The APR On HBD Savings Should Not Be Lowered

in LeoFinance6 months ago

There is a discussion taking place, along with a push, to lower the APR on HBD that is put into savings.

In reading the reasoning in articles that were posted, I can only say this is wrong. It is a fool's errand based upon a simplification of a complex issue.

Like most things dealing with money, economics, and finance, it isn't as simple as people make it out. I guess we are in the social media, 24 hours news cycle. In the financial world, networks consistently espouse the single reason why markets go up or down on a particular day when, in reality, it is never that simple.

In this article we will sift through the different component that should be in this discussion.

For reference, I will be using this article by @deathwing and this one by @anomadsoul.

Yield Versus Speculation

From a finance perspective, we have to distinguish between HBD and $HIVE.

Here is a quote:

Why would anyone invest in Hive when you can simply get HBD, lock it up, and get an easy 20% every year? To increase the importance of HIVE, I would like to propose to our community that we reduce HBD APR to a maximum of 12% (as I am signalling right now). The reasoning behind 12% is that even if you actively participate in curating content on Layer 1 on top of receiving passive inflation, the approximate yearly APR you're receiving on your Hive Power is about 10 to 11%. I am hoping that these numbers reinforce the aforementioned notion.

What is the APR on Tesla? Amazon? Facebook? What do they pay out each year?

The answer is they do not. The APR comes from the movement in the stock price.

Here is the first major problem. Trying to promote $HIVE based upon APR is misunderstanding the coin from a financial perspective. While there are dividend investors, most of your top stocks are bought because of speculation. The dividend is a bonus unless, the stock goes down. In fact, it is foolish to buy a stock based solely on the dividend because the price can go down in excess of the dividend return.

Thus, the notion of looking at the APR on $HIVE doesn't make a lot of sense when it can go down by 25% (or more). It simply is not an asset that one seeks yield.

That is where HBD enters. This is catering to a different market. Not everyone wants to hold an asset that can decline 70% in a year. In fact, the bond market, which is make up of people seeking yield, is larger than the stock market.

Why would people buy $HIVE?

The answer lies in the fact it is an access token (more on that in a bit). But primarily, it is for the price to go up.

Bonds are commonly not compared to stocks because they are completely different markets and investors. We should not do that on Hive.

Medium Of Exchange

Another important factor is that HBD is a medium of exchange. This is its most vital characteristic.

Since it is pegged, it provides the stability to operate as a payment mechanism. Thus, if we are going to develop a Hive economy, this is crucial.

Of course, for economic activity to occur, money is needed. The problem with HBD is there is not enough of it. Right now that is not a major issue since the utility is rather limited.

The idea of setting the APR on HBD based upon those put forth by other stablecoins makes little sense. HDB has to be the foundation of the economy we are building. Most of the others are built on second layers by centralized entities.

One of the things we need to develop is wealth on Hive. This is not done by messing with tokenomics or monetization factors. These has a part obviously but there is something more concrete than that.

We need commerce and financial applications. What would HBD look like if there was $10 million a day in transactions taking place? $25M? $100?

What would that does for the ecosystem? More importantly, what would that do for the value capture token, i.e. $HIVE?

Hive Marketing

This might seem like an odd component to put in a discussion about tokenomics but hear me out.

Look at this list:

  • Verizon
  • Saleforce
  • Netflix
  • Yahoo
  • AirBNB
  • Kellogg's

Do you think any single person or company ever decided to use one of those companies products because they were housing data on AWS servers?

Will anyone leave any of those companies if they switched to Microsoft?

The answer is obvious.

It also points out a problem within Hive. While we want to talk about this like it is something special, it is nothing more than a decentralized server system that allows for the storage of data.

Anyone who reads my articles know I believe Hive is a technology that is superior to most out there. This is what sets us apart.

However, from a user standpoint, they do not care. Netflix subscribers could give a crap where their videos are streamed from. Their only concern is whether it comes through or not when they want them.

This is why the idea of Hive marketing is fruitless to end users. Nobody is going to care no matter how many races have Hive plastered on it or how many movies you make. Did anyone sign up for Facebook after seeing The Social Network.

Hive's success to users is going to come from the applications. Of course, we already say this with Splinterlands. That game had a stretch with a lot of sign ups. The reality is few cared about Hive. These were there for a game and as long as it met the players needs, they returned.

Where the data was written became of no use.

Therefore, the best way to increase the value of $HIVE is to support those applications and games looking to grow the users. That is where targeted marketing can occur.

We do have one exception which has never been, to my knowledge, ever discussed.

Who would be interested in the back end capabilities of Hive and the underlying technical components? Developers.

Have we ever had a marketing proposal designed to target them? The answer is no. Perhaps the timing is not right for that due to the ongoing development of HAF and certain levels are required for it to be fully promoted.

Tokenomics

Cryptocurrency seems to have a cancer that is the idea that messing with the tokenomics leads to success. We have seen it repeatedly over the years.

Here is it bluntly: Few cared about $HIVE (or HP) before HBD was at 20% and it will be the same if it is changed.

We have to stop believing that simply changing the tokenomics is going to make something valuable. It doesn't.

What is required is building. For this to take place, people with a mindset need to approach Hive with the idea of creating a business utilizing the base layer features offered. This includes account management, wallet system, HBD for payments, and resource credits for access.

Most of cryptocurrency is focused upon adjusting the tokenomics instead of actually building applications and games that people want to use. There were a few hits here and there but, overall, not much.

But then again, how often have you heard about people talking about growth rates, full blown marketing strategies with tactics, market share and unique service propositions?

These is commonly discussed in the business world yet we see little of it within cryptocurrency. Instead, like we are doing here, the focus is tokenomics.

That is the problem.

Access Token

Here is the biggest issue with this entire proposition.

