This is a report for the Hive supply and inflation for October 2022.
October has been bearish for the crypto market with prices going down, as it’s been for most of the 2022. HIVE has dropped from 0.55 to 0.48, while HBD has been stable throughout the month with no moves on the upside or the downside.
Let’s take a look at the data!
The projected inflation for 2022 is around 7% on a yearly basis, or 0.58% on a monthly basis.
The thing is 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 removes the HIVE in the 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 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.
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. Thing is this work 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 60k HIVE per day. In September there was on average around 360k HIVE per day from HBD conversions, although as noted most of them are converted back to HBD.
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 back in August and one smaller one in September. These were due to the increase in the HBD price.
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 huge drop in the supply in August and September 2021.
In the last months we have seen some small drops in the supply again, because of the HBD price increases.
HBD Supply
Here is the chart for the HBD supply.
The light color is HBD in the DHF. This is not freely circulating HBD and only enters circulation when payouts to the DHF workers are made.
HBD is being created and removed in a various ways, but the conversions play the major role here in the both directions. Other ways HBD is created is DHF proposal payouts, author rewards and interest.
Overall, the HBD supply has went down in 2022, with some spikes in August when the HBD price increased. We are seeing a slight increase in the last weeks as well.
At the beginning of the year there was more than 14M HBD in circulation and now we are at 9.6M.
In the last month the supply of HBD (excluding the DHF), increased for around **0.5M. This comes after the last Hardfork where the debt limit was increased from 10% to 30% allowing more HBD in circulation.
Virtual HIVE Supply
When we add the HIVE equivalent supply from the HBD to the HIVE supply we get the chart bellow.
When we zoom in 2022 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 increases, the virtual supply decreases and the opposite.
At the beginning of the year there was around 370M HIVE in circulation, while we are now at 388M.
Monthly Inflation
If we plot the monthly inflation, we get this.
The red is the HIVE only inflation, the light white VIRTUAL HIVE inflation.
The monthly inflation in October is 0.22%!
The projected monthly inflation is around 0.58%, meaning that the realized inflation for October is bellow the projected one.
In terms of absolute numbers the HIVE supply has increased from 387.9M at the beginning of the month to 388.8M now, or a 0.8M HIVE inflation.
The highest the monthly inflation has been in 2022 is in June with 0.95%, and on the low side it has reached negative -0.29% in July. A reminder that these are monthly numbers, to get the yearly equivalent just multiply *12.
The yearly inflation, projected and realized looks like this.
Quite the differences in the past years between projected and realized inflation. Again mainly because of the HBD conversions. In 2019 and 2020 we can see that the realized is quite above the projected, while in 2021 the inflation is negative -2.7%.
2022 is projected at around 7% (0.58% monthly). For the first ten months of the year the inflation is at 5%. If the rest of the two months are as projected the Hive inflation for 2022 will be at 6%, meaning 1% less than the projected.
Net HIVE Created By Category
Here is the new HIVE put in circulation by category in October 2022.
The curation rewards come on top in terms of HIVE created with 850k HIVE.
Conversions are negative and are the reason why the realized inflation is less than the projected one. In the last month they were positive.
Net HIVE created in October 2022 =0.8M.
All the best
@dalz