I've been advocating for decreasing the HBD APR for years. I believe the healthy rate shall not be over 6%.
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Interesting. What is your argumentation for that? (Truly interested here!)
If it goes below 10%, I don't see too much reason for people to keep HBD, especially not in their savings wallet, as the return they can have by putting it to powering up their Hive can be much higher. And since HBD is basically a lending system to be kept in balance with the Hive that is in circulation, we do need to have HBD on the scale as well to keep the balance.
Or am I missing something?
BTW: I noticed you removed your witness vote from @botlord right after the HardFork, for which I was a little too late and missed some blocks. If you'd reconsider, I'd be very happy, and I promise never to let it slip again ;-)
I did remove the witnesses which weren't HF ready, I will check it again in a week or so :)
Here's my 2 years old take on the topic: https://hive.blog/hive-167922/@godfish/4-reasons-for-lowering-the-hbd-savings-interest-rate
Well, thanks for reminding me on browsing through my own witness votes list again ;-) It was a good time to do that now :-)
Read your take on the topic ;-) And I agree on your points, but I think the solution lies more in the middle (12% ;-) ).
- True about the demotivation to participate. For some. I think if you lower the APR to 6% now, you will get a shift from HBD to HIVE for people that are already active on Hive. The ones that have their HBD parked here for nothing but the gains will not suddenly become active, they will or never notice (or in a few years only, when they want to bank their gains), or they will notice, remove their HBD and be gone from the network, looking for something better. At the same time, you are "punishing" the ones that were always here, were active & saving at the same time, and will continue to do so.
- Same goes for the governance & long term activity I think. Having a nice savings account on Hive keeps people here, and keeps them active to receive more HBD through posting. Lowering it too much will chase them away.
- Not sure about the currency adoption point... I do hear from a lot of people that they have their HBD in savings, and use the interest payment as liquidity. I even know of a few who count on that to partially feed their families.
- The 20% interest as a red flag, yes, agree on that, it does make the whole thing look quite a bit sketchy :-)
But taking all these very valid points into account, I am mostly inclined to try to keep a balance between HBD interest and Hive earnings and all. I also believe that the APR needs to be reconsidered regularly. And I definitely believe that we first need to look at other things that need cleanups.
Well, from what I see some 2 years after publishing that post:
- 6% APR with little to no risk is still pretty neat. Likely unbeatable. Can you name a single asset which allows you to invest as little as $1 with no transaction fees, no KYC, and basically no restrictions whatsoever? With all under your control, as you have the private key, unlike when you stake your coins at an exchange? I doubt the few people who only use Hive for HBD Savings would quit just because of that.
- I don't see people sticking around for savings, but that's perhaps just my social bubble. I have no data to prove this point.
- A currency needs to circulate. Spending HBD doesn't make sense when you can stake it with this APR. No circulation, no economy. Spice must flow (the Dune reference), and so must money.
- 6% is indeed still pretty great if you take all those points into account! Especially with the KYC and all that... Although, not sure if you are able to retrieve your HBD into regular usable Euros in Europe without any way of KYC... But as I said, not sure, I just don't know, haven't tried.
- I understand, in my regular social bubble, I don't see it either. It was only by stepping waaaaaay outside of my regular bubble and comfort zone that I learned about communities where Hive and definitely HBD is incredibly important. And I must admit that it was quite an eye opener...
- I agree on the need to circulate (spice must flow for sure! :-) ). But there is also a need for incentive to save as well. As always, balance is key!
I have, as I think almost always when talking with you ;-) , the idea that our noses are definitely in the same direction, that it is a matter of finding the right setting ;-)
Thanks for sharing your opinion! Greatly appreciated, and I will definitely be considering your points further!
And also thanks for the re-witness-voting :-)