For awhile I have been thinking about what Hive would look like without HBD. The Hive Backed Dollar has been around for as long as Hive itself, and goes back before the fork as well. Much as changed since then with its economics and yield. The markets have also changed quite a bit since their creation, now making HBD seeming less suitable than it did when it was launched back in 2016. With the drop in the price of Hive, this puts extra pressure on sales of HBD due to this. So at time of low token price, keeping a stable coin going does not seem like a smart plan.
Based on dalz reports, much of the selling pressure on Hive comes from HBD conversions and the DHF. Recently the Decentralized Hive Fund has had a major haircut, seeing daily funding drop considerably.. And even HBD has had its own form of soft haircuts with the reduction of interest rates now half of what it used to be sitting at 10% at the moment.
So what would Hive look like without a secondary token? Estimated payouts on posts would be set in Hive and not USD. Though front ends could still do an estimated conversion without the need for HBD. Besides that? I guess we would no longer have a stable coin and DHF payouts would be in the form of Hive instead of HBD.
And without HBD around, the interest rate would not cause selling pressure. And if HBD does not have any benefit to hold, besides pegged to the dollar. It will quickly have low volume, so I think it would be best just to get rid of it.
But how do we get rid of HBD without hurting the current stakeholders? That is the second part of this issue, but I think I have an idea.
The minting of new blocks would have to changed for a certain amount of time. So all of the rewards across the board would need to be reduced. Author rewards, curator rewards, and witness rewards. So each would need to be reduced by 33.3%
Once this has been done it would built up a treasury of Hive funds, these could be set in the code to pay out to HBD holders over a certain amount of time, based on their stake at the time of the HBD snapshot. This process may take years, honestly I do not know how to calculate how long this would take. Maybe someone else reading this post can figure that out. But I would hope it would be like this until around 2028, just to time ourselves with the next Bitcoin halving and potential bull market.
As these funds pay out to the HBD stakeholders it will be powered up, to reduce selling pressure right away on such a change. But those Hive traded for HBD can be powered down during the normal period if they choose.
Once all HBD has been converted back to Hive and paid out to stakeholders the previous block minting will return to normal.
So that is basically my thoughts on how to remove HBD while still addressing the stakeholders of the token. It would be a major change, requiring the code of the blockchain to be altered for a period of time. And eventually completely removing HBD from the ecosystem.
Selling happens because DHF receivers sell HBD at any price. They also sell hive at any price, HBD sell is also hive sell indirectly. They sell because they have to make payroll. Trouble is, this perpetual machine can't generate money for the DHF receivers indefinitely without any demand.
HBD is the ONLY successful and surviving algorithmic stablecoin!
That is of immense value for decentralisation and freedom.
All other surviving stablecoins are controlled by large centralised institutions and backed by fiat currencies.
What complete short sightedness to suggest amputating a healthy, core & very successful part of the HIVE ecosystem because of temporary price concerns that don't even matter to the real purpose and future of HIVE.
HIVE's success is not determined by its price or even the number of posts.
It is determined by the functionality HIVE provides, the community that uses it and the technology stack that is being prepared for a future when HIVE is one of the few surviving cryptocurrencies.
This focus on the selling pressure on HIVE is completely wrong headed and short sighted.
The price doesn't matter and even if it does the solution is to create demand by getting more developers to see the extraordinary, low cost utility that HIVE provides and a permissionless decentralised database.
Everything survives until it doesn't. Doesn't mean much.
Economics is bad and HBD risks depeg as HIVE trends lower while debt is high and DHF emissions are also high (relative to mcap and trading volume)
It's all a bit over my head. I think there will likely be some people who have some good input on this. It's an interesting idea for sure.
basically block minting would need to be modified to pay out HBD holders temporarily.
Interesting take!
I always enjoyed sitting on my hbd savings and having post payouts listed in near usd and would love to see that not change. I also dislike making big decisions when not in a position of power like we are right now with the token price and state of crypto in general.
It will be neat to see how this plays out and creative proposals/discussions like yours are what will drive the evolution here!
Hey Zeke,
I get it, I used to have HBD savings too. The payments in Hive were nice, but we should really consider looking at all the selling pressure that is being put on Hive right now. Especially due to the price it is at. Like I said in the post, front ends could still calculate a Hive post reward value to USD.. It would just not involve HBD anymore..
Heard you are going to be a guest on Hive Thrive next week. Looking forward to hearing you on there. Ill do my best to tune in.
HBD rewards was always a bit unfair since the Author got them and the curator not. Added a lot of imbalance IMO
I think they pay out an even 50/50.. even if not paid in HBD you get the equivalent in Hive.
thats true. But why add another asset to only 1?
