I think 20% is fine. We need people to hold onto HBD and give HBD enough value to actually become a stablecoin that people will use. Currently, there isn't really enough HBD to make an impact that much on the inflation and if that were the case, I would expect people to be making more noise about it. However, I think it's better to keep the APR so that HBD can succeed as a stablecoin for now.
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Thanks a lot for your opinion!
How does the APR help HBD to "succeed as a stablecoin"? With such APR, it does not make sense to use it for daily payments to me - it's smarter to keep it in Savings? Or do I miss something?
The interest rate is not the only way how to mint HBD. You can convert Hive to HBD anytime. So in a way, there amount of HBD equals Hive market cap (currently around $150 million). The easiest way how to increase the HBD volume is to increase the HBD market cap by increasing its price.
However, the value of Hive is added through content creation, curation, and projects such are games. Paying out HBD Savings interest takes resources intended for the contributing ones and distributes them among the passive ones (the Savers). This post tries to explain why the interest rate should be reconsidered, and there is a great discussion too.
First off, I think we need way more HBD to be out there and for the liquidity to be large enough if we even want to consider HBD as a stablecoin. I think the HBD interest there will provide more incentive for people to get more HBD and that is better in the bear market. Afterall, what incentive is there for people to even want to keep HBD around if Hive is the only thing that people care about? The economy revolves around people using the currency and that is done through places like Sucre. We will want more people to do so and I think even Ragnarok wants to use the HBD interest to generate value in their game. I still think that anyone trying to get more HBD through places like the internal market will suffer quite a bit and that is because there isn't enough HBD out there. While it may be locked, when the HBD debt ratio becomes higher (enough HBD is created), then I think reducing the APR might be a good idea.
Marketcap is one thing but I think you need to consider the HBD debt ratio. It's fairly low and way below 10% right now. If that ratio were to go up and we need to cap the HBD production, then I would say that the APR might need to drop. However, that is not the case and I think 20% is perfectly fine as it is not affect Hive that much. I think HBD and Hive have their own advantages and if Hive were to pump a lot, then it will prove to be a better investment compared to HBD.
Also, I think a lot of the people saving HBD also care about Hive. I personally am stacking both HP and HBD. HBD is just one of my options and in a way a hedge. If Hive's price were to drop quite a bit, I would take out my HBD and use it buy Hive. If Hive were to pump quite a bit, I might consider getting some HP out and turning that into HBD.
The discussion around suggests that it would be better to get back to the original purpose - a bond. It make sense to me. Even if we wanted this not a stablecoin to become one, the interest rate is an incentive to vest it, not to use it. If you keep it luquid and ready to transfer, you're losing money.
Regarding the debt ratio - we produce debt we have to pay out. And what do we get in return? As the comminity/network, not as somebody who vests HBD? Which is something perfectly racional and I don't blame anybody for doing so. Is that a "smart" debt that will bring profit or is it just a burden that will make us pay $ 1.5 million of interest this year for more or less nothing?
Fine. There are people staking both HBD and HP. But have a look at the top HBD stakers. That's the second one. This accound would earn $ 25k on the interest rate. Does it bring anything? True, this account votes with like 25 HP and gets more or less more or less the same interest.
I mean we obviously see people who participate in the community, when somebody just stakes tens of thousands of HBD and does nothing besides that, you'd hardly notice them. But such people are out there, getting their share from the RP.
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