This is a report for the Hive supply and inflation for January 2022. Tracking the HIVE supply has always been challenging and this monthly post aims to provide an overview of the flow of inflation, conversions etc.
Let’s take a look!
Hive has its regular inflation that follows the following formula
Hive inflation = (978 - (head_block_number / 250000)) / 100
It also gets rounded up at 0.5. At the moment the regular Hive inflation is 7.5%.
The thing is Hive has a double currency system, HIVE and HBD and there are conversions between them that add or remove HIVE from circulation on top of the regular inflation. Furthermore, there is HIVE in the DHF that is slowly being converted to HBD and also HIVE sent to the DHF is also converted to HBD. Because of this additional mechanics the HIVE inflation and supply can be drastically different in real time then the regular one.
To be able to follow the HIVE supply we need the following.
HIVE Created:
- Author rewards
- Curation rewards
- Witness rewards
- Staking rewards
- HIVE from HBD Conversions
HIVE Removed:
- HIVE to HBD conversions
- 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
Next the HBD.
HBD Created:
- 10% share of the inflation to the DHF
- HBD Author Rewards
- Interest payouts
- HIVE to HBD Conversions
- Ninja Mined HIVE To HBD Conversions In DHF
- HIVE transfers to DHF and converted to HBD
HBD Removed:
- HBD to HIVE Conversions
- Transfers to null + null as post beneficiary
When all the above is sums up, we will get all the differences between them and how much HIVE and HBD was created or removed in a certain time frame.
With this said let’s take a look at the charts.
The period that we will be looking at starting from 2021 to January 2022.
HIVE Created From Regular Inflation
First the chart for the regular inflation for HIVE.
- Author rewards
- Curation Rewards
- Witness Rewards
- Staking Rewards
These are the regular ways HIVE is created without the conversions. All the above are paid as Hive Power or VESTS, except in a case where the HBD debt is high and post start receiving liquid HIVE instead of HBD.
As we can see this type of inflation is around 56k HIVE per day. It has been slowly decreasing in 2021. The few spikes that we can see in July and then in October is where there were liquid HIVE payouts to posts because of the high debt for HBD.
The curation rewards take the biggest share of this type of inflation.
A total of 1.7M HIVE was created from the regular in January 2022.
HIVE Created From Conversions
When we add the conversions from HBD to HIVE on the chart above we get this.
We can notice that the conversions are quite volatile with big swings happening at occasions. HBD to HIVE conversions are happening when the price of HBD is bellow the peg, bellow one dollar. When this happens if you convert HBD to HIVE the blockchain will still give you HIVE for the value of HBD of one dollar, does making conversions profitable to external markets.
In the last year the @hbdstabilizer has taken on the role of stabilizing HBD and a large share of the conversions are made from this account, but there are other accounts doing it as well.
A total of 4.48M HIVE was created from the conversions in January 2022.
Cumulative from regular inflation and conversions a total of 6.2M HIVE was created in January 2022.
HIVE Removed From Circulation
Here is the chart for HIVE removed in January 2022.
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
As we can see the conversions from HIVE to HBD that happened at the end of August and begging of September have impacted the chart heavily. On a few occasions there was 2M HIVE converted to HBD in one day.
Cumulative a total of 2.85M HIVE was removed in January 2022.
Now let’s take a look at HBD.
HBD Created
Here it the chart.
The above is a chart for HBD created without the conversions. It includes to following.
- 10% share of the inflation to the DHF
- HBD Author Rewards
- Interest payouts
- HIVE to HBD conversions
- Ninja Mined HIVE To HBD Conversions In DHF
- HIVE transfers to DHF and converted to HBD
Here again we can see that the conversions are dominant when it comes to adding a new supply of HBD. The August and July period is when a lot of HBD was created. Around 17M HBD was created in this period. The ninja mined HIVE conversions are also adding significant amounts of HBD in the DHF. Note that the HBD in the DHF doesn’t count as debt.
A total of 4M HBD was created in January 2022, most of it from HIVE transfers to the DHF (2M) and from the ninja mine conversions in the DHF (1.2M).
HBD Removed
Now let’s take a look at HBD removed. Here is the chart.
HBD is mainly removed when converted to HIVE, but also with transfer to @null and setting null as beneficiary on posts rewards.
HBD is being converted to HIVE when the price is bellow the peg. We can see that in the last period there is a lot of HBD conversions. Since there was a correction in the overall crypto market in January 2022, HBD dropped bellow the peg at one point and there were conversions to HIVE.
A total of 5.15M HBD was removed in January 2022, most of it from HIVE conversions.
HIVE Supply In 2021
When all the above is added and removed we get this chart for the HIVE supply.
As mentioned Hive ended 2021 deflationary with -2.7%. At the start of 2021 there was around 380M HIVE and at the end of 2021 369M.
At the end of January 2022 there is 373M HIVE in circulation (still lower then January 2021 :)).
Up until August, the supply was almost constant with a small fluctuation. Then a huge drop in the supply in August and September, from 384M to 357M. An increase since then and now we are around 373M HIVE in circulation.
HBD Supply
Here is the chart for the HBD supply.
HBD supply has expanded quite a bit 2021. Started with around 5M HBD and now there is 23.6M. It was almost 29M back in September. The expansion of the HBD supply is because of the HIVE to HBD conversions, and we can see that a lot of those were happening at the end of August and begging of September.
In January the supply of HBD decreased for -1.15M. As mentioned it was most because of the conversions to HIVE.
Out of the 23.6M HBD, around half of the supply, 12M is the DHF.
Virtual HIVE Supply In 2021
When we add the HIVE equivalent supply from the HBD in circulation to the HIVE supply we get the chart bellow.
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 quite a lot, mostly because it is tied to the price of HIVE. As the price of HIVE increases, the virtual supply decreases and the opposite.
Since the price of HIVE dropped in January as the overall market we can see that the overall virtual supply has increased. The virtual supply was around 370M at the beginning of the month and now is around 400M.
I personally don’t like the parameter for the virtual supply, since it is directly dependent on the HIVE price and can be volatile.
The standard HIVE supply is my preferable metric, and we can see that it has increased for 3.55M in January 2022, while the HBD supply dropped for 1.15M.
Supply Summary
Here is the new HIVE put in circulation by category.
| HIVE Created: | Jan 2022 |
|---|---|
| Author rewards | 321,661 |
| Curation rewards | 789,240 |
| Witness rewards | 242,799 |
| Staking rewards | 372,658 |
| HIVE from HBD Conversions | 4,481,787 |
| Total | 6,208,144 |
| HIVE Removed: | Jan 2022 |
|---|---|
| HIVE to HBD conversions | 33,732 |
| Ninja Mined HIVE To HBD Conversions In DHF | 1,026,985 |
| HIVE transfers to DHF and converted to HBD | 1,790,388 |
| Transfers to null + null as beneficiary | 1,002 |
| New accounts creation fee | 624 |
| Total | 2,852,731 |
Net HIVE created in January 2022 3,355,412.
| Date | Hive Supply |
|---|---|
| 1-Jan-22 | 369,874,121 |
| 31-Jan-22 | 373,229,533 |
All the best
@dalz