD) should start to shrink as well - as the inflation rate continues moving toward the 1% mark due in about 14 years.

The formula for calculating HIVE inflation:

Hive inflation = (978 - (head_block_number / 250000)) / 100 = (978 – (45,550,382/250000))/100
Hive inflation = 7.96%

This is from my post almost a year ago. So its under 8%. Change the curent block and you will get the right number now. I'm afk :)

Cheers :)

Will be interesting to see a few years from now when the pool is 30% smaller

Its 7.5% now

What’s up with the missing data from the end of 2017? Was it from some disastrous HF on the old chain?

Doesn't that coincide with that massively botched HF where the blockchain was inaccessible for several days and (as I recall) was mired down in replays? There was also an occasion on which the rewards pool was reset(?) somehow and rewards all but dropped to zero while the pool was coming up. I remember having $30 posts one day, and then suddenly having 10c posts...

That vaguely rings a bell. I was a clueless noob back then.

Now a clueless veteran.

Not sure if it was a HF, as they are split. There was the RC HF that stopped people posting, but I think that was the end of 2018, wasn't it - I am getting too old to remember! :D

Not sure, that whats in the hivesql. Might be due to some hardfork, and tempary stop of payouts .... i was not around at the time :)

Fantastic post!

@tipu curate

Great article as always!

Seeing the actual supply growth over the years is nearly not as scary as one would think just looking at all the daily payouts from posts that are being created.

Thanks!
Yep not that much is created actually. Although in theory Hive gas rewarded around 100M to its users.



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What? So does this mean I should convert all my HIVE now before it's too late? 🤔

It means you should hold (or power up) your HIVE tokens because lower supply means basically higher price

Hmmm... Higher $ price or where is it higher?

It is only up to you in what currency you express the price, it may be USD, BTC, it doesn't matter.

In theory at least. Markets have a funny way of doing things though.

Long term, Hive is in a great position.

Posted Using LeoFinance Beta

In theory

Of course. It depends on many factors, supply is just one of them.

The conversion system helps maintain the HBD peg at $1.00 .

You should convert HBD to HIVE when the price of HBD is below $0.95 and you should convert HIVE to HBD when the prices of HBD is above $1.10; otherwise it is better to trade the currency on the marketplace.

The HBD to HIVE conversion reduces the HBD in circulation and the HIVE-HBD conversion increase it.

Wow, this is a really important finding, that the inflation rate has been 15%. And the chain had little or no understanding of this super important thing.

Damn... On top of the upside that comes with Hive it is also deflationary...

Hard to get your head around the tokenomics though. Still don't understand them completely tbh but I'll keep trying.

Posted Using LeoFinance Beta

Finally deflationary.

Really interesting to see how HBD will work out in the next time.

In the last few weeks I have realized that the value of HIVE is getting closer to the value of HBD and has remained that way for a long period of time, I don't know if it is by chance because of what you are describing in the publication.

This took a lot of work.

Thank you for your community service.

What a good analysis! This resource is commendable

I love these types of posts, thank you!

Posted using dapplr


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Really informative...I was wondering though, can anyone tell me how many Hive Power (HP) can be gotten from powering up 1 Hive?

Really?! So lets say I have 200HP, if I power it down, I would have 200 Hive? Correct me if I'm wrong pls

Yes it is the same thing

Oh wow...thanks for the clarification