Direct from the desk of Dane Williams.
The move to now offer a 20% APR on HBD is a game changer for algorithmic stablecoins.
Did you see the news that Hive Backed Dollars (HBD) now pays 20% APR simply for holding the stablecoin in the savings section of your Hive account?
Yep, you can now earn a whopping 20% APR simply for holding Hive’s own stablecoin within an account you own the keys to.
No third party platforms, no payments in dodgy DeFi coins, just a 20% return on your savings, paid out in HBD.
Huge.
As things stand, this cements HBD’s place amongst the best algorithmic stablecoins in the entire crypto market.
Sleep on the price of HIVE at your own peril
In the aftermath of the announcement, one point of conversation that has come up is what this means for the price of HIVE and why anyone would now choose to power up HIVE over simply pocketing the stable returns?
These questions around the price of HIVE are completely valid and on the surface they may seem to make sense.
But dig a little deeper and you’ll quickly discover that not only do I expect the price of HIVE to hold its own, I actually expect it to make Hive Power holders rich.
Here’s why.
While HBD’s 20% APR is higher than the 13ish% that you can get via inflation and curation rewards in HIVE, you miss out on one key aspect.
That being any potential increase in the price of HIVE.
Ask yourself this.
Do you believe that the price of HIVE will appreciate faster than 20% per year?
Well, it certainly did over the last 12 months:
Yep, that’s a lazy 5x in price from the bottom to now.
While your blogging feed may be clogged with bearish sentiment due to the fact that price has pulled back from its $3 all time high, the reality is that HIVE is still 5x from its yearly bottom.
All I can say here is sleep on the price of HIVE at your own peril.
If HIVE went just another 5x to $5, it still wouldn’t have anything close to the market cap required to crack the top 20.
When you consider the absolute centralised, VC-controlled, shitcoin dross that makes up pretty much every position from 10-100, then you can see the potential we’re sitting on with HIVE.
A token that offers holders not only the ability to transact on a Web3 account they own, but also a say in governance of the blockchain itself.
And this doesn’t even take into account the technical mechanism behind how HBD is created and why the move to 20% is sustainable.
The demand for HIVE itself is not going anywhere.
Final thoughts on HBD now offering 20% APR
I’m still firmly of the belief that the only way to mitigate stablecoin risk is to shift your investment and usage focus away from those projects employing a collateralised business model.
Algorithmic stablecoins are the only way forward and running on the base layer of the decentralised Hive blockchain makes HBD a prime option.
With the wider crypto community going absolutely gaga over Terra Luna’s so called foundation buying up an absolute boatload of Bitcoin to help UST keep its peg during times of high market volatility, I find myself being pushed away.
If you have a centralised company… oh sorry, foundation in charge of ‘stabilising’ your so called algorithmic stablecoin, then you may as well be in USDT.
At least Tether tells you they back their coins 1:1, lulz.
As the only algorithmic stablecoin that runs on the base layer of a truly decentralised blockchain, Hive Backed Dollars and HIVE itself are primed for a massive 2022.
Best of probabilities to you.
Posted Using LeoFinance Beta
Undoubtedly, 20% of APR in HBD can be a great incentive for HBD to attract new investors but before that happens we have to solve a problem that is the liquidity of the HBD which is too low and currently the process to have HBD is not the simplest in the world.
However, I think the liquidity that will be created at Polygon through Polycub can help a lot in terms of liquidity.
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The LP on Polygon can help a great deal if we can get the liquidity into there. The challenge is that there isnt a lot out there to begin with. There is about 3 million in the savings. How much of that will move over.
Someone is going to have to convert a lot of HIVE to HBD. But who is going to do it?
Posted Using LeoFinance Beta
If the returns are incentive to do it, then the conversions will get done.
It's just all about offering incentive.
Posted Using LeoFinance Beta
Yes if there is a need someone will fill it. After all, Blocktrades has incentive to keep his site filled with HBD. If people are using his app to get a hold of it, he will serve that need.
Posted Using LeoFinance Beta
What does this mean for inflation? It will encourage hodlers and I can see HIVE increasing too. Good news.
Posted Using LeoFinance Beta
In terms of inflation, dalz latest post took a look at the numbers and explained them quite well:
Have a read of the comments section on that one too.
Posted Using LeoFinance Beta
Did you see this?
Dalz also did a write up about UST and how it is looking to expand in 2022.
They are adding 6 billion TerraUSD and some are claiming 20% on HBD is too high.
