RE: 4 Reasons for Lowering the HBD Savings Interest Rate
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Hi! I have to admit that I'm still a novice in the financial world of Hive, but your article has piqued my curiosity. So, I'm going to try to answer with my noob words and thoughts. I might be wrong, but I find it interesting, especially as I embody the perspective of a newcomer.
To begin with, regarding the 20% interest rate, my first reaction was to think it sounded unrealistic. I discovered this on my own and didn't pay much attention at first. However, you have to admit that cryptocurrencies operate on principles that differ from traditional financial systems. So this rate could simply reflect the new economic realities and opportunities offered by blockchain technology. Couldn't it, in fact, help Hive attract new users? It's a very good argument, and the perfect gateway!
As for control and accessibility, I find it reassuring to be able to get a return on my investment while retaining control of my funds. Above all, it gives me the impression that Hive places great importance on the security and trust of its users, although I could be wrong, as my expertise in economics as applied to Hive is almost non-existent!
Well, finally, I see the HBD as something easy to explain to someone who knows nothing about cryptocurrencies (like my grandmother, for example). It reminds her of something familiar and reliable: the dollar. So, initially attracted by a 20% interest and her grandson's benevolent advice, she might find herself getting more involved in the community once she better understands its benefits. That's kind of the path I've taken.
I hope my beginner's perspective can provide some interesting food for thought, even if the level of your article remains a little too complex for me ^^
By the way, I'm going to read the other comments because I think all the points of view are really interesting.
I've just read a few comments. I'm beginning to understand that the 20% interest rate on stablecoin hasn't brought much to Hive. But since when is it set at 20%? It takes time for people to get there. I've been talking to my girlfriend about Hive for 2 months, every day, at least 60 times. Yet she's still not here. She's got an account, but for the moment she just checks in once in a while, 1 time a week I think.
It takes time to change mentalities. I don't know how much marketing is done outside Hive to promote Hive.
Well, that is my opinion - I think it is not beneficient in anyhow. There are other opinions for sure :)
I believe it was introduced 3 years ago, but I am not 100% sure about that.
My girlfriend has an account and and hasn't started blogging either :) And I have been around for six years. Don't worry about that :)
Thanks for stopping by and commenting with basically a stand-alone post :)
Yes, the 20% interest rate may seem shabby, and I tried to express that in my post. It sort of soaks up funds from the Rewards Pool as @phortun suggests (he or I could elaborate it a bit if you wish). That may not be wrong - the RP is huge (HUGE) considering the number of users. There should have been tens of millions of creators sharing it by now, and there are thousands.
HBD would be great as a commonly used currency, just like you say. Our gradmas could easily comprehend one dollar worth of token that is worth a dollar today and will be worth a dollar in June. That's why I would like to see it as day-to-day payment token.
However, I'd discourage my grandma from anything offering 20% APR. And you should do so too. Even though it's Hive, which I have a lot of confidence in.
Okay, I feel like I'm starting to understand some of the subtleties. I don't have a lot of data at hand so I'll let you validate my thoughts or not.
So in the end, the 20% HBD is a kind of experiment whose objective was to see if it would attract users and encourage people to publish? I'm sure it goes further than that, but that was the primary objective, wasn't it?
On that basis, the conditions for keeping the HBD at 20% could be as follows:
And if all this data shows that the 20% rate is unfavorable, then it should be lowered. But shouldn't it first be lowered to 10 or 15% instead of directly to 3%?
Shouldn't it be lowered cautiously, assessing the potential impact on the whole ecosystem? Then, I imagine, there could be an observation period to assess the effects of this modification on the platform's dynamics.
Yes, if I am not mistaken, the idea behind that interest rate was to make the ecosystem more attractive for outsiders and then convert them in regular users. I don't think it was a success, though.
In my opinion, anything should be more profitable that curating. As you cannot get over say 10% APR on your curration, the HBD APR should not surpass this treshold. Otherwise it is an incetive to quit curating and use Savings instead.
The rate is quite flexible, it can be changed anytime to almost any value, it is just up to witnesses.