$HIVE brings a lot to the table. When staked, it provides influence in both governance and the reward pool. We do see how this can potentially translate into a return.

However, the main use case of Hive Power (HP) is access. It allows people to interact with the chain. If we want to get simplistic, here it is.

Once again, we are back to users.

This is another quote:

This 20% APR is a huge tool that we could leverage to onboard investors into the Hive ecosystem, and yet we are currently not doing anything about this.

This is true although perhaps not the greatest area of promotion. Nevertheless, it does emphasize a point that I brought up earlier.

If there is $25 million a day in the Hive economy that takes place in HBD, how much HP is going to be required? This cannot be answered because 1 transaction is much different than 1 million. However, the point is that the more success HBD has, the better it is for the other coin.

For some reason, it seems there is the mindset of these two coins being in competition with each other.

Also remember, HBD is backed by Hive - not the other way around.

That is true. But also remember, for every HBD transaction, HP is required somewhere.

Not Enough HBD

To be a legitimate player in the stablecoin market, a lot more HBD is required. The APR is one of the ways HBD expands.

People question the sustainability of HBD. There is a correlation to $HIVE since the market caps are essentially interwoven. However, it is a mistake to overlook the way successful HBD can impact the value of Hive.

The blockchain needs transactions. This is the simple premise. Hive's success comes from blocks being filled with data. If this occurs at a greater rate, then we are going to see a much more valuable coin.

Consider if Hive was doing 250 million transactions per day. It matters little what they are for the sake of this discussion although we do know there is a difference in pricing of resource credits.

What do you think the value of $HIVE would be at that rate? I can guarantee a lot higher than it is now.

In Conclusion

It is beneficial to have these discussions. We should look at tokenomics periodically. However, it seems this is the focus instead of really concentrating on growth.

My view is what is proposed is going to fail. It will not alter the price of $HIVE one bit. There might be a move higher based upon the market but that is it.

When the premise is to put an APR on a speculative asset, it is bound to fail. As stated, you can bump the APR on HP to 15%, if the price goes from 30 cents to 15, how are people going to feel?

Also, if that price is hit, do you think people are going to buy $HIVE because it pays 15% or because they have a chance to double or triple their money.

Hopefully this article shows the situation is move convoluted that presented. It is not as simple as people like to make it out.

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Why do people have a desire to poke a stick into a working mechanism in order to see what happens? HBD holders are passive investors and lowering the interest rate will cause them to leave the platform. If someone thinks that they will run to buy Hive, then this is a mistake.

palka.jpg

Personally, I'm going to generate yield/interest in whichever project offers a combination of the best returns, safety and ethics - which at the moment is HBD for me (out of the options I know about). So yes, if the interest rate drops significantly I will sell my HBD quickly and move on - as there are other options that are more attractive and HP is too volatile for me to rely on long term.

It's expected that the APR can change, but I agree that this is not the right time or amount to do it.

From what I understand, the huge stablecoins such as Tether survive by charging fees, issuing loans and making investments. They leverage their presence on exchanges, do marketing and had epic growth in the last couple of years (don't believe the CMC graph, 2022 was a real year. lol).

image.png

HBD doesn't have the positioning of Tether and can't compete with it due to that and it's relatively low size (and less stable peg). The main use for HBD at present is for Hive related features/services and it having a very attractive APR is actually an interesting onboarding tool if used correctly. However, key sales points are only as useful as the marketing done to promote them. You can have the best thing in the world and no-one will buy it if they don't know about it or don't understand it well enough.

I am consistently saddened by the lack of understanding of marketing among many of the decisions makers on Hive - I get the impression that they haven't studied the basics. As @edicted pointed out in his post on this topic, the top 20 witnesses ideally need to be at least knowledgeable in many fields and this includes marketing. If they aren't, then for that reason alone the community needs to have regular meetings to maximise knowledge transfer and to optimise decision making. This should be common sense. Pretty much all successful organisations have something like this.

Offering a great APR should not be seen as something to stop because 'people don't believe it'.. lol. It's a major selling point and tackles people's most basic survival pain points in life. If people just assume it's a scam then that is evidence of a dire need for better educational and promotional strategy/materials and not evidence of a need to destroy the selling point.

It's the same for the stupid HBD stabiliser. Can you imagine a new investor hearing that there are a community of crypto owners who are actively trying to drive DOWN their own crypto? 🤦🏿‍♂️

Cg

The problem is that this is all going down regardless of what the average user thinks. It's fully up to the 21 Witnesses who make the final decisions. They aren't asking for our opinions, they are telling us what THEY want to do. This system is not decentralized and cannot be decentralized with a coded in bottleneck such as this.

When we are seeing decisions being made through guessing rather than economics, then we know we have the wrong leaders in place. I for one don't want to be told what's going to happen on a decentralized platform. I want to be asked my opinion and see long term of Town Hall discussions taking place.

This is how we tap into the wisdom of the crowd to get all of the info and find those knowledgeable within the area under discussion. I hope the key players step back and slow down, because they are being hasty and not allowing those with the necessary experience to weigh in.

With LeoFinance getting ready for a huge marketing push, this is the wrong time to make this change. They'd essentially be eliminating a great asset for onboarding when we need it the most. Too bad they didn't market this when it was first put into place, which shows that the wrong people are making these decisions.

Most people don't vote or change their witness votes. Vote for people signalling 20% APR if you are against this change.

If enough people do this, it can change up the top 20.

At least it will make people start to question their witness votes.

What you bring up is valid. People, no matter what their stake, have to take responsibility for their votes.

You just hit me upside the head with that one. I have had a proxy since I started here and now will revoke that and vote on my own!

Exactly! Buy Hive, power it up, and vote for people who want to keep 20%... Easy peasy... 🙂

Why buy Hive, when you can circle jerk and get them for free :)

Agreed, but to actually be decentralized we need more options to get involved. For now though, yes reviewing your witness votes is all we can do.

