What is a Hive Backed Dollar? (HBD)
Definition
Hive Dollars or Hive Backed Dollars (HBD) are a decentralized stablecoin pegged to the United States Dollar (USD) and it is a native token of the Hive Blockchain. It is categorized as an algorithmic stablecoin) in that it is not backed 1:1 by a currency like the US Dollar and it does not keep a reserve like many other tokens in this category. Instead, it is backed by the Hive token, another native token of the Hive blockchain. So each HBD can be converted into $1 worth of Hive.
HBD is a Stable Coin
HBD can be converted to one dollar worth of Hive.
What are the important things to know about Hive Backed Dollars?
- Zero fees
- 3 seconds transfer time
- Stake for 20% APR
- Decentralized
- Your Keys, Your Crypto
- Community Collateral
- Time-lock security
- Native HIVE/HBD Exchange
- Supported by Decentralized Hive Fund (DHF)
Things to know, defined and/or explained.
Zero fees
- All transactions on the Hive Blockchain, are free, including Hive Dollar transfers, to Users who buy and stake five Hive (1 dollar thirty cents at the time of this writing.)
And many veteran members loan staked Hive to new members, often indefinitely, so it’s free for them to transact on the blockchain. Learn more later from a link below
3 seconds transfer time
- The Hive blockchain records groups of transactions called Blocks every three seconds. A good way to understand a block is to think of it as a page in a book which records all transactions.
- This means Hive Dollar transfers take 3 seconds to be confirmed on the Hive Blockchain.
Stake for 20% APR
- Hive Dollar can be staked or deposited in a portion of your Hive Wallet called a Savings Account to collect interest. Staking is instant, unstaking takes 3 days.
- The current interest rate is currently 20%.
- The interest rate is determined by vote consensus of the Hive Witnesses. Witnesses are selected by a vote by Hive Community Members who own and stake Hive.
Decentralized
- The software follows the rules created by humans. Computers all over the world keep copies of the software and the record book of transactions. This means no one person or group of people in one place run things. People all over the world run the autonomous software which maintains the record book of transactions on pages called blocks, which are chained together in what is called a blockchain. Humans make the rules and rely on computers to follow the rules. Hive Backed Dollars are a cryptocurrency token created and existing on the Hive blockchain, so it is called a Native token. Hive Backed Dollars are always worth one dollars worth of Hive. Hive is another cryptocurrency token created and existing on the Hive blockchain. Hive Backed Dollars are therefore backed by Hive collateral that can be redeemed using a native smart contract, available in many Hive wallets.
Your Keys, Your Crypto
- Your Hive Backed Dollars are in your Hive Wallet and transferred by you, using the private keys of your Hive account. You hold your crypto in your wallet, protected by your keys. So no individual or organization has access to or custody of your Hive Backed Dollars even after you stake them in your savings account, they remain completely under your control.
Hive Backed Dollars are backed by Hive, the reward token for the Hive Social Media Blogging and posting Community.
- Hive is the collateral for Hive Backed Dollars.
- Hive Backed Dollars are backed by a dollars worth of Hive, and can be converted into Hive at any time.
- The Hive Backed Dollars Convert smart contract is native to the Hive Blockchain. Collateral is held virtually by the entire community.
- Hive is a social network with over a million accounts and thousands of active users and stakeholders.
- Unlike other algorithmic stablecoins, the collateral of Hive serves as more than just a backing for Hive Backed Dollars. Hive has utility by itself, so it has a purpose far greater then a speculation instrument on Hive Backed Dollars.
- Ironically, Hive Backed Dollars are a small piece of the whole global Hive blockchain ecosystem.
Unstaking Hive Back Dollars takes 3 days, a form of Time-lock security
- Hive Backed Dollars can be staked as "savings" which also adds a layer of security. If a Hive account becomes stolen, there is a recovery process which can allow you to lock out the attacker. As Hive Backed Dollars savings take 3 days to unstake, a user has time to intervene, lock out the attacker and cancel their withdrawal, preventing loss of funds. Read more about Hive Account Recovery elsewhere using google.
Internal exchange on Hive Blockchain: HIVE/HBD Exchange
- Hive has a native Decentralized Exchange (DEX) with a HIVE/HBD trading pair. As with other transactions, exchanging Hive Backed Dollars for Hive has no fees on the native DEX.
The Hive Backed Dollar trading volume and dollar peg are Supported by the Decentralized Hive Fund, which is the Hive DAO treasury
- The Hive Backed Dollars Stabilizer is a trading bot funded by The Decentralized Hive Fund (DHF) Hive DAO treasury. The DHF is an autonomous organization, run by the Hive community, which has over $20 million dollars in capital at time of writing. The HBD Stabilizer trades HBD on the internal market to ensure the stability of the HBD price. See below for more information.
How much HBD is in circulation?
- According to source from @taskmaster4450 article: 33,788,504.918 is current HBD Supply Source HiveBlocks
- According to source from @dalz the Current Hive supply is 421,307,487 HIVE source
Last Words:
Thats Hive Backed Dollars in brief.
Sources:
PICTURE PICTURE CREDIT @DOZE THANKS @DOZE FOR MAKING THIS PICTURE FREE AND AVAILABLE TO ANYONE.
A lot of the information here is from this article from 2021, which I have updated to reflect 2024 updates to Hive Backed Dollar. Fortunately the author gives permission for reuse. I have changed some of the wording some, so I put my unique point of view on it. But other areas were explained very well, but I cut them down and added my summation.
Source #2 Leoglossary Article on HBD
Source#3 Coinbase Article
Source#4 CoinGecko
Source#5 Hive.io article on HBD
Source#7 @taskmaster4450 article
Source#8 @khaleelkazi article
Posted Using InLeo Alpha
Posted Using InLeo Alpha
HBD is currently a stable coin included in the decentralized platform and has many advantages that you mentioned thank you.
Yes I agree 100%
The decentralization of Hive and it's tokens Hive and HBD have many advantages.
Decentralization is advantageous.
Nice summary, nice list of references.
Thank you.
Thanks
List of references at the end was eight long.
Short summary of HIve Backed Dollar.
A nice followup article would be an explanation of the three Hive Tokens. Or maybe a rehash of the vlue of delegation.
Good idea.
Short Summary of 20% ROI in wallet investment.
Thanks
Thank you for this explanation.
But on the 20% APR on HBD, how does it pay out? is it monthly or annually? I don't know how to calculate it on my own.
It pays 20% annually, so on a thousand dollars worth of HBD it pays 200.
If you divide by 12 you get about 16.67 dollars. It pays you monthly.
I actually did a post on this here: https://hive.blog/hive-167922/@shortsegments/hive-hbd-savings-account-yield-proof-of-concept
According to TheBlock there are this many Hive Tokens:
Source: https://www.theblock.co/price/256959/hive-hive-usd
That is a wrong number that Coingecko is showing for ages now and I guess they have used it as a source... the curent supply is 421M
https://hub.peakd.com/stats?metric=total_hive_supply&timeframe=daily
Thank you.
Thank you for pointing that out, and thanks for the source link I have updated the post.
Actual number of Hive tokens in circulation per this source is 412 million plus: https://hub.peakd.com/stats?metric=total_hive_supply&timeframe=daily
Congratulations @shortsegments!
You raised your level and are now a Dolphin!