Posted Using LeoFinance Beta
Building hbd and hive is now my priority now because nothing beats this at the moment in the crypto world.
Posted Using LeoFinance Beta
I am reasonably optimistic about those too.
Posted Using LeoFinance Beta
Just keep stacking, my friend!
Posted Using LeoFinance Beta
I will do just that
Posted Using LeoFinance Beta
I am no expert but how these guys at Terra changed the mechanics of LUNA-UST, made me push away as well. Now HBD giving 20%, it's going to be my preference and not UST on Anchor.
Posted Using LeoFinance Beta
I would hope so.
Posted Using LeoFinance Beta
I just don't understand how there is absolutely zero negativity around allowing the 'foundation' to use BTC reserves at their will.
Every single story is 100% positive about how great this is for a so called algorithmic stablecoin.
Come onnnn.
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Howdy @forexbrokr, I am thinking I am going to take some of my reserve fiat savings and buy some more HBD and put that into savings. This is money that I do not anticipate needing any time soon but I can still access in a few days if an emergency strikes.
Posted Using LeoFinance Beta
That is the point. I have some money that I am going to move over. I just need to decide how to go about it.
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Hey John,
Your strategy is an example of why moving the HBD APR to 20% is going to be good for HIVE.
So to bring money from the outside, you're going to be buying HIVE off an exchange and then using the internal market to swap it into HBD.
That's fresh, outside money coming into the ecosystem and you won't be the only one doing this.
Posted Using LeoFinance Beta
Thanks, Dane, I appreciate the input.
These are great news. Gives me something to think about, I really have to evaluate some other investments (like INDEX), if they are worth to keep or move those founds to HBD.
Posted Using LeoFinance Beta
The investor's dilemma. A lot of good choices.
Posted Using LeoFinance Beta
It all depends on your risk tolerance and what you're looking to get out of your investments.
You'll figure it out :)
Posted Using LeoFinance Beta
The 20% HBD is offering is the main deal now. Saving 20% of HBD every day for 6 months is alot of coin in your wallet.
Posted Using LeoFinance Beta
It will grow things a great deal. You can get rich of 20% a year for 20 or 30 years.
Posted Using LeoFinance Beta
That's enough savings
Posted Using LeoFinance Beta
Yep, the power of compounding!
Posted Using LeoFinance Beta
Thank you
Posted Using LeoFinance Beta
Only time will tell... I will still power up parts of my hive income. All HBD I own is already in savings, for some reason I'm not touching that, so 20% sounds great!
I can see that people may stop powering up and buy HBD instead too
Posted Using LeoFinance Beta
That's the conservative approach.
Everyone has different risk-tolerance and goals they are trying to reach.
HIVE and HBD are each different investment tools to reach them.
Posted Using LeoFinance Beta
True, they are different risk tolerance and different investments. For now I'm loving the idea of HBD with a 20% return. And Leo implementing the ad revenue into leo power.
For now I'm in the lesser risk.. though with all the defi projects coming out of leofinance I'm starting to move into a riskier tolerance.
Posted Using LeoFinance Beta
20% is no joke,like right now I am the happiest person now.any reward I am earning now is going straight to my savings because this just an opportunity to get better financially.hbd all the way
Posted Using LeoFinance Beta
A very smart plan. There are a lot of good things going on with Hive Backed Dollar right now.
Posted Using LeoFinance Beta
No dispute about that,it is crystal clear
Posted Using LeoFinance Beta
Save and compound.
Like you said, 20% is certainly no joke :)
Posted Using LeoFinance Beta
The wave of contentment is really a positive for Hive.
The true value resides with Hive with HBD coming second.
I am holding all year long.
!BEER
Posted using LeoFinance Mobile
It does seem like many were happy with the move.
Posted Using LeoFinance Beta
I have to agree with you in that I'm prioritising building my HIVE stack first.
HBD is the conservative, wealth protecting option.
I'm nowhere near where I want to be!
Posted Using LeoFinance Beta
What we have left to do is to promote this fact across cryptosphere. If we can get some cryptocurrency channels to cover how we are offering these sustainable interest rates without even using some smart contract that could have exploits. HIVE has already got some of the best technologies in cryptosphere. We also have some terrible marketing. Unfortunately I'm not on traditional social media. If anyone wants to crowdfund an ad campaign; I will be pitching in some funds.
!PIZZA
Posted Using LeoFinance Beta
Get the liquidity first before spreading the word. Worst thing in the world is to get a lot of traffic going and then have nobody be able to get HBD.
This is what we need to avoid.
