We all know by now that the Hive blockchain is a web3 social media platform that allows users to earn rewards in the form of Hive tokens for their content contributions to the platform and other means of engagement through different communities and projects. While the governance token of the platform is Hive and through powering it up you can earn from curation, there is also an alternative for a more passive earning in the form of HBD Savings. Through this feature at Layer 1 level you can deposit HBD into a Savings account and earn 20% compounding interest as an incentive for holding HBD stablecoin rather than converting it to Hive and Hive Power and earning rewards through curation and commenting. And while I have moved all my HBD into HIVE in order to capture the governance token uptrend, I just realized that there are some important benefits for HBD Savings compared to Hive Power.
100% Passive income stream
First of all, HBD Savings provides a passive income stream. By depositing HBD into savings, users can earn 20% compounding interest without having to actively curate or comment on posts. This allows users to earn rewards while they sleep, without the need for constant engagement or effort. This can be particularly appealing for users who may not have the time or inclination to actively curate or comment on posts, but still want to earn rewards on their HBD holdings. And believe me that I must confess that I miss the laziness of earning while I sleep or I don't need to do anything all day long.
Stable and predictable earnings
Another benefit for HBD Savings is the fact that it offers a stable and predictable earning potential. Unlike earning Hive tokens through curation and commenting, which can be subject to market fluctuations and varying rewards depending on post popularity and voting patterns, HBD Savings offers 20% APR that you can always count on. This provides users with a stable and predictable earning potential, which can be especially useful for users who prefer a more conservative approach to earning rewards or who may be risk-averse. My appetite for risk has opened up lately when I saw HIVE hovering around $0.40, but cannot beat a steady and dependable revenue.
Higher flexibility and liquidity
Another benefit which also inspired me to write this post is the fact that HBD provides flexibility and liquidity. Unlike Hive Power, which requires users to lock up their tokens for a long period of time and may limit their ability to freely transact or withdraw their tokens, HBD savings offer greater flexibility and liquidity by only a 3 days cooling period. And if there is a market pump, you can always use HBD to HIVE conversion which should give you 50% of the funds converted in Hive right away and the other 50% after the cooling period ends.
Bottom line is that even if I have converted all my HBD to HIVE and powered it up when the Hive price was $0.40 and through the price appreciation and curation I have some nice gains, I still miss how passive holding HBD into the Savings account is while earning a sweet 20% APR. Thus, if you are lazy or simply don't want to have a routine for curation and engagement, HBD Savings is the perfect option. And I intend to get back at it once Hive price continues to appreciate and get closer to the $1 mark.
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HBD is better for price stability and that is why I am growing my own HBD stake in the savings. Hive might work out better in the long run if price appreciates but we have no idea when that happens and staking it would also mean that you lock it up for 13 weeks. I would much rather prefer the savings because of the 3 day period to withdraw funds.
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True, HBD provides stable and predictable revenue as interest. Good for day to day payments and business operation costs for whom are running one.
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HBD is a perfect investment for bear seasons. So it was a perfect investment for the last 17 months. Once the bull market starts, %20 income per year won't be enough for us. And it is a perfect investment for conservative investors regardless of bear or bull seasons.
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I hope the bull market started as I've moved all my HBD into HIVE and powered it up. Even if it takes 13 weeks to get released, if Hive price go high enough doing DCA selloff is good.
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Very informative post!
I am going into the other direction.
I'm uncovering a large part of my Hive to covert it into HBD and move it to my HBD savings when the Hive price is right.
You mentioned some pro's already, but my main driver is that curating earns me less than the 20% APR that HBD savings gives me.
This could change when the price of Hive keeps raising. I don't know where the turning point is. I might regret it when Hive goes to 1 dollar, but I just have to be happy with the 20%.
From curation and content creation I am earning 30%. I believe that curation might stand around 10% out of that, but I think that the price appreciation itself can cover at least 10% in order to get to the 20% APR from HBD Savings. This is how I did the math and moved HBD to HP until the Hive price increases during expected bull run.
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I only calculated the curation. That is what I earn with my current stake.
The author rewards and 2nd level tokens are a bonus 😄
Either way it's fun and generating value!
It is quite possible that 20% APR is not going to be the constant thing forever. It might change based on the trend and what top witnesses decide. I also personally think that 20% may not be sustainable forever. But yeah it depends. Check the below comment
https://hive.blog/hive-167922/@smooth/rt6ag7
That's true. Still, even if the APR% decreases for HBD Savings it might still make sense to hold some for 100% passive revenue and just to be lazy all day and all night long. 😃
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if they keep lowering and raising the rate, then many people will leave the Hive blockchain - there must be long-term stability!
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Yeah true if HBD is converted to Hive power completely, it becomes a trading game completely and people will have to wait to book their profits.
if they keep lowering and raising the rate, then many people will leave the Hive blockchain - there must be long-term stability!
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I've also thought about the time when HIVE is getting closer to $1. Starting the unlocking process close to that would be a good idea and then kinda DCA once a week to HBD. This is actually something I promised myself to do when I bought HIVE at a very cheap prices.
Yeah, this is my strategy as well for now.
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The stability it offers is definitely attractive! The potential for more is more attractive with hive so it’s a good balance of conservative and aggressive investments to have both. Hopefully you’ve deposited at least a couple HBD so you can take advantage of the interest rather than not earning anything!
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Yeah, I feel that I need to work for pushing curation up and I miss sometimes not to worry about that. But I believe there will be a better time in the future when it makes more sense to hold HBD.
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A lot of people even prefer to invest in the HBD
I prefer it too
This is very informative..
Thanks for the update.
#replyto5
#hive
#leo
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I won't lie, passive income beats active income everyday of the week. HBD savings is one of the best investment options for conservative and risk averse investors. I'm not one of them but I plan on utilising it early next year, hopefully the Hive price will be much higher that it is right now.
I think taking advantage of both is the way to go. To stake your HBD to receive the 20% and as well you receive around 3% with Hive.
All depends on the price of Hive as doing it now makes no sense converting Hive to HBD. I agree the 20% is great but definitely would not convert all my Hive and only a percentage. One needs to grow your Hive account so keeping stake is vital. Maybe growing HBD over a longer period is the smart way.
We all know that this is a very good platform and original content from the creators is highly appreciated. There are some people who want to take risk in their life and some people who don't want to take risk at all. People don't want to take it they keep all their money inside HBD because it is stable coin as we all know. The best part is that there is a good apr on top of it too.