Put me as against it.
All tools cut both ways.
With hbd, and a dex(with liquidity), we don't have to leave the ecosystem to find price stability.
Forcing folks into hive would increase volatility, imo.
When the price runs with us, things look good, when the price goes down, everybody leaves.
At least with hbd we can have some stability.
Power is on sale, those holding hbd should power some up, imo.
Buying in lower is becoming increasingly unlikely.
well i said it for years. HBD is a short contract that adds no demand in return as soon it gets executed. ( Lot of smart hive whales called me retard for this and the math around).
HBD has another problem based on hive ( is 1 whale controls DAO and makes this way all other votes worthless. Same problem as Steem days had).
So the incentive to get more hive is low since influence is also low.
To general hive rewarding on content i have a more extreme point of view. What if no rewards or cut them by 80%? If hive is worth a lot, rewards still good. If not, it adds lesser pressure.
I dont see content adds a lot of long term value to the chain at all. No unique content and curation itself does more damage as good. Mostly is "positive one side reporting" and calling someone a retard or disagreement ends always in a stake duel.
Pretty gay tbh.
A short last point on HBD, it doesnt need to bad if it would have unique feature like zk shield + zk pools onchain + less printing from DAO for retarded waste. Like AI subscriptions are a massive waste since it adds 0 value ( and all other charity like things).
Imagine all the HBD would be spend on pools. BTC/Hive + SOL/ Hive + whatever hive. This way there would be any value from all the spending. And Hive has another problem, vision. What is the roadmap? What is the plan? Curate more content?
Yeah I would support cutting it even more.. the 33.3 percent was just a basis to work from.
I think Hive itself can do alot more than what we have with HBD, and seems like keeping HBD around is causing more selling pressure than we really need. So I guess we shall see how it all plays out, this would be a huge change.
Not sure about pools, I dont really mess with them. Being an American I have to keep track of all altcoin trades and those pools make a nightmare to calculate. But also an American I think pegging Hive, an international altcoin to USD is not the best idea as well.
Agree on both. My point was more about liquidity and utility that comes with it.
I don't understand the selling pressure when it's this low. Is it just larger stake holders selling off or is it across the board?
Seems to me staking rewards would have to apply to Hive too of HBD went as incentive to stake. Maybe that should happen anyway instead of being framed as a moral issue. It takes more than many of us have to save Hive to increase stake big enough to make a difference despite the rhetoric.
It sounds like this could really backfire, it could be really challenging to explain to investors why HBD is going away...
It could also leave a bad taste for those who are forcefully "cashed out" of their HBD
I've been against HBD ever since I figured out what they were
To be honest, I don't fully understand the technical aspects of the conversions or the math behind HBD, but I really appreciate these discussions about the future of Hive. I hope that those handling this issue and everyone who has the power to make Hive a better place can reach an agreement.
I'll study this further to understand it better.
I have not much to say but the below is the reason of price fall, You share a good idea, now implementation is like a dream hahaha.
1,000,000 HBD
↓
Millions of HIVE created/released
↓
People sell HIVE
↓
Price falls
It seems like a proposal that's causing quite a stir. I don't know much about cryptocurrencies, but do you think that if it's implemented, Hive could flourish, and why?
I'd be for it so long as there would be an increase in HIVE staking rewards as well. It would encourage people to lock it up and stop dumping it.
Magi would likely need to re-code a bit but simplifying things to just HIVE would probably encourage more people to buy it. Someone would have to look at how much volatility is being contributed by people arbitraging between HIVEN and HBD, and if killing HBD would tank the price of HIVE as a result.
!BBH
!PIZZA
!ALIVE
Great idea. But I have seen most of the ideas that users put forth doesn't get heard and we are back to square one.. I think there should be some controls on minting of Hive and HBD with witnesses.. Cheers
I was thinking at this few days back, but you've said it and explain it very well.
$PIZZA slices delivered:
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Please vote for pizza.witness!
I can see selling HBDs will buoy up the value of Hive in the short term but I'm not so sure if that will be the same in the longer stretch. I've been thinking about the HBD over the last year and a half and lean more in favor of phasing it out. This should have been considered years ago before we got to this point.
Thoughtful....
Till I thought holding HBD is the best idea 😅
Sunseting HBD would definitely eliminate that dilution pressure during bear markets. However, the 33.3% reward cut worries me, it could trigger a massive exodus of creators and witnesses to other chains before 2028. It's a tough trade-off between code-level financial stability and user retention.
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STOPKeep internal market converter as it is
But one way
Only hbd to hive
And not hive to hbd
Solved your problem
But then again HBD is a truly decentralized algorithmic stable coin. When USDT crashes, people might look for HBD