Another source of profit "to the blockchain" or Hive ecosystem (but not directly to DHF) is the 5% fees on conversions from HIVE to HBD. That's not necessarily attributable to the stabilizer even if the stabilizer is the one doing the conversions, because others might do them anyway, but it is a part of how fluctuations in the HBD peg pull value back to Hive over and above the utility of HBD to the platform.
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Do you think that 5% can help aid the 20% HBD Apr on savings? I feel like it is too much for the ecosystem to offer that lucrative returns, that's why it needs more funding.
The stabilizer, not even accounting for the 5% conversion fee, has generated a profit for Hive of almost $2 million while I doubt we have even paid $1 million in interest (would require 5 million HBD in savings for a year). So right now the 20% is perfectly sustainable for now even without considering its low overall inflationary impact. However I do not expect the 20% rate to last forever, at some point it will need to be cut. I've voted for a lower rate for a while but not strongly advocated for an immediate reduction because I think the "right" rate is unclear within a reasonable range including 20%, again, for now.
Agree that it will need to be cut. I do think the more committed you are to longer lock down savings gives you a higher APR instead.
Do you think that's reasonable?
That might be reasonable, but there is certainly a potential disadvantage to the blockchain here as well. If you have term deposits then the blockchain is stuck paying the higher rate for longer. That might be problematic, though it's probably workable if the amount locked is limited.
Locked staking has been a common feature among other savings/staking platform. This is why I think it has no issues on the user side. Regarding potential disadvantage, I can't see a deeper negative effect as what I foresee. But it gives Hive ecosystem a breather on the savings reward option. The more % we can save, the better for Hive because these returns are relative to the addition of Hive selling pressure in the market.
Since many have aired its concern on 20%, I believe it's best to address this issue asap or else we'll see its long-term effect. What do you think?
I wouldn't consider it a priority. We only have a few million in savings, despite the 20%.
Yes that to ... not sure would be able to calculate that one, that is like burning hive.
P.S. Do you have idea why Decmber was such a bad month?
It's certainly easy to calculate since numerically 5% of the HIVE converted is just destroyed with nothing in return. Interpreting what that burn means is less objective. I think a burn like that with nothing in return represents income to all HIVE/HP holders but others may disagree.
I don't know about December.
Your Baby is doing good work, congratz!