A couple of weeks ago, I wrote a post on the decreasing HIVE supply, which is being affected by Smooth's proposals that are using the inflated value of HBD from the Hive Development Fund (HDF) and using it to buy and lock up HIVE back into the fund, effectively lowering the supply. Where the turn started to happen was around the 30th of March
30.3
3.4
17.4
As you can see, over the last 18 days, there has been a 600,000 HIVE decrease in the supply, which means that over that time, it is currently reducing at an average of 33.3K HIVE daily. That is quite an incredible amount, considering that if it was to continue at this rate (unlikely) 12.1 million HIVE would be removed from the supply over the course of a year, which would effectively cut around 50% of the entire year's reward pool out of the supply, or a full 3% out of the entire supply - That is an incredible amount.
What you will also notice is that there is a massive increase in the supple of HBD, where over 1.5 million HBD has flooded into the market place. Once Hardfork25 drops in approximately a couple months, the hope is that the new HBD peg will become far less volatile and will sit between the 1.00 and 1.05. Because of the potential stability and the change that is likely to offer a decent APR on HBD in the savings wallet, the demand for it might skyrocket, as people will be able to buy and earn a ROI similar to curation returns, without having to worry about locking the stake up, as there is only a 3-day unlocking period on the wallets. I suspect that later, this will also be applied to the HIVE savings wallet if this ends up being successful.
This change ultimately affects the entire dynamics of the platform, as it adds a usecase for HBD as an earning mechanism and if it does happen to hold its peg suitably, additional usecases as a stable coin are also introduced, something that wasn't possible due to volatility before. One of these uses would be the ability to trade effectively between HBD and HIVE on platform in the ups and downs, which could effectively keep more HIVE on the platform, just like the stables on exchanges allow people to secure gains in the downward market, without moving into fiat.
Changing the mechanisms of the Hive economy sets up a lot of complexities, where for example there will be people who are willing to buy HBD for a 10-20% yearly return, and others who will buy HIVE POWER for about the same through curation activities and return. The difference of course is that if HBD remains stable, that 10-205 is the total potential, but if HIVE gets market attention, the upside ceiling is an unknown.
- Assuming one dollar HBD: 1000 HBD @ 20% will attract another 200 HBD for a total of 1200 worth.
- 1000 dollars worth of HIVE however could attract 200 more HIVE to it, but the value of it is an unknown. If that HIVE was bought at 10 cents, it cost 100 dollars initial investment - if the price moves to 2 dollars, the eventual value is 2400 dollars worth
These kinds of "games" in the platform make for a lot of game theory and it is going to be very interesting to see how people play it. One of the beauties of a complex economy is that there are so many variables in play that it is hard to predict what will be the best course of action, making people uncertain about which path to take. For many, what they are likely to do is diversify across a range of paths, trying to capture value at various points, but potentially missing out on the single "big win" of getting the one path correct.
The changing ecosystem of crypto in general has meant that there are far more possibilities to both win and lose in the system, but those who take a relatively even-keeled approach, are going to likely see more upside than down. Whereas in the past it was about picking the right coin, hodling and hoping it will increase in value in order to sell into something that can retain that value - the diversity of ROI and staking options means that the entire economy of crypto will start to stabilize, as the pathway becomes less clear and there will be distribution of activity.
This is the maturing of the economy, but we are still in a very immature economic toddler phase, as there isn't yet enough participants to bring true stability. Hive itself is changing a lot in regards to this,, as it is not only becoming a more complex economic unit through diversity of value streams and sinks, it is also expanding enduser potential through distribution of experience. The more mature the community as a whole becomes, the more empowered the applications that provide for them become, and the greater the potential for new applications to arrive.
A lot of people don't like this side of Hive, as they see as talking about "money" as a base trait, as if it is all that people focus on. However, each of us is effectively a participant in all economies that effect us, whether we take an active role or note. Some people will not care about these things at all and just go about their business as they have always done, some will spend a huge amount of time and effort trying to maximize their ROI - it doesn't really matter which way people choose, a movement in one area will have affects on the other and the interplay between all movements will create dynamics that will change constantly over time, as we as a community change in behaviors too.
Hardfork25 could potentially be the most important fork in the history of this blockchain, as it could very well bring a decentralized point of stability to the industry for the first time. While everyone is going to have new options available, the potential impact on the entire Hive community through these changes could be enormous.
Again and as always, it is going to be interesting to see how it all plays out.
Taraz
[ Gen1: Hive ]