This is a report for the Hive inflation for November 2021. 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 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. Further more 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.
HIVE Created From Regular Inflation in 2021
First the chart for the regular inflation for HIVE in 2021.
- 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 60k HIVE per day and 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 20M HIVE in 2021 was created from the inflation above, out of which 1.8M in November 2021.
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.
In 2021 a total of 20M HIVE was created from conversions out of which 8M HIVE in November 2021.
Cumulative from regular inflation and conversions a total of 40M HIVE was created in 2021, out of which 10M in November 2021.
HIVE Removed From Circulation In 2021
Here is the chart.
The above takes into consideration five 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
As we can see the conversions of the HIVE in the DHF (blue color) are happening constantly with a slow decline over time. At the beginning of the year there was around 40k HIVE per day converted in this way and now there is around 34k HIVE.
The other big category is HIVE sent to the DHF (orange color). This is mostly being done by the hbdstabilizer and it is happening in conditions when HBD is above the peg and the stabilizer is selling HBD for HIVE on the internal market and then sent the HIVE to the DHF where it instantly converted to HBD.
Another interesting thing are the account creations fee, the light blue, we can see those happening from august. This is mostly because of Splinterlands.
The above chart doesn’t include the regular HIVE to HBD conversion. If we add those, we get this.
As we can see this conversion distort the chart a lot. There were massive amounts of HIVE being converted to HBD from the middle of August to mid September 2021. There was a spike in the price of HBD in the period that caused a lot of HIVE to be converted to HBD. In these 30 days, around 30M HIVE were converted to HBD.
Cumulative a total of 52M HIVE was removed in 2021, out of which 2.5M in November 2021.
Now let’s take a look at HBD.
HBD Created In 2021
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
This chart follows the HIVE price. As the HIVE prices increases so does the printing HBD to the DHF and to author rewards. We can notice that the author rewards are a bit higher then the DHF inflation. The interest payouts to HBD holders are quite small. Before the HF in July interest was paid to all HBD holders, and now to HBD holders that have moved HBD to savings only. Some of the spikes in the interest payouts are because big accounts claim the interest on that day.
When we include the conversions, we get this.
The above chart includes the following conversions:
- HIVE to HBD Conversions
- Ninja Mined HIVE To HBD Conversions In DHF
- HIVE transfers to DHF and converted to HBD
We can see here that conversions are quite significance in the period of mid August to mid September. Around 17M HBD was created in this period. The ninja mined HIVE conversions are also adding significant amounts of HBD in the DHF, especially with a high HIVE price. Note that the HBD in the DHF doesn’t count as debt.
HBD Removed in 2021
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. Even with this conversions and the hbdstabilizers constantly selling HIVE for HBD (buying HBD 😊) on the internal market, the HIVE price keeps increasing. These conversions follow after the huge conversions in the opposite direction in august and September. There is a possibility that a balance will be find soon.
HIVE Supply In 2021
When all the above is added and removed we get this chart for the HIVE supply in 2021.
Overall, the HIVE supply in 2021 is deflationary!
At the beginning of the year there was around 380M of HIVE in circulation and now there is 368M. A reduction of 12M.
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 368M HIVE in circulation.
HBD Supply In 2021
Here is the chart for the HBD supply.
Well, the HBD supply has expanded quite a bit 2021. Started with around 5M HBD and now there is 23M. 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 the last month we have seen a reduction in the HBD supply.
Will see how it goes from here, but if the price of HBD increase above one dollar we can see more expansion of the HBD supply and contraction on the HIVE side.
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. Notice the sharp reduction in the last days.
Supply Summary
Here are the numbers in summary for the month a
HIVE Created:
| Nov-21 | 2021 | |
|---|---|---|
| Author rewards | 332,034 | 4,298,072 |
| Curation rewards | 787,658 | 8,945,828 |
| Witness rewards | 235,912 | 2,789,012 |
| Staking rewards | 352,072 | 3,906,523 |
| HIVE from HBD Conversions | 5,546,641 | 20,517,546 |
| Total | 7,254,317 | 40,456,979 |
HIVE Removed:
| Nov-21 | 2021 | |
|---|---|---|
| HIVE to HBD conversions | 27,702 | 24,741,067 |
| Ninja Mined HIVE To HBD Conversions In DHF | 1,024,900 | 12,325,995 |
| HIVE transfers to DHF and converted to HBD | 1,400,577 | 13,535,157 |
| Transfers to null + null as beneficiary | 1,148 | 201,907 |
| New accounts creation fee | 1,350 | 1,946,832 |
| Total | 2,455,676 | 52,750,959 |
HBD Created:
| Nov-21 | 2021 | |
|---|---|---|
| HBD Author Rewards | 323,634 | 1,829,817 |
| 10% share of the inflation to the DHF | 255,135 | 1,381,524 |
| Interest payouts | 10,932 | 101,855 |
| HIVE to HBD Conversions | 28,087 | 14,181,255 |
| HIVE transfers to DHF and converted to HBD | 1,350,076 | 7,290,717 |
| Ninja Mined HIVE To HBD Conversions In DHF | 1,131,398 | 6,133,665 |
| Total | 3,099,263 | 30,918,833 |
HBD Removed:
| Nov-21 | 2021 | |
|---|---|---|
| HBD to HIVE Conversions | 4,892,674 | 12,127,252 |
| Transfers to null + null beneficiaries | 436 | 2,515 |
| Total | 4,893,110 | 12,129,768 |
Monthly and yearly balance
Here are the numbers for HIVE, HBD and virtual HIVE added/removed in November and for the whole year of 2021.
| November | 2021 | |
|---|---|---|
| Net HIVE Created | 4,798,641 | -12,293,979 |
| Net HBD Created | -1,793,847 | 18,789,066 |
| Virtual HIVE Created | -18,817,829 | -47,395,233 |
And the balance of HIVE, HBD and virtual HIVE on Jan 1, Nov 1, Nov 30, 2021.
| Jan-01 | Nov-01 | Nov-30 | |
|---|---|---|---|
| HIVE Supply | 380,208,202 | 363,151,359 | 367,950,000 |
| HBD Supply | 4,993,134 | 25,479,847 | 23,686,000 |
| Virtual HIVE Supply | 424,395,233 | 395,817,829 | 377,000,000 |
Note some of the numbers might not be 100% accurate due to the conversions differences.
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 decreased for 12M in 2021, while adding a 4.7M in November 2021. The HBD supply has expanded in 2021 from 5M to 23M at the moment. In November the HBD supply was reduced for 1.7M. But even with increased HBD supply, the virtual HIVE supply has dropped drastically in the year with 47M less on ayearly basis, and 18M on a monthly basis for November. This is because of the increase of the HIVE price.
All the best
@dalz