@3speak lost my vote signaling 12%.. plus not responding when questioned. @themarkymark was on it answers including links.

3speak was signaling a lower rate months ago.

maybe. . But no one pointed it out. I'm really more aggravated they just ignored me when I asked a question. Obviously my vote doesn't count or isn't needed.

Nobody pointed it out to me either, but I still knew. It shows up on the witness list if you use PeakD. I give that page a glance over at least once per day while I'm online and not lost in the forest without a phone.

Shortly before summer (I think) some kind of big name influencer (I think) on twitter (I think, but I could be wrong) called this entire HBD thing a scam. Later that influencer (I never even heard of the guy so I have no clue what he actually does) had a debate with @theycallmedan, and Dan mentioned his 3speak witness, talking about how they're signaling a lower rate and why, explaining how the system works, how it's not a scam, how it's decentralized, yadda yadda yadda. The recording is somewhere on Hive. I stumbled into it. It seemed like a big deal around here for awhile.

Don't take it personally if someone doesn't answer their phone right away, dude. Maybe they'll write a post and offer their reasoning like some other witnesses have, rather than communicating with everyone individually. I dunno.

Shit happens.

I use PeakD too.. but I'm horrible about reviewing witnesses and what they're up to.. don't get me wrong I love 3speak.. we'll see if a explanation is coming

We run an open podcast on CTT every week on Saturdays. We discussed the decision to lower it to 12% months ago on CTT. We also run an open dev meeting once a week on Thursdays.

We will literally let you on the show to ask your questions and discuss with us. Ur invited on the podcast if you want. Or you can come get involved in the dev meeting on Thursdays

I’m not sure when you asked any questions to us. I don’t have any DMs from you either.

Maybe try DMing me and we will do our best to answer your

I certainly appreciate your response.. I've actually never been involved in a podcast.. as far as a dev meeting... no need to prove my lack of knowledge.. I'm gonna pass on that one. Do you have a link explaining why you believe the APR should be lowered., because right now I don't think it should.

How do we find out which witnesses are signalling 20% APR?

!CTP

https://peakd.com/me/witnesses

There is an APR column, that is what they are signaling for HBD APR.

Thank you for clarifying that @mrtats
!CTP
!ALIVE

@mrtats! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @ hirohurl. (1/10)

The tip has been paid for by the We Are Alive Tribe through the earnings on @alive.chat, feel free to swing by our daily chat any time you want, plus you can win Hive Power (2x 50 HP) and Alive Power (2x 500 AP) delegations (4 weeks), and Ecency Points (4x 50 EP), in our chat every day.

This is very helpful. I'm changing my witness votes right now. I don't like those that want to lower APR.

I think the witness votes need to work differently. Either 1 account =1 vote or some equivalent 2 votes at 50%.. 4 at 25%.. etc

I agree, staked weighted just creates Oligarchies and cannot be decentralized.

All that you wrote here is true. I will be writing an article tomorrow that addresses much of what you brought up.

Finally people are catching up to what I've been saying for five years.

Cg

I've been saying this for years

Here is it bluntly: Few cared about $HIVE (or HP) before HBD was at 20% and it will be the same if it is changed.

Are you trying to tell me people care more about hive now with the high 20% APR?

User retention is down, active users are down, hive price is down and HBD never holds peg and overall market cap has fallen. What brought hive prices up was an single application called Splinterlands. Want price increase give people a reason to want hive and to use it. Not this constant hyper inflation.

At least that's my simple version of what I've been saying for a long time now.

why do you guys just keep ACTING AS IF YOU KNEW ?

show me the evidence that everything was because solely thanks to splinterlands alone

I never even fucking touched that pokemon clone
BECAUSE I AM INTERESTED IN OTHER STUFF
especially the most basics of stuff (also related to my situation, I have pain, no home, am being criminalized - but people are happy as long as they got bread and games)

but you guys seem so lost with your happy normal lifes

User retention is actually higher than ever, but still not very good. Our current problem is a chronic lack of new joiners.

But I agree with your point, Splinterlands has been the strongest identifiable driver of Hive price, the impact of high HBD APR is totally unclear.

There's been a lot of new sign ups but I feel it's mainly other applications like Splinterlands so they don't care all to much about hive itself. I could be wrong though we for sure lack some data.

Unfortunately we are at a low ebb in terms of accounts overall, including non-social media users. That said there has been an uptick since it hit a low in July.

image.png

It's even worse if you just count users who create a transaction (of any type).

Are you trying to tell me people care more about hive now with the high 20% APR?

Not people are trying to claim that lowering the APR is going to drive value to Hive.

HBD always holds its peg. It is redeemable for $1 worth of Hive. When has that not been the case in the last 18 months?

You really don't know what hyperinflation is 😅

That's what the post says. It's the dapps that will bring people to Hive. How will lowering the APR of HBD bring dapps like Splinterlands?

It is sad when people talk about stuff and have no clue what they are talking about.

So putting one's money in saving is something that one should not do?

it is sad that people always try to tell one what do to

probably time to leave the sinking ship HIVE with its banker server admins wanting to change interest rates

(while I have no problems lowering the HBD APR - but big problems with people AGAIN WANTING TO LOWER POSTING REWARDS - you all have amnesia and already forgot the 50/50 curation split ?! that also was supposed to increase attractiveness of Hive(power) - but people do not REALLY CARE they just want to DO AS IF they KNEW
and AS IF they CARED and then JUST CHANGE SOMETHING, better than doing nothing)

INTERVENTIONISM

HBD and its 20% APR was very special in countering the inflation
and being one of the few possibilities TO EVEN MAKE SAVING WORKING AN PROFITABLE AGAIN (AFTER BITCOIN OFC)

but people life their normal normie land lifes
everything is good
bread and games

and do not even get the need for some GOOD BASIS LIKE SOMETHING THAT ALLOWS TO SAVE
some people like me fighting for survival everyday have..

