This is a report for the Hive supply and inflation for March 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 7.25%.
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. It has been slowly decreasing in the period. The few spikes that we can see in July and then in October in 2021 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 1.7M was created from the regular in March 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 below the peg, of 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 3.5M HIVE was created from the conversions in the last month.
Cumulative from regular inflation and conversions a total of 5.3M HIVE was created in March 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 3.6M HIVE was removed in March 2022, on average 115k HIVE per day.
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 3.8M HBD was created in March2022, most of it from HIVE transfers to the DHF (2.3M) 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 3.2M HBD was removed in March 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.
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 March we are around 377M HIVE in circulation.
HBD Supply
Here is the chart for the HBD supply.
PHOTO
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 around 9.4M HBD.
In March the supply of HBD (excluding the DHF), decreased for around -0.5M. As mentioned, it was most because of the conversions to HIVE. HBD is now in great position with a low debt level around just 2%.
Virtual HIVE Supply
When we add the HIVE equivalent supply from the HBD in circulation to the HIVE supply we get the chart bellow.
When we zoom in 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. In March the virtual HIVE supply has decreased.
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 March 2022 the inflation is at 0.44%, while the virtual HIVE inflation is negative - 0.7%.
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.
HIVE Created And Removed By Category
Here is the new HIVE put in circulation by category.
We can see that conversions are the number one way for creating HIVE in March 2022. A part from the authors rewards are paid in HBD, so there is a share of authors rewards in the conversions as well, but not as big.
The curation rewards are second.
HIVE removed by category.
The transfers to the DHF are on the top here. This is basically the excess HIVE from the @hbdstabilizer. When these funds are sent back to the DHF they are instantly converted to HBD. On the second spot are the ninja mine conversions in the DHF.
Net HIVE created in March2022 1.67M.
All the best
@dalz
Posted Using LeoFinance Beta
i mean in a bear the inflation will skyrocket.
So the short-term data and deflationary scenarios are only proven if we stay deflationary in a bear.
And I would expect as the longer the bull goes, the more inflation we become because of HBD.
If swings are fast and extreme, inflation can become also extreme.
So only time will tell. I mean cheap hive is a very good thing for growing as long onboarding is not fixed.
0,1$ hive is the only price I would expect dapps to pay to onboard people for wallet creation.
Burn and increase price again.
I would not expect Splinterlands and friends run a multi million marketing campaign to pay twice, or even more for wallet creation.
In the past there was no hive to hbd conversions so hbd/sbd goes up. Now we have this and hbd stays at 1$.... hive supply goes down. From the past we can see that 2019 regular inflation was 8%, with conversions 12% ... so yes more but not so dramatic..... at this moment hbd is in very low supply compared to hive marketcap and we have only 2% debt.... that is rediculusly low .... the hbd supply can expand a lot from here without major concerns ....
all theory. In general, I agree.
But a swing to 10$, stay some weeks on avg there into bear could end up in major damage.
multiplier under 1$ increase exponential on conversions + conversions = higher MC after = more inflation out of that higher MC for max HBD supply.
So in game theory on max abuse, we have an exponential curve on hive inflation on conversations as the more volatile the market becomes.
I would love to see how luna performs in bear before we see massive increases.
wave algo stable coin losses today 20% for example. MC 1B.
so 200M loss in value. can start panic.
HBD was at 0.6 in the past...the world didnt end....At this point I'm in dilema is a hard peg a good or a bad thing. I mean projects go around such a big hurdle to keep the peg. Maybe it is better to have a loose peg like HBD. Just let everyone knows this upfront and manage their risk this ... if HIVE drops a lot ... then sorry ...haircut... HBD is no longer 1$ .... oh but its not a stablecoin.... well it is like 95% of the time, manage that week, month .... dunno just thinking out loud here
true. but on a big scale, it could be a problem.
and if haircut increase to 30% it can be a problem for the chain.
No risk no gain :)
10% is very conservative, 30% still is, 50% is medium risk
depending on the math.
If we calculate swings in ( remember we have no liquidations), it can end up in a drama inflation for hive.
That would end up in a drama token price. And this end up in " fuck you hive power holder".
I mean first should be a semi-protection of Hive power holder.
If hive inflate on a max abuse curve from 7$ to 0,2$ would mean 200% inflation.
HIVE tokenomics are looking stronger and stronger and I believe both assets are doing quite well. Both have their own use cases and HBD Stablizier simply balance them upon the market conditions, so that's another mechanism to keep things steady. I invest and grow both at once as they complement each other and thrive during bull or bear markets!
Posted Using LeoFinance Beta
I just reblog your posts. This report for the hive is incredible. I think there is many people like myself use hive-engine, but don't know how it works. Every month there is so many hives created !
And burned :)
We should promote these numbers all over the internet. HIVE has ultra low effective inflation and we still have so much to reward the authors, witnesses and fund DHF. HIVE is a real world case study on effectively combining moderately high emissions with similar levels of token burns.
Your reports are a pleasant and insightful sight to see as usual. I have even more faith in HIVE now and I'm definitely waiting to see $100 HIVE "Soon™".
!PIZZA
Posted Using LeoFinance Beta
Speaking of HBD interest, what do you think about increasing the interest from the current 12% APR to 15% APR. I heard that some of the wittnesses are already voting for this.
At this moment its fine to increase it, since the debt is very low, but might be an issue years down the road... we can bring it back then .... the bond idea might be a better solution
Really detailed and amazing. It is interesting to see how huge a conglomerate (if I may call it) Hive has been. All marketers (authors), investors (distributors), developers (manufacturers) and security officers (witnesses) have been well paid in the month of March.
Posted Using LeoFinance Beta
I really like your post because it expose me a lot about hive
How is it that curation rewards are so much more than author rewards?
because 50% of author rewards are paid in HBD
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👍👍👍👍
!PIZZA
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Thanks for the detailed analysis, @dalz!
Just wondering, how could this scenario change if we were to introduce a EUR backed Hive, or a JPY backed Hive, thus giving options to the non-USD based community?
I believe stable coins for CHF, EUR and JPY are too expensive given the ruling negative interest rates in these currencies. And using the HBD concept for these currencies would be a real alternative.
!HBIT
Posted Using LeoFinance Beta
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