HBD Interest Payouts for March 2021. Coinbase May Want to List Hive/HBD Now.

in LeoFinance12 days ago (edited)

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The purpose of this post is to explore another interesting feature of our Hive blockchain - receiving interest on HBD. I would like share my understanding of how it works and present HBD interest payout data for the month of March 2021. All data is retrieved using HiveSQL which provides a separate table VOInterests with information like owner, interest and timestamp when interest was issued. I do not fully understand how exactly HBD interest payout works. I have more questions than answers on this topic. I hope those who have better knowledge can fill in the blanks.

Paying interest on HBD is one of Hive's unique features. Witnesses have an ability to change an APR parameter which would decide if interest is paid and at what APR. You can you check at hiveblocks.com, the APR column to see which witnesses using what value for this. It seems like current consensus is to issue 3% interest on HBD. This number might be slightly different based on how the actual APR is calculated. Does it take the average, majority value, or the median. For simplicity purposes let's go with 3%.

In this past all witnesses kept away using this parameter and for the most part the HBD interest rate has always been 0%. Witnesses decided to change this about a month ago. Here is how @smooth describes the reasons behind setting HBD interest rate parameter to 3%:

The goal is to encourage some additional holding of HBD, which will reduce the potential for HBD to drop below $1, in turn keeping the HBD stabilizer operating in a mode where it continually buys HIVE and sequesters it in the DAO. This, in effect, transmits demand from investors looking for yield (of which there is ample and widespread demand in the world today) into buy pressure for HIVE. This interest is sustainable, and indeed profitable for Hive stakeholders, to the extent that HIVE appreciates, over time, at a higher rate than the interest. To the extent that Hive is successful, this should be self-evident, and in some sense may also be self-fulfilling.

According to the data I retrieved using HiveSQL, it looks like first HBD interest payouts started on March 1st, 20021.

For the month or March total of 10429.131 HBD was paid out in 6486 transactions. Out of 6486 transactions payouts were made to 6415 unique accounts. For the most part in this month each receiving account got on interest payout. However, some accounts received two. I am not sure what that is. For example if you look at the chart below displaying top 100 interest recipients, you may notice @peak.fund received two payments. These payouts are also only 3 days apart. Perhaps it has to do when the HBD was deposited to the account.

Since the cases when one account received interest payout more than once were rare, I left the data as is without summing up the amount received for each account.

