RE: How much APR on HBD savings?

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hirohurl in Threespeak • 9 days ago

At the end of last year I published this blog post about how HBD seemed to be pulling back from getting a "haircut" - and included an explanation of what the "haircut" is:

https://hive.blog/alive/@hirohurl/hbd-back-from-the-brink-of-a-haircut

So far this year, however, the debt-ratio has kept on rising to new highs and is getting closer and closer to the 30% haircut trigger. The screenshot shows the current situation:

Screenshot 2026-02-26 3.50.11 PM.png

It's worth listening to @starkerz to understand why this is bad:

Given all that, I think the interest rate ought to be lowered to 10% for now.

However, one objection to dropping the interest rate when the price of Hive is low is that it could cause investors to sell and leave Hive altogether instead of selling HBD to buy cheap HIVE, thereby driving the price of HIVE even lower.

Of course, even cheaper HIVE would be a compelling buying opportunity. Also, if the haircut kicks in, HBD investors won't be getting any interest payments at all.

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9 days ago in Threespeak by hirohurl

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mypathtofire 9 days ago (edited)

They removed the "haircut" a couple of forks back. As it is now, the "equity" Hive, is less than the HBD "debt"...

My calculation the Market Cap of Hive is 9.725M USD - HBD not in DAO = 10.4M USD... Hive/HBD in the DAO represents over 72% of the Hive supply... if they burnt it all, it would be like taking a chain away from around the neck of Hive... but still the debt is HUGE compared to the true market cap..

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hirohurl 9 days ago (edited)

They removed the "haircut" a couple of forks back. As it is now, the "equity" Hive, is less than the HBD "debt"...

I talked about this to several people at Hive Fest and everybody discussed the situation as if the haircut rule still existed. If there is no haircut then the situation is worse than I realized. What's to stop us going the way of Terra now?
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mypathtofire 9 days ago

They are tied together, they go down with the ship.

I did the math on my latest post, you can check there...

Greets to Japan! :)

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hirohurl 8 days ago

Greets to Japan! :)

Thanks @mypathtofire - I can't find any info about the haircut having been "removed."

The haircut rule is still on the main page about HBD: https://hive.io/en/hbd/
It is true that the hard haircut was raised from 10% to 30%, and the soft limits raised from 9-10% to 20% (where we are now) by Hardfork 26, three years ago: https://hive.blog/hive/@hiveio/the-evolution-of-hive-hardfork-26

Has anything happened since then to change the rule? If so, where is the announcement?

Thanks!

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mypathtofire 7 days ago

The haircut wasn't raised, it was removed, they lied.

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achim03 6 days ago

What I see as a problem with low hive prices is that every HBD printed through interests adds 15 hive to the circulation without bringing any use case other than adding a return for people holding hbd in savings. At the same time, this adds pressure towards the haircut that once it's reached the parity will drop. this will be much worse than lower APR I believe.

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hirohurl 6 days ago

If the hard haircut kicks in, what are the potential negative impacts on 2nd tier tokens such as LEN, CTPSB etc, and can anything be done to mitigate those impacts?

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achim03 6 days ago

What should be understood is that the hard haircut is in place to protect hive. In the short term it probably adds uncertainity but in the long term it would reduce inflation through HBD so I don't think it would have a direct negative influence long term on 2nd tier tokens.

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liotes 5 days ago

3 credits were added for the Liotes Ranking

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