To HBD or not to HBD?

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         Folks around Hive were excited about the 20% interest rate on HBD. Why wouldn't they? It's 20% interest on a stable coin. Aside from Justin Sun's outlandish statements, this is on par with the Anchor Protocol on Terra.

         The question then becomes, would it dissuade people from holding HP? If you care about getting as much return as possible, putting your HBD into savings seems like a no-brainer.


         It's not uncommon when I leave my VP on 100%. Sometimes, I don't find anything I feel like voting on. As you can see from the screenshots above, I still managed an 8% APR despite my horrible efficiency. The APR comes to around 11% when you add the 2.85% for holding HP.

So, why HBD?

Shorter locking times

         Power-down time has always been a deterrent to powering up and powering down. It's a pain to wait 13 weeks for your money to become liquid. During that time, market sentiments could shift, and you'd miss out on trading opportunities. It's a pain to lock up your HIVE for a long time in hopes of returns. HBD from your savings only takes THREE days. Liquidity is a selling point when it comes to HBD.

Less pretend content creators/curators.

         It always bothered me that the primary way to earn on Hive was for people to pretend to be things they aren't. Namely, content creators and curators. The unfortunate result of this pigeon-holing is less than stellar content.

         These days, there are other ways to earn HIVE. An attractive interest rate is a welcome addition. For some, getting interests off of a $3000 deposit might be more lucrative than struggling for cents on stuff nobody wants to read.

         I know some whales are annoyed that they must find things to vote on, or they will lose out on APR. A decent interest rate is a viable alternative to not wanting to deal with people judging how you vote. Then again, why are they here to be antisocial in the first place?

So, why not HBD?

Governance

         For most people, governance has never crossed their minds. Reason? Most of their votes will never matter. Their stakes are too small for either witnesses or proposals. For orcas and whales, having a say in governance is the price they will pay for the theoretical lesser returns by holding HP. But, that's not always true.

HIVE is speculative

         The price of HIVE can vary much more than HBD (usually). An 8-10% return on HIVE earned through HP at a lower price could mean higher returns when it hits $3+. The same does not apply to HBD. So, while the 20% interest may look huge, it may not pan out when HIVE pumps.

Consensus witnesses set the interest rate.

         Technically, that is a central point of failure. The witnesses can decide that a lower or higher rate is warranted. If you put all your eggs in one basket, you may run into situations where you are screwed over. It might be better to diversify your holdings.

Miscellaneous stuff

         One of the counterarguments against downvotes has been that it costs the downvoter nothing. Well, one could say it does cost something now. That something is the APR under certain market conditions. The person holding HP is sacrificing returns when they could have profited with higher interest.

         I highly doubt the interest rate will cause a drastic decline in HP holding and cause security concerns for the chain. I guess we will have to see the effects thereof in the long term.

The verdict?

         I wouldn't mind putting my HP into HBD when I feel like I no longer want anything to do with content creation, antiabuse, etc. Under the current prices, a $20K deposit would yield over $300 every 30 days. That's more than what I pull in for posting every month. With my luck, I probably won't get $20K for my HP if I start powering down now.

         I have set very specific conditions before that would happen. You'll know when it happens. I love you degens even though I'm too ashamed to admit it to loved ones.

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pixresteemer_incognito_angel_mini.png
Bang, I did it again... I just rehived your post!
Week 102 of my contest just started...you can now check the winners of the previous week!
!BEER
7

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he called us degens, awww. That's true love right there :))))

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TOO HBD IT ALLLLLLL

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Aye, there's the rub.

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The question then becomes, would it dissuade people from holding HP? If you care about getting as much return as possible, putting your HBD into savings seems like a no-brainer.

I did think about this aswell.

But someone said "You cant downvote with hbd" :p

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I asked myself similar questions. Finally, I decided to keep my HP as it allows me also to "say hi" to other content creators, and to have a small (really a small one) word in governance.

Cheers!

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It is kinda nice to be able to give out some rewards.

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Its all really nice.

governance, big returns, diversifying etc etc.

Just keep stacking.

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And there's also the upside of HIVE. Call me starry-eyed and naive, I think HIVE has great potential - if only we could get our act together and do some effective marketing. Then there's nothing staying in the way of HIVE getting to $10, to $40, to $80 ... HBD can't do that

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(Edited)

I agree, but this is not the purpose of HBD either.

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Absolutely, here it was about comparing the merits of keeping "value" in HBD versus keeping it in HIVE

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This was a really interesting read and well written.

It always bothered me that the primary way to earn on Hive was for people to pretend to be things they aren't.

This is something I find disappointing, since I look for authenticity. The point about that though, it's not jut a Hive thing, it's how this whole world operates.

With regard to HBD/Hive, my own approach is to have both, diversifying is always an effective strategy, imo.

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Diversifying may not bring you the highest returns, but you can’t lose with that approach, usually.

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I agree. There are never guarantees about anything in life, so that's always a factor.

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It sounds like a good case for both HP and HBD

think i will split the investment 50/50 so it the best of both worlds :)

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I think HBD is a great option when you do decide to stop curating content. I have to admit most people on Hive are degens and we are just taking the 20% APR we can get off the savings.

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That time will come. It’s a matter of when.

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I suppose that many "old" Hivers have the same dilemma as you... To HBD, or not? For those who are here for the short term, and newbies in crypto, there are no doubts at all... You have pointed out some valid reasons for both arguments...

Just today, I have bumped up on a post where the author was elaborating on how to "get rich with HBD", but he didn't buy me at all... The main question is: Did you get rich by accumulating USD/EUR or any other fiat currency? If yes, then you should go all in HBD, if not, you can split and diversify your crypto portfolio...

