Following @smooth's lead, I have updated the HBD APR for my witness to 3%. A brief explanation as to why is below. I encourage all other witnesses to do the same.
HBD Stabilization Plan
If you have not yet read @smooth's HBD stabilization plan, there is a link to it here.
The TLDR of @smooth's proposal is that when there is excess demand for HBD causing the price of HBD to go above $1.00 USD, the @hbdstabilizer account (which is funded by the Hive DAO) uses HBD from the DAO to purchase HIVE on the internal market and then send the HIVE back to the DAO to be converted into HBD.
If that seems confusing, don't worry. The important part is demand for HBD turns into buy pressure for HIVE - which is a good thing :)
HBD Interest
With the HBD stabilization mechanism in place, witnesses can use HBD APR to generate additional demand for HBD. The idea is that people will be encouraged to buy and hold HBD when looking for a "stable coin" to park their money, and the interest helps to make HBD more attractive than some of the other stable coins available on the market.
With the additional demand for HBD, this will hopefully translate into additional buy pressure for HIVE.
What Percent?
I don't think there is a perfect answer to this, although the idea is to create enough additional demand for HBD to keep continued buy pressure on HIVE. Whatever percent achieves that is what we want to aim for.
Personally I think we may eventually need to increase the percent to around 10% to compete with other DeFi coins that are offering something similar, but I am following @smooth's recommendation to start with 3% for now.
Technical Details
The blockchain sets the actual HBD interest parameter for the chain based on the median value across the 21 witnesses participating in the current block producing round. (There are 20 top witnesses + one backup witness producing blocks each round.) This means that a majority of top witnesses will need to set their HBD APR witness to 3% in order for it to take effect.
Post Rewards
The rewards for this post are set to 100% beneficiary going to the @hbdstabilizer account.
Witness Voting
I strongly encourage all HP holders to participate in our Proof-of-Stake governance model. This means either taking an active role in voting for the witnesses you think are doing the best job or delegating your witness voting power to someone you trust by setting them as your voting proxy.
If having HBD interest is important to you, I encourage you to talk to the witnesses you are voting for and suggest they update their witness parameter. You can also support the witnesses who are setting a favorable HBD interest rate by voting for them as witness.
You can vote on witnesses here:
https://peakd.com/me/witnesses
Small addition that I think might be useful: To see what percent APR a witness is voting for, press params on the top right of the witness page on PeakD. 10% is the default so if its set to that, it most likely means that the witness didn't set it(either that or they are voting for 10%).
Thanks, i hope all top witnesses will follow too. And let us see its effects.
So this hbd apr is manually set to curb the overpricing of hbd? And by updating this will regulate it?
Technically increasing the APR makes HBD more attractive to buy. The part that curbs the overpricing of HBD is the HBD Stabilization Plan that smooth is running.
Why would we want to encourage the buying preassure for HBD to increase when it is overpriced on the market? Having a positive interest rate when HBD is trading below 1 USD makes sense but not in the current market conditions.
The HBD Stabilization Plan that was recently enacted by smooth should address the overpriced HBD situation. Whenever HBD is over $1.00, the @hbdstabilizer account will purchase HIVE with HBD and then burn the HIVE. This creates buy pressure for HIVE and sell pressure for HBD.
I am aware (and very much in favor) of the hbd stabilization proposal. The proposed APR of 3% is too small to make any difference on the price action of HBD in my opinion. Down the road when the market goes south (which it will) having that extra HBD might come back to bite us in the rear. Hopefully in the future we will have multiple projects that absorbe the extra inflation by then and my concerns are rendered mute.
In fact I would go as far to say that we should make it a requisit that all projects funded by the DAO need to be a revenue streem for the DAO itself much like the HBD stabilization projects is doing. The only exception should be proposals that aim to fund fundamental development of the chain and for marketing.
An exciting experiment, so far it looks good. Thank you!
Haven't heard much from you lately, you doing ok over there?
Yes. Everything is good here. Thanks for checking in :)
I'm a little less active with Hive these days. I still "lurk" to keep up with everything and chime in from time to time, but I am not as involved as I used to be when I was a top witness. That's OK though. I see a lot of new leaders have filled the gap and are doing good things to move the project forward.
How about you?
This is the happiest I have been since the fork.
Glad to know you are still here.
Long time - seeing an update from you..All well ?
Yes, doing well. Thanks for asking :) How about you?
Full on hive - my only crypto investment - invested for 100k hive.