I agree that the APR should have a certain flexibility and maybe it should be linked to certain indicators like amount of HBD in savings or price of Hive.
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I agree that the APR should have a certain flexibility and maybe it should be linked to certain indicators like amount of HBD in savings or price of Hive.
The APR is flexible and can be adjusted anytime. In fact, it lately jumps from 19% to 20% depending who becomes the 21st witness on the cycle. Also, there is a debt ratio above which no more HBD is emitted as rewards (I believe it is 30% currently, and we are at like 7%). If we reached that debt ratio, I believe the wittnesses would cut the interest rate down.
I believe there are two levels of the haircut. There is one level where instead of earning HBD, we would earn Hive from post rewards and there is a second level where HBD depegs from the dollar value. The problem I see is not the growing supply of HBD but the growing supply in respect to the price of Hive. The more HBD is in circulation, the higher the leverage on the dept ratio is. If Hive prices drop by a significant amount, the haircut can be activitated without it being predictable. In my opinion if this happens, it would be too late to lower the interests because there might be panic on bord with unpredicatable consequences.
Yep, that seems about right. We've already expirenced no HBD (well, SBD) rewards being emitted. I think it was around the time Steem was worth like $ 0.1.
And a pre-haircut time, when author rewards slide from HBD to HIVE until only HIVE is paid.
Would you link this by code or leave it a human decision? Both have good and bad sides. Code is inflexible but gets executed no matter what. Humans are flexible, but sometimes avoid making decisions or make the wrong ones (but can correct them). That's not to say that actions by code cannot be wrong. They can be harder to fix sometimes.
I think that when things are not decided by code, it's often a battle of ideas which can bring out the worst in us. I would prefer a code solution honestly.