Direct from the desk of Dane Williams.
The move to now offer a 20% APR on HBD is a game changer for algorithmic stablecoins.
Did you see the news that Hive Backed Dollars (HBD) now pays 20% APR simply for holding the stablecoin in the savings section of your Hive account?
Yep, you can now earn a whopping 20% APR simply for holding Hive’s own stablecoin within an account you own the keys to.
No third party platforms, no payments in dodgy DeFi coins, just a 20% return on your savings, paid out in HBD.
Huge.
As things stand, this cements HBD’s place amongst the best algorithmic stablecoins in the entire crypto market.
Sleep on the price of HIVE at your own peril
In the aftermath of the announcement, one point of conversation that has come up is what this means for the price of HIVE and why anyone would now choose to power up HIVE over simply pocketing the stable returns?
These questions around the price of HIVE are completely valid and on the surface they may seem to make sense.
But dig a little deeper and you’ll quickly discover that not only do I expect the price of HIVE to hold its own, I actually expect it to make Hive Power holders rich.
Here’s why.
While HBD’s 20% APR is higher than the 13ish% that you can get via inflation and curation rewards in HIVE, you miss out on one key aspect.
That being any potential increase in the price of HIVE.
Ask yourself this.
Do you believe that the price of HIVE will appreciate faster than 20% per year?
Well, it certainly did over the last 12 months:
Yep, that’s a lazy 5x in price from the bottom to now.
While your blogging feed may be clogged with bearish sentiment due to the fact that price has pulled back from its $3 all time high, the reality is that HIVE is still 5x from its yearly bottom.
All I can say here is sleep on the price of HIVE at your own peril.
If HIVE went just another 5x to $5, it still wouldn’t have anything close to the market cap required to crack the top 20.
When you consider the absolute centralised, VC-controlled, shitcoin dross that makes up pretty much every position from 10-100, then you can see the potential we’re sitting on with HIVE.
A token that offers holders not only the ability to transact on a Web3 account they own, but also a say in governance of the blockchain itself.
And this doesn’t even take into account the technical mechanism behind how HBD is created and why the move to 20% is sustainable.
The demand for HIVE itself is not going anywhere.
Final thoughts on HBD now offering 20% APR
I’m still firmly of the belief that the only way to mitigate stablecoin risk is to shift your investment and usage focus away from those projects employing a collateralised business model.
Algorithmic stablecoins are the only way forward and running on the base layer of the decentralised Hive blockchain makes HBD a prime option.
With the wider crypto community going absolutely gaga over Terra Luna’s so called foundation buying up an absolute boatload of Bitcoin to help UST keep its peg during times of high market volatility, I find myself being pushed away.
If you have a centralised company… oh sorry, foundation in charge of ‘stabilising’ your so called algorithmic stablecoin, then you may as well be in USDT.
At least Tether tells you they back their coins 1:1, lulz.
As the only algorithmic stablecoin that runs on the base layer of a truly decentralised blockchain, Hive Backed Dollars and HIVE itself are primed for a massive 2022.
Best of probabilities to you.