Witness Update: HBD APR

The 'guiltyparties' witness set its HBD APR to 20% earlier today. Why? This is a key decision and it should have an explanation. Some reasoning from a D2B (decentralized to business) outreach and partnership perspective, which is a key focus for myself, is in order:

Hive is unique among crypto-based platforms. There's no pump and dump, no core company that gets a fat paycheck, no goal to startup and sell. No matter who thinks what about Hive, it's unlike most others in the same space. But it shares that space nonetheless and while it doesn't play by the same rules, it is expected to play by the same rules. What I mean by that is everyone else in the space has expectations of what they want to see at the point of connection, not to mention investment.

Before I get into this, let's get one thing straight: Hive is a pioneer and a leader. We don't need to follow others' scam patterns and we frankly couldn't do it even if someone was so determined; Hive is decentralized and there is a balance of power and a balance of influence. No one individual or group can destroy Hive for personal greed or interests. And no one individual or group can claim ownership or undue influence on Hive. It's everyone's project that's united by a greater vision. No one works this hard for 'easy money'; we do for our combined goals and our community.

Just like many elements that shaped Hive and led to its existence, this unselfish approach to supporting true decentralization and greater vision is novel. When prospective dapps or defi ventures that want to link to Hive reach out, many can't understand how it is that there is no CEO and no Director of Bullshit Innovation. When I introduce myself it's by the role I'm undertaking at the time, not by title. Hard to process for most. Who asked me to do this? No one. No one has to ask anyone to do anything in a decentralized project. All contributions are based on our own initiative and ability to support Hive. This is how Hive grows and moves forward.

So let's circle back to our topic here, 20% APR. Put yourself in the shoes of a project that wants to partner with Hive. Normally you'd be able to ask for whatever finances or integration budget, various types of bounties, in order to partner and bridge with another ecosystem. Centralized platforms have that because what they've done is print themselves a large budget. We don't have that and that's just one of the facts of decentralization; there is no one pile of money to draw from and buy our way to the top. We have to work our way to the top. That being said, prospective partners don't understand that. This is new to them and while it's explained, it's unusual in our current tech environment. The answers have to be clear. And the question is: what are the ways and benefits of staking on Hive?

Our main draw for our community members aside from the community itself is posting, which is content creation, and curation, which is content consumption. People love sharing what makes them tick and supporting others. Curation allows those voting to get their share of profits that a post generates. This is great for those who want to immerse themselves in the Hive ecosystem. It is less than ideal for those who wish to invest but are just taking their first steps towards understanding Hive. We have various Level 2 solutions like Hive Engine and its tokens, Dlux, now the SPK network, of course the games, but these all take time to get into and learn more about. People are willing but they also want a quick answer. Something that can be done with almost no specialized knowledge.

(Back in the early days of pre-Hive the go-to was to offer reward pool extraction or similar solutions which are very much driven by centralization of decision and lack of consideration for the greater community. Those days are far behind us. There is no D2B discussion that has ever or will ever include recommendations which can be seen as abusive and disrespectful to our fellow Hive community members. Decentralization is the natural enemy of centralized corruption.)

This is where the HBD APR % comes in. Everyone knows what an annual percentage rate is. It is a common concept, there is no 13 weeks and voting and RCs to consider. It's clear and it's attractive. @Smooth's HBD Stabilizer keeps HBD pegged and stable and it has been successful by all measures, anyone can see that it's as pegged to USD as it can be. I can invest let's say $1000 in HBD as a new investor and I can be confident that a year later I will have at least that. But, as an investor, of course I want to have more than what I started with. This is what determines whether I invest and this is where the APR is critical. An APR that makes investment worth it is necessary.

But ... If we had let's say 200% APR then we'd be looking at another question and that's the question of legitimacy. To be trusted, stability is necessary. There are a lot of projects that offer a crazy APR. Half the time they're rug-pulls, the other half we don't know what they are. We just invest and hope that we get the hell out before the rug-pull stage hits the roadmap. Stability is needed here. And Hive is a long-term, relatively stable ecosystem. Even if we take into account the hostile takeover, it is still stable. We recovered from the privatization and destruction of a public blockchain. Some people didn't even notice the change. So stability is important. Stability of the project, of its ecosystem, of the currency, of investment in general. We take that stability of Hive in general and we place it on the scales against the returns of the staking mechanism.

Investing through HBD is the simplest and most straight-forward method of staking anything on Hive. And this is exactly what we can highlight to our partners and explain:

• HBD is stable and pegged to the USD
• It's a native coin and not a token
• There is a simple Savings Account feature
• It takes 3 days to unstake (which is a security feature)
• There is an APR % which is stable and reasonable
• APR is determined by the community
• Everything is transparent

There is nothing that can be misunderstood here and it's all clear and supports Hive as a good investment. Hive provides the business value that is expected of any partner by delivering just that: opportunity and stability. The opportunity, if it's not evident, comes from the APR. When we're at the current 12% that's attractive but not very much so. But 20% is far more attractive. However, if we went higher, to let's say 100%, we'd have diminishing returns because then we'd be giving up stability. We'd tip the balance on our scales against stability.

Sacrificing stability (even if its the perception of stability and in this post I won't argue on this topic) will ultimately reduce the faith that our current community members have in Hive and the faith that exchanges and our partners place in us. When someone selects at their discretion the best chain to build their dapp on, they look at stability. No one wants to put their heart into something that will disappear or become unsuccessful. If we jump to 100% for our APR now, straight from 12%, everyone will look at it and ask how did this happen. Is there manipulation? It's a major red flag. From a D2B teamwork discussion initiation perspective, everyone who deals with partnerships is always looking for red flags. No one wants to make a connection and it ends up harming their existing user-base (unless it's a scam project in the first place).

Hive doesn't pay for listings or any opportunities. We talk, we explain, we gain trust, and we collaborate. We find synergies and reach a mutual understanding. We deliberate to identify opportunities which would be beneficial for Hive community members and for the partners' supporters, clients, users, whatever it is they call them. Every opportunity is different and without the element of payment, it is ultimately based on honesty and the desire to work together. Coincidentally, this is what powers Hive: people working together to build a strong community. But the value of connecting with Hive is you can count on Hive, you can have faith in it, you can use it without major barriers and surprises, you can build and it's generally your own domain. When we introduce Hive to others, whether informally or through D2B more formalized initiatives, we transfer that confidence and grow together.

If it's unclear by what I already covered above, the 20% APR on HBD greatly helps with that. It's reasonable, it's beneficial to all stakeholders and investors, it encourages new investment, and it speaks to stability. This is purely from the D2B or marketing/outreach type perspective and provides due justification for our witness parameters.

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