TOP 100 HBD Interest Payouts For March 2021

#NameAmountDate
1upbitsteem3348.25402021-03-08 13:13:03
2hive.fund2895.74802021-03-13 19:31:42
3bittrex1232.93702021-03-12 19:23:48
4hot.dunamu341.78202021-03-16 03:58:09
5peak.fund265.36602021-03-18 17:30:39
6stan157.97002021-03-29 15:09:15
7phototutorials107.14902021-03-02 17:04:09
8springfield100.81902021-03-31 01:33:45
9altcoinpost100.18402021-03-02 16:59:09
10dlife81.81102021-03-02 17:08:39
11user.dunamu74.11502021-03-18 06:26:03
12peak.fund65.26902021-03-15 17:18:09
13gopax-deposit62.30602021-03-09 22:20:39
14teamsmooth-mm56.99202021-03-26 18:26:24
15steemengineteam53.56502021-03-18 21:03:39
16jasonclay53.27502021-03-30 01:58:36
17aldentan46.66702021-03-30 05:12:03
18initial.bid46.01902021-03-22 20:45:00
19peak.proposals39.92602021-03-04 20:29:48
20dsongs37.14302021-03-02 17:12:39
21preferansist30.52402021-03-22 20:45:00
22kylealex25.84302021-03-27 16:29:18
23dapeng20.02802021-03-29 11:53:30
24silentobserver18.87702021-03-22 22:31:27
25innuendo18.47902021-03-20 09:42:12
26soulturtle16.93802021-03-14 16:48:24
27polonius7916.53102021-03-10 16:34:30
28promote.helper16.06002021-03-06 00:52:12
29askaran14.04202021-03-20 21:05:24
30applemint13.58902021-03-22 08:05:30
31coinlend12.90902021-03-30 08:32:03
32beanz12.37002021-03-18 12:02:09
33auctionator12.31102021-03-22 21:11:48
34blocktrades11.51102021-03-11 23:25:12
35anarchyhasnogods11.10802021-03-30 03:59:39
36ionomycold10.42602021-03-03 18:30:18
37fiftysats10.33702021-03-08 20:11:36
38handmade10.33402021-03-28 21:29:03
39moar0079.95002021-03-28 15:34:36
40ettydiallova9.80202021-03-30 11:47:27
41gooddream9.45302021-03-16 03:41:06
42mariostucablog8.66602021-03-12 00:41:12
43crypto-guru8.63302021-03-23 23:35:03
44shimul.khan8.60902021-03-31 15:50:27
45omrusman8.48802021-03-30 10:33:18
46epictoken8.20202021-03-31 07:04:42
47ecency7.56802021-03-16 09:29:51
48yellocat7.55102021-03-28 02:25:51
49steemitpresident7.32002021-03-09 12:34:21
50discernente7.20702021-03-05 11:25:00
51bemypet7.19802021-03-22 08:20:36
52karunya6.97602021-03-15 06:19:21
53yoonteacher6.85602021-03-07 09:10:18
54qustodian6.80902021-03-22 19:54:18
55steembasicincome6.66202021-03-28 16:26:45
56ahka6.29802021-03-20 09:39:42
57svuvya6.26402021-03-24 10:38:24
58internutter5.90402021-03-19 23:42:12
59pinheiroemmanuel5.79002021-03-10 16:48:15
60peterchung5.75502021-03-24 06:39:39
61beckymeep5.74602021-03-15 01:32:00
62markup5.59502021-03-29 06:51:33
63jose-poveda5.57802021-03-14 21:29:09
64orukpeyendis5.22402021-03-08 10:16:27
65dgiver5.22302021-03-02 16:25:51
66jarvie5.16902021-03-04 23:25:03
67dragonslayer1095.07302021-03-26 19:27:54
68jringo5.05302021-03-23 12:35:24
69tunjex125.05202021-03-20 12:48:06
70zvezda515.04202021-03-24 10:31:12
71triablot5.01602021-03-06 14:49:48
72fullalt.dhf4.92702021-03-02 10:29:48
73nathansifugaming4.85002021-03-04 03:18:39
74itsallasong4.77802021-03-18 21:32:00
75poetrybyjeremy4.75702021-03-13 20:58:18
76pakhar4.66802021-03-14 21:28:57
77michaelwrites4.56802021-03-23 21:55:00
78keychain4.55302021-03-25 08:29:51
79hadialhendi4.53502021-03-29 09:33:00
80upbot434.49602021-03-31 12:17:48
81tombstone4.46102021-03-20 22:26:30
82gopaxkr4.38302021-03-15 10:14:36
83steemh4.34402021-03-29 06:34:42
84bahtiarlangsa4.01702021-03-18 15:37:30
85andysupriady4.01002021-03-29 09:24:18
86yuemay3.98402021-03-22 08:06:27
87graphenelab3.90902021-03-18 14:05:06
88oflyhigh3.73902021-03-06 14:00:03
89zainenn3.68002021-03-07 20:58:48
90royalfinest3.64702021-03-30 22:18:21
91kingsiste3.63202021-03-24 20:01:27
92tonac3.54802021-03-03 22:38:00
93ppita3.50302021-03-29 19:54:18
94cee3.49802021-03-21 16:31:30
95swarddraws3.46702021-03-15 05:23:18
96rubelynmacion3.46202021-03-30 23:38:24
97app3.41302021-03-19 15:26:30
98coruscate3.30202021-03-05 02:03:54
99nightwolf3.28402021-03-31 22:28:45
100neoxian3.17302021-03-13 05:13:12

As I already mentioned about total of 6415 unique accounts received total of 10429.131 HBD as interest payout. Many of these unique accounts received under 1 HBD. So, if we exclude those accounts, we can see that 231 accounts received total of 100020.877 HBD

Similarly if we only count those who got 5 HBD and more then we will have 71 unique accounts receiving total of 9673.246 HBD.

If we only count those who got 10 HBD and more then we will have 38 accounts receiving total of 9449.514 HBD

In other words about 90% of total HBD interest payments are going to 38 accounts. But we also need to consider that this only the first month. In my understanding, the purpose of this action is to encourage more users to have HBD on their own accounts rather than in exchanges.

So if you look closely, you will see the top recipients of the HBD interest are the exchanges and the DHF. This raises another question. Do the users who deposited HBD in exchanges get any benefits of the interests paid out. Probably not. It would probably be not worth putting in the effort to distribute the interests to the users in the exchanges, since usually funds in the exchanges get traded and moved a lot. So far, I haven't seen any exchange announcements on this topic.

Moreover, those users who send HBD to exchanges probably wouldn't care much about 3% interests either. Those who care have an option to keep their HBD in their own accounts.

This brings up another interesting idea. The other day I saw @nathanmars and others discussing on Twitter how to get Hive/HBD listed on Coinbase. If HBD interest payouts continue, this maybe one of the advantages for any exchange to list Hive and HBD. They can earn HBD interest just for letting users to deposit and trade there. Look at Upbit. They have made more than 3348.254 HBD just in March. By the market prices it is about $7000 USD. I think hot.dunamu and user.dunamu are also Upbit accounts. This might be a good selling point for those who are making a pitch to Coinbase to get Hive listed. Just these interest payments will cover their expenses and bring in more revenue and increase their userbase.

Last thing to mention on this topic is that it seems to me interest payouts were not sent to those who have HBD in Savings. I manually checked a few accounts and didn't see any transaction related to this. There is only total of 51,185 HBD in Savings. While it may not be a big issue, I think HBD in Savings should be able to receive interest as well.