Posted Using LeoFinance Beta
I don't understand why not a single crypto journalist hasn't picked up the story yet.
An algorithmic stablecoin on a truly decentralised blockchain offering a sustainable 20% is HUGE news.
This isn't a bullshit centralised stablecoin that regulators can touch.
Surely someone is going to grab the story and run with it soon.
Posted Using LeoFinance Beta
I am not sure too many people have contacts with the media. There are a few but I think the ones who handled that in the past left.
But yes it is almost like it is a conspiracy against Hive. We will just have to pay for a press release I guess.
Posted Using LeoFinance Beta
I am going to do both things (increase HP and HBD). Both of them seem important and they will be generating yield.
Posted Using LeoFinance Beta
Hive is in the beast mood now at the moment..
Posted Using LeoFinance Beta
That is my approach. Keep adding to each.
Posted Using LeoFinance Beta
Yeah, I'm not going to change what I'm doing.
I'm still in HIVE stacking mode as I'm happy to take the risk because I want the opportunity for more upside.
But when the time comes to move into stables, HBD's 20% APR is now an absolute no brainer.
I don't even have to consider taking things onto another platform.
Posted Using LeoFinance Beta
What are the biggest risks at holding a massive amount of hbd? I'm thinking about converting some fiat into hbd......and what is the best to that? Buy Hive on exchange and convert it into hbd?
Posted Using LeoFinance Beta
As Task said, the risk of holding HBD is that the price of HIVE goes to zero.
When it comes to the best way to convert fiat to HBD, your best bet is to buy HIVE off an exchange, transfer it into your account and then use the internal market to buy HBD with your HIVE.
In terms of getting to the internal market, I recommend using the PeakD front-end.
Go to your wallet, scroll down to the HBD section, click the dropdown and then select Market:
This will take you to Hive's internal market where you can trade HIVE for HBD at a good price.
Do it in small chunks as the liquidity isn't high.
Posted Using LeoFinance Beta
I like that you put up pictures. They help. LOL
Posted Using LeoFinance Beta
Thank you for this great instructions. I will think about the whole thing again and than decide. Thank you!😊
what speaks against it to use this converting function?
The blockchain dies or the price of $HIVE goes to zero. Outside that, it is a very low risk.
Depends upon how much you are looking at converting. The liquidity is tight right now. If a relatively low amount, buy HIVE and then trade it on the internal exchange. Might take a bit of time to get your orders filled since liquidity isnt great there but it will get it done over an afternoon or so.
Posted Using LeoFinance Beta
And thank you too! I think the possibility that Hive goes to zero is very low. I am very bullish on Hive. Best community in crypto space♥️
I agree with you. There is no way it goes that low. Too many strong hands in this. If we got down to near the 10 cent level, I bet there would be a ton of buyers.
Posted Using LeoFinance Beta
what speaks against it to use this converting function?
I am not following. Please restate your question.
Posted Using LeoFinance Beta
Have to admit, being newish to the whole Hive experiance I'm still on a huge learning curve, but i see the value in holding coins/tokens so moved what HBD i could into savings, and plan to increase that holding as and when i get more. I mean where else can you get 20% APR. As the saying goes "great oaks from little acorns grow" !hivebits
Posted Using LeoFinance Beta
What's HBIT?
Success! You mined .9 HBIT and the user you replied to received .1 HBIT on your behalf. mine | about | wallet | market | tools | discord | community | <><
Welcome and keep learning. Glad to see you here. As you peel back the layers of Hive, you will find a lot of great things.
Obviously you already found out about the 20% APR on the savings. That is a great thing to uncover. LOL
Posted Using LeoFinance Beta
Welcome to Hive :)
Where else can you get 20% APR on stablecoins?
Literally nowhere haha.
I see you're in the UK, but have you considered moving any of your fiat savings into USD and then into HBD to take advantage?
Surely the 19% difference makes up for any GBP/USD exchange rate risk?
Posted Using LeoFinance Beta
That's is certainly something to consider, when/if i find I have some savings and/or some spare crypto from other sources to use. But that might a little ways off just yet, but the seed is pplanted so thanks. !hivebits
Posted Using LeoFinance Beta
I think that HBD APR increasing to 20% will fuel also the Hive price as the supply might shrink. Who doesn't want to hold a piece of the governance? I surely do and simply build at once on both HIVE and HBD.
Posted Using LeoFinance Beta
I am not sure too many will use the conversion tool. That is likely only going to be larger players who are fully knowledgeable about how Hive operates.
