How Much Is The Additional HIVE Inflation From The 20% HBD Interest?

I keep seeing this discussion around Hive, is it sustainable is it not, and here is a short answer.

There is around 3M HBD in savings that are receiving 20% interest. This is around 600k HBD per year.
How much will this be in HIVE depends a lot on the HIVE price. If the HIVE price is on average 0.5$ for the year, than it is 1.2M HIVE equivalent, if it is 1$, its 600k HIVE equivalent, and if the HIVE price is 0.2$ then it is 3M HIVE equivalent.

I'm using the wording HIVE equivalent because it is unknown how much of that HBD will end up as HIVE, how much will stay as HBD, what will be the actual price of conversions etc. Its basically adding to the virtual hive supply.

At 0.5$ per HIVE, 3M in savings and 20% interest rate, there will be additional 1.2M HIVE equivalent created on a yearly basis. The current HIVE inflation in absolute numbers is 25M HIVE per year.

In percent terms its additional 0.3% on top of the regular inflation. If the regular inflation for HIVE on a yearly basis is 7%, this will increase it to 7.3%. If the price of HIVE drops in half, the the impact will be x2, but at this point the amount of HBD in the savings will most likely decrease as well.

As we can see the HBD interest still has a limited impact on the inflation. The HBD supply remains low and so does the amounts in the savings. Things can change if the HBD supply and HBD in the savings increases a lot and the HIVE price remains the same or decreases. But this is quite unlikely scenario, because if the HBD supply is set to grow fast it can only come from conversions and this will push the HIVE price as well.

I did a long post on the topic when the 20% APR was introduced, will revisit it soon with realized numbers in the first few months and a more accurate projection for the year.