If you are curious who has how much HBD in liquid or savings balance, you can visit https://hivelibrarian.herokuapp.com and use the Rich List section. You can filter the results by HBD, HBD-Savings, or other assets.

If you know the answers to any of the questions expressed above please let me know. If you see that made some mistakes, feel free to correct me. Let me know your thoughts in the comments. Thanks.

Update: Make sure to read Smooth's comment below that adds more clarification.

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When there are two payments, I believe one is for savings balance and one for regular balance.

I manually checked a few accounts and didn't see any transaction related to this

The interest won't be paid unless there is a transaction. This applies to both regular and savings. This doesn't mean the interest isn't be earned, it is and continues to accrue. It just isn't actually paid out until there is activity. This does mean that any compounding (earning interest on the interest) won't happen.

That makes sense now. Thank you for explaining.

Do this pay out every month though?

I was sitting around wondering if it did?

I know it's 3% APR...But I think I read last month where it will be paid out every 30 days?

It does look like they are paid every month or every 30 days.
Smooth clarified that some accounts got two payments on March because one was for regular HBD balance and another for HBD in savings.

Posted Using LeoFinance Beta

What an interesting discussion!

You have a couple of the who's who in @smooth and @jongolson chiming in and then other big boys including @blocktrades taking actions on HBD inflation suppression. https://hive.blog/hive/@blocktrades/some-speculation-on-hbd-price-movements-and-how-it-impacts-proposals

Fascinating dynamic for a blockchain in its infancy and definitely worth watching for anyone vested in the future of #hive.

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When HBD is over $1 it really doesn't make much sense to hold it and instead selling it off for Hive makes more sense since there is a huge push right now to bring it stable to $1. I would suspect that being the reason so many didn't take part in it.

Also how does it even work? How long do I actually have to hold the HBD should it auto compound all the time like powered up hive does? Or do I need to sit on it all month before seeing it or if I hold it for a hour does it still earn?

Posted Using LeoFinance Beta

I still don't understand why they started issuing interest on HBD which in theory should encourage holding HBD, when their main goal is to bring down the price of HBD to the $1 peg. Now, it seems like it is more about making profits for the stakeholders/platform rather than a peg. I am not really sure.

Crypto is strange. As we speak HBD is still trading close to $2. I will still hold some, just to see what happens.

As far as how long you need to hold to get interest, I have no idea. HP curating rewards would return more than 3% anyway.

I'm right there with you. Either fix the damn HBD thing once and for all by doing what needs to be done on the development side or just leave it be and do something more productive.

I’d like to see some stable coin pairs for HBD the arb gains would be pretty sweet!

We can start on HE with USDT HBD and then roll it out on BSC and have HBD/BUSD

And on ETH we could add it on curve.finance and then traders can use either network to arb those Spikes or drops against a backed stable coin

Thats a great analysis of the situation. I'm still not sure how to tell if I received any interest or not. Does the transfere come with a memo stating that tue amount is interest for HBD?

In front end app wallets it would show up as "received interest".
There would be no memo.
I just checked. You received 0.535 HBD on March 24th 2021.

Sorry, I should have looked a little harder myself. I missed that on my first look but I see that now. Thanks for the help!
On a completely different topic.... actually, its somewhat related, I keep seeing all this talk around reward wallets where you can earn interest on your crypto. Blockfi, crypto.com and gemini to name a few. I'm so tempted to put some crypto into one of them to earn some passive growth but I'm too nervous about losing my principle investment. I mean, with crypto its very easy to deposit funds and earn money, everyone wants to take your money and give you back more, the challenge is the withdrawl process though hahaha. Anyway, you wrote a post about this topic a while back about why you weren't going to take the risk on those sorts of things. If you ever change your mind on a articular wallet or have anything more to say on the subject, I would be interested in reading about your thoughts and opinion on that sort of thing.
Anyway, have a good easter weekend, if you observe the holiday.

I have decided not to use those services, just not ready to take the risk. While some like Nexo have insurance, risk of losing it all remains. Even though it is the worst case scenario.
Thank you. You have a great easter weekend too.

I actually wanted to do this :) Glad you covered it .
I didn't actually know it is stored in VOInterests . Will check how much I have got ;p

Great work .

Posted Using LeoFinance Beta

This is an excellent measure that the witnesses have taken, I am able to encourage the use of the same platform and make it stronger. Besides, a 3% monthly interest rate is not bad at all, it is quite profitable for a large investor to have that profit just to keep his HBD safely stored there. And this without taking into account that the HBD is going up in price.

Posted Using LeoFinance Beta

3% is annual, not monthly.

It is an interesting experiment. We need to see data for several months to see if it changes how people make use of this benefit.

Okay, I understand. Well, we have to wait for the results of this experiment, my colleague.

Posted Using LeoFinance Beta

Very interesting topic. I had no idea you could earn interest either. The use of this to incentivize Coinbase seems like a great idea.

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