I just don't think that's true at all. I have $2,000 in savings, but the majority is in HP and a good chunk off platform for trading. I'm hedging my bets with different benefits to each.

HP can potentially double in value over time, HBD cannot. I get a trickle of return on my HP being active, HBD does not. Liquid Hive can double in a 3-hour pump & dump. HBD cannot.

People who put 100% into HBD will regret it, and people who go 100% into HP will regret it, both for different reasons. So there's value in both regardless

This seems like it's on the money.

The "Bond" market (HBD) and the "Stock" market (Hive) are two vastly different creatures, drawing vastly different people.

But investors and users are also two vastly different sets of people. The challenge we seem to often face around here is that everything gets muddled together like every potential new Hive user is ALL of the above. I suppose they could be, but most aren't.

Does the 20% rate "work?" For personal perspective, I know I have started to save a little of my liquid HBD rewards, rather than cashing it all out to buy groceries and electricity. Even though I can ill afford to not grab every penny. If the rate on HBD were, say 5%, would I save any? Would I power up, instead? Nope; I'd be using it to pay a little extra on credit cards.

Hive (as a "concept") does need to start DOING things. Fiddling with tokenomics isn't "doing" things. We need more things like Splinterlands; we need use cases like actual ecommerce, conducted in the native currency. Overall, we need more emphasis on what you can DO on/with Hive, aside from just "Hive." The crypto industry is growing out of its infancy to where simply saying "decentralized blockchain with a token" isn't a selling point, in and of itself.

Don't fix what isn't broken.

You aren't going to change the trade price of Hive in the current market by messing with HBD APR.

If I ran a business where I am paid from an asset from Hive, I would accept HBD. And I would also want the APR to stay at 20%.
Cheers

I think the pros currently outweigh the cons, we should definitely keep this experiment running for a bit longer before making changes again

Much like the 12% we had for awhile, the 20% is also subject to change. If that comes as a surprise to some people, it's because they didn't do their research.

We all might not agree on what percentage is best, but everyone must accept the fact the percentage is subject to change.

Why do you think many or most don't know that?

Because "many or most" didn't take the time to learn, if that's the case.

That's another assumption without answering the question.

What the fuck are you talking about?

It was a simple question

Yeah. So answer it. What the fuck are you talking about?

Nah, i wouldnt support the decrease of HBD APR, the difference between Hive and HBD is volatility, each has their advantage and disadvantages, choose your risks. HBD and Hive has survived these past few months independently of their APR.

They are completely different markets for investors.

That is where I think the main problem stems from.

Lowering the APR now would be a huge mistake. The system is far from breaking (Dalz has a good site showing the health of the system) and if it gets lowered it is going to scare off everyone who bought into HBD or who has watched from afar as a potential investor in the hive ecosystem

If this gets changed with very little discussion, debate and community voting it could be very negative for Hive as an ecosystem IMO. Changing it on a whim because a few witnesses want to is not the way.

As someone else said in a comment - if you disagree with the change, look for other witnesses who signal 20% and consider changing your votes. That’s the way the community can get involved in governance. I would love to see more Hivers involved in governance

I've been involved in governance damn near the entire time I've been here.

I will not be adjusting my witness votes. Some are signaling 20%, some are not. They have the freedom to decide and always did. From day one, that percentage was subject to change. It's far too soon to start acting like alarmists and panic voting.

I just blogged that I'm removing votes from people signaling under 20% but it's certainly not a panic vote - it's very amicable and simply because I have very little else to go on when it comes to deciding my votes. Most the top witnesses haven't made a post of any kind in at least a year. I don't know who they are. Superficially I know projects they do, but...that's not enough.

So, my very mild disagreement is enough to go on for now, and I think we should all do that until there's enough voting activity that votes makes an actual difference

I've been snooping around a lot. There are also some individuals going the other way, encouraging people to vote for those signaling below 20.

I'm not participating. HBD has no business in governance and does not have a say as far as I'm concerned. I don't really want to see the security of the chain compromised for profit. Don't want to see witnesses signaling 20 in order to get votes, due to the integrity issues. That's bordering on vote buying is a worst case scenario. I don't really want to see a rift either. Us vs Them or whatever. Not interested. And I want to keep a cool head.

I'm not shocked to see the rate lowered. I was expecting to see that happen. It was my understanding 20% was a promotional offer. I want to say it was a flop when compared to its potential. I'm fine with a lower rate and I'm also well aware of the fact it can go up again in the future. The rate isn't set it stone, by design. Supposed to be decentralized, and that means those witnesses are free to decide as individuals. I think it's unreasonable for them to feel cornered or pressured. Suddenly losing support for decisions they made months ago. A bit of kneejerk reaction. No actual changes have even occurred. A flexible rate is something I can handle and I've prepared for any possible changes. None of this really fazes me.

I also won't tell you what to do or hold your decisions against you. Everyone can take care of their own business. Hopefully it remains peaceful. There's never been a time when they all signaled 20.

Don't want to see witnesses signaling 20 in order to get votes, due to the integrity issues.

That's a fair point, but voting doesn't necessarily have to be about destabilizing and dethroning. I would never remove my vote I were a whale. I want them there, my action is purely to make a soft statement, which I feel like everyone is meant to be doing here, no?

What's even the point in voting when we know the top 20 will pretty much consistently always do their job? Why not just have two big buttons that says 'satisfied/unsatisfied' applying to all witnesses combined?

The fact is, I know nothing about any of the witnesses really, and that's a pretty bad look. For all I know, half of them are waiting for Hive to hit $1 and then they're pulling out and running with the profits. I got nothing to go on. How can I trust any of them?