Yes, 20% per year is great, but... HIVE price can go easily 20% in a couple of days and STAY there, but it can down too... that's true... Imagine that you buy HBD instead of HIVE when HIVE was 0.15$... Would you have more USD today? :)

I wouldn't pick sides here but go into both...

I have picked this post on behalf of the @OurPick project and it will be highlighted in the next post!

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A volatile market definitely makes it a bit harder to go all in one or the other.

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Look at me! Look at me!

I bought some of my hive at 0.13USD and I was NERVOUS about it. Now I know it was a no - brainer.

Wherever people invest HBD HIVE POWER HIVE, just come here and HODL, its a good place to be.

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I will get 50/50 from my author rewards and will put the liquid in HBD.

I have my money where my mouth is.

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The unfortunate result of this pigeon-holing is less than stellar content.

You are talking about me aren't you? :) When they bumped the savings number up to 10%, I decided to start putting away enough HBD from my posts so that I could earn one HBD per day. I was on my way there and then they bumped it up to 12%. Very cool. Then when they moved it to 20%, I am well over my goal. For me as long as HBD is lower than Hive, it never made sense to convert it anyway. Only when Hive was lower than HBD did I ever make some trades.

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It’s good for people like us that’s for sure.

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Damn!! This is an absolute and raw fact right here, besides, the sooner one understands the rule of the game, the better for the players in it.

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Listing out the pros and cons is helpful in my experience.

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It always bothered me that the primary way to earn on Hive was for people to pretend to be things they aren't. Namely, content creators and curators. The unfortunate result of this pigeon-holing is less than stellar content.

Truth, written directly and with eloquence!

Its like Amway and other MLM schemes where you pay inflated prices for very ordinary product and its the commissions ('curation') that matter.

Have a great weekend :-)

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except that with amway, you can't buy your next bottle of shampoo with the bottle of shampoo you bought two years ago.

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I would say yes, and no, but neither at 100%. That's basically the same rule of thumb I apply to all cryptopportunities in general: diversify instead of maximize. Sure the 20% on HBD does look attractive, but no way I'm going to power down my HP I've accumulated over the years for it. In fact, I don't even spend my liquid HIVE on it, which I'd much rather keep as SWAP.HIVE in my HiveEngine. That's for when other "incredible opportunities" present themselves. However, just by doing my usual thing on Hive (such as writing this comment) I'll have HBD coming in, so why not put all of that into savings?

BTW, what I believe is a potential killer of quality is the need to earn. That's to say, relying on Hive as a source of income. I keep reading of people posting proudly about paying rent with their earnings from blockchain blogging, and as amazing as it sounds, I'm glad I don't have to! Otherwise I'd really be stressing about maximizing my earnings from curation (rather than just voting for what I like, when I like), or making posts (what am I going to post about today? That it's raining? That I walked a thousand steps? Or simply a bunch of links with a stolen meme?) This way there is no pressure, my interaction remains authentic (or so I try), my content interesting (I really hope), and my earnings still constant (acceptably so).

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You are absolutely right about the "need" to earn.

I do Hive like a hobby and it's nice to see I have a productive pastime that earns me some extra crypto. There's no mid to long-term plan to cash out as of now. What I take out here is usually for rebalancing my overall portfolio.

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Ditto to that. They say you should take your profits, and I do agree mostly. Though unlike BTC, it's not like I've ever invested into HIVE. Close to five years of blogging, voting, commenting, and later also dabbling in DeFi things, that's where my earnings on this chain came from. Comparatively, it's a lot more than what BTC brought me, especially compared to losses due to trading for shitcoins, etc. So while I do have a plan to take my profits once BTC makes it to a certain level (just to get back what I'd put in), with HIVE I have no such intentions. Instead, I want to diversify more, in the various branches growing out of this very blockchain.

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The replacement costs of selling hive now will be difficult to overcome in the future, so I am hodling.

I should've bought more when it was dime.

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Right!

I'll sell that liquid hive, etc. But my Hive Power - diamond hands my buddy. Diamond hands.

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You are citing the old versus the new in cryptocurrency.

For the most part everything was (and still is) speculation. Buy at a price, token go up. That was the mindset.

Now we are seeing people talking about yield and return. Obviously, speculation is still a part of the process, hence why companies like Tesla and Amazon still have buyers of the stock. But it is always smart to have part of the portfolio earning yield.

I guess the breakthrough is there is the option so that the question posed is relevant. To me, those with a long view cannot go wrong with putting some of their money into HBD and earning 20%. While the Witness can change it at anytime, it is there now.

So unless something else with a better return and in line with the risk proposition shows up, not a bad choice.

Aside from Justin Sun's outlandish statements,

They do seem to go together.

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I started locking my HBD up when it was 10% interest rate - now that its 20, I really aren't taking my money anywhere else.

Let's see how long we can take advantage of this for.

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I think I will stop powering up to stash my HBD instead.
These days, I don't have time to blog and I barely have time to vote, which is unfortunate considering my whopping 600HP and the resulting tidal wave splash my VP creates.

Also, I'm trying to make a small direct investment but there is a stupid travel rule that made me wait 10 days to get FIAT and in the meantime I found some other tempting things to buy. Ex. New iPhone for wifes B-day or some HBD investment?

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I'm almost at where you are, kinda don't have time to post stuff.

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I do recommend that you use something like hive.vote and follow a curation trail like @leo.voter and set your max Upvote Mana threshold to something like 80% - 90%. At least when you are busy you are still earning curation which increases your APY for earning more HP. And when you do have time you can still vote manually as it would not exhaust your entire Voting power. ( just my two cents ).

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I do use Hive.Vote. But, there are only a small number of entities I feel comfortable of following.

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Probably a mix of both depending on your risk tolerance and goals I would say.

!PIZZA

!LUV

!LOLZ

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