RE: Hive Inflation for July 2024 | Running Hot for a Second Months in a Row!

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RE: Hive Inflation for July 2024 | Running Hot for a Second Months in a Row!

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starkerz in Hive Statistics • 3 months ago (edited)

@dalz, this looks like an emergency.

I’m guessing most of this is due to HBD APR being constantly converted into hive each month and then sent to Binance for selling to fund people’s living costs passively.

Is there any evidence that this is the case? I’m assuming here that the hbd being converted back into hive is being sent to Binance and sold.

If this is the case, this is hbd holders diluting hive power holders and it should be considered an attack on the eco system (albeit most likely unintentional, but this 2.5 year bear market in the hive price is also unintentional. Hive price ain’t going up, how are we giving out free money to passive holders in such circumstances?)

Is this where we are at?

Are we damaging the hive price so that HBD holders can cash out at an ever greater proportional cost to the chain each month?

If this is the case, then the days of high APR, imo are now demonstrably completely unsustainable and need to come to an end fast before this gets worse.

We will have to take short term pain as the HBD holders convert back to hive and cash out to find such wonderful free yield elsewhere, but at least the chain will have a chance to survive in that case.

Imo we are playing with fire here. Maybe I’m wrong, but personally, I’d rather act with caution and deleverage risk from the eco system during these insanely difficult times for hive power holders

3 months ago in Hive Statistics by starkerz

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dalz 3 months ago

We had a lengthy conversions about this on discord, touching on multiple points and issues, and just for transparency and if someone whants to read or add something I will list a few thing here:

hbd is debt, do we have enought growth to support the debt?
interest adds debt, around 1.6M yearly
DHF adds debt, 3M yearly
virtual HIVE supply as inflation basis, that includes HBD in the DHF adds more inflation when the prices drop
regular HIVE supply as inflation base will reduce inflation

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starkerz 3 months ago

For clarification:

We will look to prioritize removing the virtual (DHF) supply from the inflation basis of hive which should not be in place unless we see two higher lows on the rails and the 20MA above the 50 MA (hive price going up, not down)

Discuss reducing the size of the DHF to protect hive from an inflationary spiral

We will also look to lower HBD APR drastically

We will look into reducing / eliminating non essential spending from the DHF.

Let’s see how this goes

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ertytux 3 months ago

I agree with your observation, if the HIVE flow converted from HBD that then goes to Exchange accounts is recorded, your hypothesis can be confirmed without much effort. We need to educate our HIVE/HBD users to better ways to use their money without leaving the ecosystem. I also agree that the APY of HBD is insane, in any case it should be lower and that of the HP higher to balance.

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vimukthi 3 months ago

What do you think about using DHF to buy and burn HIVE off the market as a temporary measure. It is very easy to move up the price of HIVE based on the current liquidity levels. If there was a script that buy and burn HIVE from market at random intervals, could this be a positive (at least for the short term). I'm merely exploring possibilities. I have not fully analyzed the potential side effects.

HIVE price going up will mean more HBD getting added to DHF. I have not done any calculations. There must be some levels where burning HIVE + any pumps caused by it leading to DHF gaining more HBD than it spend.

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starkerz 3 months ago

Possible!! Worth considering

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vimukthi 3 months ago

Thank you for your feedback!

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