The APR discussion is therefore the only recent factor I have, really, to go with that gives some inkling about their individual goals for the future of Hive - unless I want to delve deep into programming language I can't understand.

20% was a promotional offer.

I keep hearing this but I've not once seen a promotion of any kind. Not in the sense that any other enterprise would do. Has anyone actually put out a facebook ad, even? I'd rather there be an actual effort to promote the 20% first, so we can at least collectively say at least we tried.

But yeah just to reiterate, this is not something I'm upset about - ultimately, anything over UK inflation rate is fine by me.

Just looking at the list. Out of all the witnesses there, I've spoken to most of them, on chain here. Very few snub me. Some used to hate me but now we get along fine. I watch closely. I just see them as people, nothing special, no different than you and I. Nothing about them makes me feel paranoid. I don't think about trust until I'm given a reason to not trust someone. And we don't have to agree on every last frickin detail. I could look at what they're up to and think, "Well, that's kind of stupid." But of course I do stupid things too, so we're even. Don't need to be perfect to get my vote.

The 20% is the promotion. Apparently just seeing that was supposed to make people drool or something. Get people in the door enjoying that HBD, word spreads. Get the ball rolling then bring the rate back down to earth. Makes sense to me but I don't think it performed as well as it could have. And yeah there was metric shit-ton of hype coming out some members and their posts here on chain, but that stuff rarely reaches the outside.

There were a couple occasions in the past I had to remind people the rate can drop and it's not permanent. If anyone was out promoting it but leaving that part out, they were doing this place a disservice.

I'm happy all this happened now, sooner rather than later. The rate has changed 5 times I think, always going up. It's also designed to go down and the people here need to experience that as well. Certainly not the end of the world. Some are acting as if a number like 12% is the new zero. "All is lost!" And that's not the case.

There was an uproar when it jumped to 20. Not everyone agreed with that but it still happened. At some point I realized I didn't need to agree or disagree with anything. I simply accept the fact the rate can change. My mind is at peace. Whatever happens, happens.

Thanks for reaching out, Mobbs. Good to see you.

I guess we disagree a bit on the governance aspect, largely because you know them well, while I don't know them at all, and I think I represent whatever everyday users are left on here - we know nothing about them.

Like I said in my own post I wouldn't normally change votes based on a single issue, but until I actually know something about anyone, I can either make choices from the one aspect of APR, or do nothing at all. Most people are opting to do nothing at all, which is the death of democracy.

Maybe I just need to give up a bit on that being a focal point of the project and just accept the top 20 no matter what... It's not like it isn't running well or turning totalitarian lol.

As for the 20% being the promotion... I think somebody somewhere needs to start looking for an actual economist and professional marketer XD

Thanks for reaching out, Mobbs. Good to see you.

I appreciate the discussions - I come and go but always around!

What do you think of the idea of including HBD marketing in the Leofinance proposal?

Leo can promote whatever they want and place the messages they want if they are funded.

good point on choosing witnesses based on the APR they support. When I went about looking over the witness list, I did note that a lot of them support 20% APR, but not all of them. I also put a preference in voting for witnesses that are related to projects I want to support. (So far a total of 8 witnesses I have voted for...need to add a few more sometime.) Like LeoFinance, and a few other Dev types who contribute to the community.

https://leofinance.io/threads/steemflow/re-leothreads-2raugzmyk
The rewards earned on this comment will go directly to the people ( steemflow ) sharing the post on LeoThreads,LikeTu,dBuzz.

I knew you'd weigh in eventually. Yours is probably one of the most respected opinions on the blockchain.. curious how come you're not running a witness node? I'd vote for you.

Rumor has it, he fully suppoprt @clicktrackprofit witness LOL

Y'all already got my vote..

I can barely run a laptop.

And running a node requires technical expertise. After all, the primary role of a witness is to keep the chain running.

the primary role of a witness is to keep the chain running.

You're a Good damn genius Gump

I would also do it

If it drops below 20% I am taking my money out of HBD and moving it elsewhere.

It seems absurd to me since they tell me that in order to improve the attractiveness of A they are going to reduce the benefits of B; Practically they say

To make soccer more attractive and attractive for everyone, let's make it so that if a team is losing, the rival loses a player, until people start betting on the team that was losing...

That happened in Venezuela with a similar formula, they increased the prices of products in Cash and Transfers, lowered the interest rates, to encourage people to buy and use the PETRO... A Crypto invented by the Venezuelan State, the result? failed.

I do not understand who comes up with these ideas, to which schools of economics do they go, or if they think that everyone is managed like a Silicon Valley company; I am concerned that those who have the ability to make these decisions, openly demonstrate that they do not know their users and I understand that it is difficult perhaps to make studies, but to make decisions standardizing all users, is to ignore that here there are DEVs, users who only come to consume content, users who want to create content, users who are simply part of a community, investors, crypto enthusiasts, people profiting from the platform and there are multiple styles of users, each with their own economy and reality.

We have to stop believing that simply changing the tokenomics is going to make something valuable. It doesn't.

Changing tokenomics for HBD savings made it "more valuable" didn't it? Almost nobody was doing it, and when it changed to 20%, people "changed their minds" about HBD savings...

So, changing tokenomics in that case worked!

HBD isn't Hive and Hive already has plenty of utility in place to encourage buying and powering it up. It also has the ability to moon without added incentives to buy it. Adding more incentives won't bring in new users, but having incentives to invest in HBD can.

Why hasn't this happened? No marketing, duh!It's been a huge wasted opportunity, but now we have a 2nd layer about to do a huge marketing push and they want to do away with a huge incentive to help out? Talk about backwards thinking.

Well, marketing is a double cutting sword. Because whenever I talked about 20% apr on a stable coin, the first reaction was -> that must be a scam. Nobody trusts things that are too good to be true :-)

Yeah and I bet you marketed to tons of potentials, lol.

