To HBD or not to HBD?
Folks around Hive were excited about the 20% interest rate on HBD. Why wouldn't they? It's 20% interest on a stable coin. Aside from Justin Sun's outlandish statements, this is on par with the Anchor Protocol on Terra.
The question then becomes, would it dissuade people from holding HP? If you care about getting as much return as possible, putting your HBD into savings seems like a no-brainer.
It's not uncommon when I leave my VP on 100%. Sometimes, I don't find anything I feel like voting on. As you can see from the screenshots above, I still managed an 8% APR despite my horrible efficiency. The APR comes to around 11% when you add the 2.85% for holding HP.
So, why HBD?
Shorter locking times
Power-down time has always been a deterrent to powering up and powering down. It's a pain to wait 13 weeks for your money to become liquid. During that time, market sentiments could shift, and you'd miss out on trading opportunities. It's a pain to lock up your HIVE for a long time in hopes of returns. HBD from your savings only takes THREE days. Liquidity is a selling point when it comes to HBD.
Less pretend content creators/curators.
It always bothered me that the primary way to earn on Hive was for people to pretend to be things they aren't. Namely, content creators and curators. The unfortunate result of this pigeon-holing is less than stellar content.
These days, there are other ways to earn HIVE. An attractive interest rate is a welcome addition. For some, getting interests off of a $3000 deposit might be more lucrative than struggling for cents on stuff nobody wants to read.
I know some whales are annoyed that they must find things to vote on, or they will lose out on APR. A decent interest rate is a viable alternative to not wanting to deal with people judging how you vote. Then again, why are they here to be antisocial in the first place?
So, why not HBD?
Governance
For most people, governance has never crossed their minds. Reason? Most of their votes will never matter. Their stakes are too small for either witnesses or proposals. For orcas and whales, having a say in governance is the price they will pay for the theoretical lesser returns by holding HP. But, that's not always true.
HIVE is speculative
The price of HIVE can vary much more than HBD (usually). An 8-10% return on HIVE earned through HP at a lower price could mean higher returns when it hits $3+. The same does not apply to HBD. So, while the 20% interest may look huge, it may not pan out when HIVE pumps.
Consensus witnesses set the interest rate.
Technically, that is a central point of failure. The witnesses can decide that a lower or higher rate is warranted. If you put all your eggs in one basket, you may run into situations where you are screwed over. It might be better to diversify your holdings.
Miscellaneous stuff
One of the counterarguments against downvotes has been that it costs the downvoter nothing. Well, one could say it does cost something now. That something is the APR under certain market conditions. The person holding HP is sacrificing returns when they could have profited with higher interest.
I highly doubt the interest rate will cause a drastic decline in HP holding and cause security concerns for the chain. I guess we will have to see the effects thereof in the long term.
The verdict?
I wouldn't mind putting my HP into HBD when I feel like I no longer want anything to do with content creation, antiabuse, etc. Under the current prices, a $20K deposit would yield over $300 every 30 days. That's more than what I pull in for posting every month. With my luck, I probably won't get $20K for my HP if I start powering down now.
I have set very specific conditions before that would happen. You'll know when it happens. I love you degens even though I'm too ashamed to admit it to loved ones.
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