Let’s take a look at the HIVE tokenomics for October 2023.
The projected inflation for Hive for 2023 is 6.5% on a yearly basis, or 0.55% on a monthly basis.
Hive has a double currency system, HIVE and HBD, with conversions between them that add or remove HIVE from circulation on top of the regular inflation. Furthermore, the decentralized hive fund DHF, that serves as a DAO converts the HIVE that is in the DHF.
The @hbdstabilizer has also grown and it is playing an important role in the overall tokenomics, making conversions and trading on the internal market.
Because of this additional mechanics the HIVE inflation and supply can be drastically different in real time than the regular/projected one.
To be able to follow the HIVE supply we need to take a look at all the different ways HIVE is created, author, curation, witness rewards, conversions etc, then net that out with the HIVE burned from conversions, accounts fees, null transfers etc. To get the virtual supply we need to do the same for the HBD supply as well.
HIVE Created
Here is the chart.
The chart above includes:
- Author rewards
- Curation rewards
- Witness rewards
- Staking rewards
These are the regular ways new Hive enters circulation, and all of them are through vested HIVE, aka powered up. You can notice the slight fluctuations in the daily amounts that is connected with the virtual hive supply, or the base for the inflation. When the price of HIVE is low, the virtual hive supply increases, and when it is up, the virtual hive supply decreases.
The thing is the conversions are playing a major role in the ecosystem. Here is the chart again, including conversions.
We can notice that the HBD to HIVE conversions are the dominant in the chart. This works in both ways and a big part of them is converted back to HIVE, especially through the work of the stabilizer.
The regular inflation is around 70k HIVE per day. On the other hand, the conversions averaged around 113k per day, although as noted a lot of them are converted back to HBD.
We can notice the drop in recent months. This is because the stabilizer has changed its funding from the DHF and has reduced the daily amount of funds it receives and sends them back to the DHF.
HIVE Removed from Circulation
Here is the chart.
The above takes into consideration six different ways of HIVE removed:
- Ninja Mined HIVE To HBD Conversions In DHF
- HIVE transfers to DHF and converted to HBD
- Transfers to null
- Null as post beneficiary
- New accounts creation fee
- HIVE to HBD conversions
The HIVE transfers to the DHF are now dominant. These are transfers made by the stabilizer. We can see a few spikes in the HIVE to HBD conversions (blue) in 2023. These were due to the increase in the HBD price. We can also notice the drop in recent months, same as the opposite conversions due to the low volumes that the stabilizer is doing.
Historical HIVE Supply
When all the above is added and removed, we get this chart for the all-time HIVE supply.
Up until August 2021, the supply was almost steadily increasing with a small fluctuation. Then a drop in the supply in September 2021. Since then, from time to time we can see some drops in the supply with the recent happening in February and April 2023. October ended with 414M HIVE in circulation.
HBD Supply
Here is the chart for the HBD supply.
The light color is HBD in the DHF. The HBD in the DHF is not freely circulating HBD and only enters circulation when payouts to the DHF workers are made.
HBD is being created and removed in various ways, but the conversions play the major role here in both directions. Other ways HBD is created are DHF proposal payouts, author rewards and interest.
We can see that after a downtrend in 2022, in 2023 there was an increase in the HBD supply in February, a small decrease in March and again a small increase in April.
In the last months the HBD supply has been constant! At the beginning of the month there was 10.9M HBD in circulation and the month ended with around the same number.
Virtual HIVE Supply
When we add the HIVE equivalent supply from the HBD to the HIVE supply we get the chart below.
When we zoom in 2022 - 2023 we get this:
The light color is HIVE that in theory can be converted from HBD at the current market prices for HIVE.
We can see that the virtual supply fluctuates a lot, mostly because it is tied to the price of HIVE. As the price of HIVE drops, the virtual supply increases and the opposite.
In 2022 the virtual supply has increased because of the drop in the HIVE price. In the last month we have had a small decrease in the virtual supply to due the uptrend of the HIVE price.
Projected VS Realized HIVE Inflation in 2023
This chart is telling the story of the new HIVE entering circulation in 2023.
There was a downtrend from the beginning of the year, up to March, when HIVE was deflationary, but since then the supply kept growing, with some small drops, and we are now almost at the same level as projected and realized.
A cumulative 19M HIVE added in 2023, while the projected one is around 20M new HIVE added up to October. There is two more months of the year now, and 2023 is shaping up to be a year where the realized inflation is close to the projected one.
Monthly Inflation
If we plot the monthly inflation in 2023, we get this.
2023 has been interesting. January had a small positive inflation, February a negative one, that was offset by the positive inflation in March, April is almost at zero.
For October the realized inflation is 0.61%.
In terms of absolute numbers, the HIVE supply in September has increased from 408.2M to 411.9M, adding 3.7M HIVE in circulation. For comparison the projected monthly inflation is around 2.2M HIVE.
Yearly Inflation
The yearly, projected and realized inflation looks like this.
Hive is still below the projected line for inflation in 2023, but only by a small margin.
In the first nine months of the year, Hive is on the way to end the year with around 5.8%, that is below the projected 6.5%. We are now entering the final months of the year, and there is a big probability the numbers will be similar like the above.
Net HIVE Created by Category in October 2023
Here is the new HIVE put in circulation by category for the month.
The curation rewards are on the top with 900k HIVE. Conversions are in the middle with 300k HIVE created in the month. It’s the conversions that are changing each month and that can swing inflation in positive or negative. In the past month they are neutral.
All the best
@dalz