Why would people play a game where 20 accounts dominate 50% of the rewards intended to draw in newbs, not further enrich those that already have too much?
It's like hive failing is the goal.
It is working.

Who buys into a game that requires 1.9m usd invested to get to be a peer?
Assuming that that level of buying wouldn't push the price.

I've long advocated a 1000mv(36 accounts) voluntary cap on voting from the pool.
This would only require a 190k usd investment to be a peer in the pool.
Why would anybody invest 190k usd only to be diluted by folks with 10x(5 accounts) that amount?
This is not winning game economics, imo.

As long as the top 5 curators continue to vote rewards to those that dump, we can expect rewards to continue to be dumped.
As long as the top 5 curators continue to take 10x what anybody else gets, we can expect newbs to drop out because they get next to nothing.

Who plays a game that will never offer a level playing field in this lifetime?
Who buys into a game where some people take out 1000x the rewards everybody else gets for playing the same no talent, no luck game?
Let alone 10000x.

This is our reputation in the broader cryptosphere because it is true.
Everybody wants change, nobody wants to change.

I convinced a few of my friends to join hive for 20% APR from HBD. They are not active here and are passive investors. Reducing the APR would let them leave and I'm sure that would be the case with other passive investors too.

Indians get 14% returns from this investment after our 30% tax. If the APR is reduced to 12%, the return is something that is already available in some safe investment schemes in the real world. So people might prefer that and take their HBD out.

12% yield on the dollar is an amazing return. My witness node is set to 16% but even if we go for 10%, which other witnesses are going for, it is still an amazing return.

India and Brazil seem to be similar in many aspects, Brazil has a 13% return, you said India has 14%, all my friends and I would rather take 10% on our US Dollar investment over 13% on our Brazilian Real investment just because historically the USD has outperform the BRL. I assume the 14% is on the Indian Rupee, right? I am not from India, but to me 12%, or even 10% on the USD sounds more attractive than 14% after tax on the INR.

Point is, even lowered HBD savings is among the best in the world and in the DeFi space. Your friends are allowed to leave, but in my opinion they will be missing out on great savings. Are you sure they would really honestly leave the double digit interest in USD? I wouldn't, my friends neither.

Spot on. In order to increase the user base of Hive, you have to show that there are good apps worth using. You mentioned Splinterlands as one example. Games are a good way to do that. Another game that is doing well is Rising Star. Gaming is only one avenue to attract new users to Hive, and new developers willing to invest their time, money, and talent to build applications.

But games are not, nor should be, the only types of applications to interest people. Actifit is another app that could be a good way to attract more people to engage in the Hive ecosystem.

Then there is the blogging space on Hive, with lots of communities, many of which have a good user base, and there again, there is opportunity to leverage the blogging community to attract more users to the Hive ecosystem, and in this case, Hive Community. LeoFinance is one example, along with CineTV, various games on Hive are building communities. And there are communities for artists, photographers, poets, and so on as well, some have their own token on the Hive.

Developers will come to Hive (or other crypto blockchains) if they think the application they build will attract enough users to justify the expense in building, supporting and improving the app. Some games may be free to play, but at the end of the day, developers want to be able to have a roof over their head and food on the table (and maybe a couple of beers).

My two cents, for what their worth.

Until there is enough HBD in circulation that people start using it religiously to conduct business transactions between each as currency for goods and services, there is not enough built up. HBD is the economic purchase value. Hive is just the utility used to provide a common ground between tokens for exchange purposes. I could never see it used for purchases as it's value cannot be trusted to maintain any consistency and business requires a trusted medium of value exchange.

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Here is a quote:
Why would anyone invest in Hive when you can simply get HBD, lock it up, and get an easy 20% every year? To increase the importance of HIVE, I would like to propose to our community that we reduce HBD APR to a maximum of 12% (as I am signalling right now). The reasoning behind 12% is that even if you actively participate in curating content on Layer 1 on top of receiving passive inflation, the approximate yearly APR you're receiving on your Hive Power is about 10 to 11%. I am hoping that these numbers reinforce the aforementioned notion.

That's the worst justification ever 🤣 HBD is nothing without hive and it does nothing but add to the value of hive and the longer and better it holds the peg the more value it bring to hive, an argument about inflation would be better but if we can sustain 20% especially as it scales it's going to become a very attractive savings account for many more people inside and outside the crypto space.

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Here is it bluntly: Few cared about $HIVE (or HP) before HBD was at 20% and it will be the same if it is changed.

What would incentivize more people to be interested in Hive? What would happen, if the curation rewards and/or the APR of Hive Power would be increased? Nowadays the APR on Hive Power is around only 3%. What would happen, if this value would be higher? For example 5% or 10%. And with the added curation rewards, the 20% (the same as with the HBD passively) would be achievable. Would any of these scenarios be technically/economically sustainable in long term? Would that increase people's interest in Hive Power? What do you think?

If you increase HP APR the only benefits will see by the whales, giving them more power to vote witnesses and proposals, AKA more centralization.

You are right. If we think about this, then this is obvious.

What good is APR if the value of the coin drops 50%. Hive is a volatile asset.

If seeking yield as the primary investment motive, then you want something stable like HBD. Even though it moves on the market, it can be converted for $1 worth of HIVE.

everyone and their mother has an opinion on how this chain should be ran. Glory to hive, may the consensus win.

I am against lowering the APR and I really think about revoking my witness votes to ones that push for power APR.

Fully agree on this!

Having this current rate on HBD does not seem to have helped $HIVE much, so will a reduction make much difference? I guess people had to buy $HIVE to convert. The witnesses can decide how it goes.

On Hive? I would say it isnt going to make any difference.

Fully agree! Thanks for putting this together!