We still have a lot way to go for distribution to pick up.
Posted Using LeoFinance Beta
Like Task said, I'm not sure a lot will use the convert tool and effect the overall supply in that manner.
But yep, the blockchain governance aspect of the HIVE token will remain hugely important.
Not to mention the potential price rises in HIVE due to supply/demand mechanics unrelated to the conversion mechanic.
I'm super bullish on HIVE.
Posted Using LeoFinance Beta
Rewarding the hodlers is an incredible strategy to improve the overall value and quality of the Hive token and platform in general, and as I've said before quickly selling off tokens for quick cash isn't a good idea, and besides, sleeping on Hive price is an absolutely bad idea now I must say.
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We just need to keep adding to these platforms. A lot of ideas floating around, this can end up being an incentive to create much better things.
I am looking forward to the next 6 months.
Posted Using LeoFinance Beta
Hive is amazing because the platform and all of its associated dApps reward users in so many different ways.
If you believe in what is being built here, you also want to be stacking HIVE.
Posted Using LeoFinance Beta
I have a feeling all of this will be pulled together around the same time. It looks like things are haphazard but we will soon realize how things start to tie in.
Enough foundation in place means that other things start to correlate and leverage off each other.
Posted Using LeoFinance Beta
I love that the witnesses voted this in 20% apr on stable coin is absolutely nuts and I do expect it to bring some more people over to hive as you'd be a fool to miss apr like that on stables...
from ListNerds :)
Posted Using LeoFinance Beta
Great to see LISTNERDS working also. A lot of cool stuff going on with Hive.
The 20% APR is terrific. We have a few other issues to work out but we can start addressing them. This was the first step.
Posted Using LeoFinance Beta
Yeah there really is a lot going on for hive compared to a few years ago, I'm also hoping to begin development of my game once I can find a trustworthy developer.
I'd like to better understand where this 20% comes from.
!LOLZ
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It is from the inflation in the token.
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As Task said, it's just inflation.
Check out dalz' latest post for a deep dive into the numbers:
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Upvoted and Tweeted:
~~~ embed:1514396519738187780?s=20&t=GarxY7zg8IAY5IYUmAMIIg twitter metadata:c2hvcnRzZWdtZW50c3x8aHR0cHM6Ly90d2l0dGVyLmNvbS9zaG9ydHNlZ21lbnRzL3N0YXR1cy8xNTE0Mzk2NTE5NzM4MTg3NzgwfA== ~~~
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Thanks for spreading the HBD gospel further :)
Posted Using LeoFinance Beta
A lot of good opportunities. We are going to see some great things with HBD. What is really interesting is some of the ideas of building second layer solutions using the HBD. This is where things really start to get interesting.
Posted Using LeoFinance Beta
Do you happen to be referring to LeoFinance's upcoming pHBD-USDC LP on Polygon? ;)
Finally starting to solve the liquidity problem!
Posted Using LeoFinance Beta
That could be a big one. We need to get that done quikly.
Khal said he is looking to add 6 figures in HBD and having issues with it.
Posted Using LeoFinance Beta
I am just going to do nothing and wait lol!
Posted Using LeoFinance Beta
Just keep earning and stacking HIVE.
Nothing has to change :)
Posted Using LeoFinance Beta
Great Post!
!1UP
Thanks to you and the Cartel.
I'm certainly keeping an eye on your excellent project :)
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!LUV
!PIZZA
@tin.aung.soe(2/4) gave you LUV.
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Thanks for your support as always Tin.
Have some !PIZZA back :)
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I don't know if I buy this one, surly 20% is not sustainable and it seems like an accounting gimmick, where does the income come from?, my opinion on it here
Yep, sustainability is all that matters in the end.
I'll jump across and share my thoughts on your post a bit later.
Posted Using LeoFinance Beta
Thanks for the information. Every post like this that I read, helps me understand what is going on more.
Posted Using LeoFinance Beta
Keep immersing yourself @rcaine. You will get it over time. There is a lot to learn but we all can help out by diving deeper. There will always be someone new requiring guidance.
Posted Using LeoFinance Beta
No worries mate.
Hive is right on the cutting edge of what Web3 is and will eventually become.
We're actually all learning here! :)
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~~~ embed:1514396519738187780 twitter metadata:c2hvcnRzZWdtZW50c3x8aHR0cHM6Ly90d2l0dGVyLmNvbS9zaG9ydHNlZ21lbnRzL3N0YXR1cy8xNTE0Mzk2NTE5NzM4MTg3NzgwfA== ~~~
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