I feel like reducing the APR on HBD wouldn't change a thing to drive mass adoption. Where we should be focused on, and where I've perceived we can grow as a project is through applications. I don't know much about the tokenomics and all, but I believe the move isn't going to amount to much.

I dont believe it is going to help. People arent going to buy HIVE for the APR, at least that isnt the primary benefit.

An asset like HIVE is bought, from the outside, by those who want a 3x or 5x. That is what they are looking at. For that risk, they are willing to potentially suffer some downside.

Fixed income instruments have different appeal.

First legitimate post to confront such changes in the ecosystem. I have seen so many ripples since morning (ist) that made me to assume that it has already been implemented. I belive hardly anyone support the lowering the apr...except few.

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@torran(1/10) tipped @taskmaster4450

We have 20% APR and we are not marketing it, What is the point of this experiment? I know so many people out there are still afraid because of what happened to Luna but we need to get our marketing right

Thus, the notion of looking at the APR on $HIVE doesn't make a lot of sense when it can go down by 25% (or more). It simply is not an asset that one seeks yield.

People are seeking yield with Hive, I know I am- by growing my Hive Power I can get increased curation rewards and therefore earning power. As with many assets though, the Total Yield with Hive is not just through curation, we expect to see the increased value of Hive reflected in its price over time similar with a growth stock.

Agree 💯.
Amazing Post to me! It enlightened me, still does, in many ways.
I've just discovered LeoGlossary because of your generous links.
My news glossary. Better than Wiki 😁👌🏽

“...growth rates, full blown marketing strategies with tactics, market share and unique service propositions...„

For the win ☝🏽🤓

Thanks a lot, @taskmaster4450, for that post, a learner

What about set a 20% HBD Savings for amounts lowers than 10k (HBD) or increase the HP APR for accounts with less than 10k HP. More stack lower APR.

That way you make sure small users are the beneficiaries equilibrating the map of power and getting there chances to grow and bet for the network.

There are no short cuts here and why Hive should be seen as valuable. Hive is hard to earn and takes effort and it has to stay that way or it will cheapen what we are building.

Hive is easy to earn, you only need invest enough money to do it, as all in economy. Some whales get high upvotes not for the content they create, they get it because they are whales and later "recompensate" with upvotes to her followers. 🤗

You don't need to invest and just spend the time growing. It takes time and many of us have been growing from 0. Hive is not easy to earn and why many of us appreciate what we have built from scratch,

That what you say now is correct, you don't need invest. But that about is hard grow in Hive is not true, with money is to easy.

If you have money yes but you can become a whale from 0 over time.

People will use multiple accounts and just spread it around.

I think if the APR of high amount is 12% people will don't take the job of create 30 accounts to stake 300k.

I think there is a difference in the fact that we could keep a 20% APR, not that we should.

20% may be scary for outsiders as that number may sound too good to be true.

HIVE is down significantly from last year, so with HBD yield so high HIVE is not attractive at all.

I set my witness to signal for a 16% APR, but even the proposed 12% is still attractive and beat other DeFi protocols.

With 2 digits of APR we will still keep the supply of HBD increasing steadily.

Yes, we could leave it at 20%, but the ones who were profiting from 20% were people that already used HIVE and already had HBD savings. We did not manage to attractive new users just because of the high APR, so sounds like a reasonable time to me to make HIVE attractive again to get blogging and curating attractive again and keep users engaged in the social aspect of HIVE instead of the DeFi yielding aspect of HBD, which will still exist, still be strong and still be competitive and among the best options out there even at 10% or 12%

What if we apply the same rule of "if it is not broken don't fix it" to lower APR? We lower it, test it, if it is not broken we leave it low, if it is bad in any regard we increase it again.

If we consider that 12% is still a high and very attractive APR the same arguments for 20% are still valid for 12%, the only difference is greed for bigger and bigger numbers
But if we consider that 12% is low, then we are out of touch with reality because 12% yield on dollar is not low

Yes, we could leave it at 20%, but the ones who were profiting from 20% were people that already used HIVE and already had HBD savings. We did not manage to attractive new users just because of the high APR, so sounds like a reasonable time to me to make HIVE attractive again to get blogging and curating attractive again and keep users engaged in the social aspect of HIVE instead of the DeFi yielding aspect of HBD, which will still exist, still be strong and still be competitive and among the best options out there even at 10% or 12%

How do you know this? Do you have objective data that says it didn't attract new users? Or are you going with your "gut feeling"?

Gut feeling because our total market cap (HIVE+HBD) is in a downtrend even with the best APR out there.

Do you have objective data that says it did or did not attract new users? That would for sure help me and others take an informed decision.

Gut feeling because our total market cap (HIVE+HBD) is in a downtrend even with the best APR out there.

Could it be because whole crypto market cap is in a downtrend?

Could it be that HIVE failed to advertise its 20% APR, and instead spend ton of money on needless publicity stunts?

No, I don't have an objective data how many user 20% APR brought, but we will have it if the APR is reduced.

Thank you for this publication. I will spread it like wildfire in my groups. I think we have a lot of witness developers and we need some entrepreneurs with finance experience. I hope you will form a witness to support you.

Really insightful post as always. I've held same view for long now, the current HP APR is really of no consequence because I wouldn't want to buy a speculative and highly volatile asset because of interest it yield, my 20% interest earned at the end of the year could turn into -70% overall loss when the asset suddenly drops in price with no warning!

I think these APRs should not change atleast for a year. If set, it can reset after a year, this should add as a policy.
Better we understand HIVE is not HBD & here we are following 2 different strategies to capture different types of investments.

$WINE

Cheers~

There was a time when we all argued about the importance of increasing $HBD's capitalization.

Now we are reshuffling the cards. Doubtful large, uncertain $HBD investors could sell $HBD and $HIVE to exit the project entirely. And the price of $HIVE would continue to fall.

Lol, massive post about the HBD apr and here's me hasn't received an interest payment in 3 months and have only ever received two. The system is bugged.

Cg

Lol, massive post about the HBD apr and here's me hasn't received an interest payment in 3 months and have only ever received two. The system is bugged.

You have to claim your interest payment, it is not automatic.

Apparently you have zero HBD? lol

sadly it does not even make much sense to talk about anything anymore

everyone feels like some special tokenomics voodoo priester knowing what to change as IF THEY KNEW

and appear just to be INTERVENTIONISTS

we should have talked more about curation CURVE
FUCKING YEARS AGO

now it is gone - the chance

and we just have some top witness coordinating (posting about the same within A DAY while not having posted for over half a year - to influence, make the sheep also want what the big witness guys want - more profit for the great server admin, who do not only wanna be server admins but also juggle with interest rates like cool bankers)

instead of an alive community on an alive and decentralized platform

guys, just lower everything
HBD APR
posting rewards
but then also witness rewards to 0
cuz when we started, we can also just keep going

why stop woth HBD RATES - go on lower posting rewards!
we do not need people exchanging here, they can go to X
(@deathwing)

It's not a case of coordinated "alright guys we are going to lower everything" this was discussed months prior. And as I said in the post, the reducing posting rewards was purely my idea that I wanted to see what people think on, that's not being acted upon anytime soon. I think there are only a few witnesses who think something like that, it's not the general consensus.

well some of your followers seem to have misunderstood you and now THINK that lowering HBD APR is only possible by also LOWERING posting rewards

while it is the opposite
with lowering HBD APR we could even go so far and RAISE posting rewards again
to maybe reward those on whose backs the whole platform WORKS (people doing content, sharing/exchanging thoughts, having contact and conversations)
[not that I mean to tell what we should do, but in fact lowering one value gives the opportunity to RAISE another AND NOT THE NEED TO EVEN LOWER MORE [like posting rewards]]

and then one sees how much understanding there really lies as basis
none - it is more the motivation TO JUST DO ANYTHING/ CHANGE ANYTHING
interventionism

and we just circle on the same place and that will ultimately kill HIVE (AS PLATFORM AND MAYBE ALSO AS TOKEN BEFORE)
not the evil 20% APR or evil posting rewards

lol
well I'm now exchanging my HBD to HIve (as you witness want - but not because of you, but because I've planned that for way some time, also probably need to pay out again soon to survive my upcoming homelessness again - and Hive is just more liquid and easier to change to BTC and then food)

greets

HBD APR has no correlation with posting rewards, they're two separate things. Any talk about posting reward has to be carefully discussed (the actual reward, not the author/curator split) since it would have a significant effect on Hive inflation.

We raised HBD APR when BTC was >$60k and Hive was >$1, financially it was to attract new members, compete with LUNA (look at how LUNA went, right?) and since market was booming, we were able to afford it.

Technically, with the increased debt ceiling, we can still afford it, but its an additional risk after all. Since HBD interest is not connected to overall Hive inflation (posting rewards, curation rewards, passive HP generation, DHF, witnesses etc.) it is simply money printed out of thin air.

thank you very much for making it all clear

nothing against you guys, I actually think your actions are very reasonable

I think I just got a little confused with all the interventionist comments which seemed to want to change EVERYTHING (and not really for the better but just for the sake of changing it)
which would be THE WAY to destroy Hive - not as they claimed Hive would be destroyed if we did nothing (while I think it had the best chance if we decentralize more, so noone single and even witness groups are even able to change - solidify the ruleset basically and make it a truly decentralized platform)

so I basically think the opposite of the hive alarmists

while I can also understand that Hive investors may feel a little left out (while they also always had the chance to profit from HBD)

thank you - we should not create the NEED TO act (about debt ceiling) by waiting to long
but also not CHANGE UNNECESSARY things
and maybe think about 50/50 posting/curation and curation reward CURVE in general again, before anything else
(while it probably seems too late now)

greets

As stated, you can bump the APR on HP to 15%, if the price goes from 30 cents to 15, how are people going to feel?

Building more use case on hive to attract more user will save lots of energy than pondering on any APR increase or decrease, so long HBD is sustainable with the 20% apr there is no need altering it.

HBD has been amazing at retaining its peg!! If anything bump it back up to 30% or a couple percentage points or just leave it at 20% but do not lower it. If it appreciates similar to Hive interest/curation I think we may lose the peg and value of the token.

I'd like to see it lowered based on my comments on Edict's most recent post.

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Great post and some really insightful points here.

I agree that we need to focus more on building applications rather than just playing with the tokenomics. Building a stable Hive economy can only be done by relying on HBD as HIVE is way too volatile for now.

Have we ever had a marketing proposal designed to target them? The answer is no.

We had one: https://peakd.com/proposals/@behilarious/dev-marketing-proposal

Despite enthusiastic feedback, it failed to rise above the HBD stabilizer proposal and was not funded.

... for every HBD transaction, HP is required somewhere.

That's not really true. An account with 0HP can make some episodic transactions without a problem, especially if they are only financial transactions that are cheap to broadcast.

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Hive's major problem is its barrier to entry. People have to first create an account then they have to find a way to get hive. Not everyone wants to KYC into an exchange and expose themselves to regulating bodies.

The limited amount of "swap" services out there also do not really tackle this due to their high fees and again the KYC aspect.

IF somehow we can have some sort of wrapped hive on eth and other chains that can easily be bought through a DEX then transferred somewhere for unwrapping would be a game changer if properly done.

The problem hive will always have in terms of price is the "revenue" for blogging and curating is paid out in hive power or half hive half hbd. For anyone "living" off that revenue or cashing out, that is a lot of perpetual sell pressure that can only be protected for so long by ARB bots.

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