The Future Of The Hive Backed Dollar (HBD)

2 mo
LeoFinance
8 Min Read
1621 words

Many are excited of late about the potential of HBD. The move to 20% payment in interest is enormous. This put it on par with many other stablecoin related DeFi projects in terms of the return. It also is starting to generate a great deal of demand.

HBD is a base layer coin. This removes third party counter-risk. It is backed by $1 worth of HIVE, something that helps it to hold its value. With the increase in payout, more HBD will be generated with the same amount of money in savings. The goal is to see that amount continually increasing.

A recent conversation with a buddy of mine revealed how powerful this is. He lives off his investing, hence yield is vital to him. For him, the old time markets are all there is. Here we see the generational issue of a Baby Boomer. Cryptocurrency is completely outside is realm of understanding.

With the rise in interest rates, he mentioned some of the options that he is getting. There is one fund which he now gets 2.7%-3% on. He also was able to get some I-Bonds, which limit the purchase amounts, one set for 7% another for 9.5%. These are related to inflation so obviously are doing very well. Of course, when inflation reverses course, the long term implications on these bonds are evident.

The fact that HBD placed in savings on Hive pays 20% with very low risk is enormous.

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What Is the Future Of HBD?

Many question the sustainability of a 20% interest rate on HBD. Those who believe it not possible are doing so based upon metric that do not capture what is taking place. Essentially, a lot more HBD is required to fulfill the needs as a legitimate stablecoin. With roughly 10 million freely floating, there need to be a 10x in the number quickly.

Of course, long-term sustainability it tied to the network effect. Without it, anything loses its value.

Many feel the USD is doomed. The challenge with this view is there overlooks the network effect this currency has. We will cover the different factors in this article but, as we will see, the USD hits upon most of them. HBD needs to follow a similar path of developing utility in a similar manner.

Here we will see the different use cases that have to be built out.

Payment System

The most obvious need for a currency is as a payment system. This is rather obvious yet overlooked in the world of cryptocurrency. Everyone focuses upon price, ie speculation, that they miss the most basic concept.

When a currency has a high number of payment transactions, then it has great value. Suddenly it is tied to economic growth. As this increases, so does the immersion in that system.

HBD has the ability to grow the Hive Economy a great deal. As the pegged currency, commercial activity can take place without interference. Again, no 3rd party application is required. There are 3 second block time along with fee-less transactions. Of course, is web developers want an easy way to integrate a payment system into their site, Hivepay is an application that is already available.

The key for HBD is to be used in millions of dollars in commercial transactions. This should be a focus over the next couple years. As more applications and business accept it as a payment mechanism, the inherent value grows considerable.

Liquidity Pools

In the shift from centralized exchanges to Decentralized Finance (DeFi), we see liquidity pools becomes a major piece to the puzzle. The ability to seamlessly swap from one token to another is vital. Since so many different ones are emerging, applications are going to have to fill this role.

Here is where liquidity pools enter the picture. People put up their tokens, usually paired with something else, in exchange for a certain return. This operates at a second layer and carry a bit more risk than HBD in savings. However, the APR often makes up for it.

The first pool of decent size is on Polycub. This reached $300K in 10 days since going live. According to what was stated, the goal is to get to $5 million.

During the latest AMA, it was stated that this will be replicated on each EVM chain the project expands to. Since it is already operating on BSC, we will see a bPHD. Having wrapped versions of HBD will only increase the accessibility. This is vital especially without many listing on centralized exchanges.

Along the same lines, we also have the internal exchange where HBD can be acquired. For this to flourish, we need to keep adding more liquidity.

Collateralization

We discussed this topic a great deal in the past and we will keep doing so. The reason is this is vital to the establishment of HBD. Being a stablecoin, one of the key parameters of collateralization is met. As the amount of coin in circulation grows, along with different pools, the peg will become even stronger. As it achieves this, it ability to serve as collateral increases.

The reality is the global financial (banking) system is starving for high-quality collateral. This is a role that cryptocurrency can fill. With Hive operating as one of the more decentralized blockchains and HBD built at the base layer, it has the ability to provide collateral that the world desperately needs. By using HBD, it ensure the stability that cannot be met by a large portion of the industry.

Few realize how big this truly is. Estimates are going to vary but we are talking about tens of trillions of dollars. US Treasury bonds are considered pristine collateral and there are about $20 trillion of them outstanding. Naturally, not all are collateralized so the true number used for that purpose is lower.

The private sector has yet to offer up something of similar caliber. The last attempt was Mortgage Backed Securities which didn't fare so well.

Time Locked Pools

Here we have a feature that is vital to both collateralization and bonding.

It is was already discussed that time locked options will be added to the Hive savings program. This will essentially be a time commitment in exchange for a higher rate of return. If the liquid option (3 day lock up essentially) is paying 20%, perhaps we see a 1 year paying 25%.

Whatever the numbers, the key point is the lack of liquidity. People are sacrificing that. Since many people in the fixed income market think long term, this could be a vital piece of the puzzle going forward.

The timeline on this is the next hard fork. It is impossible to code it for the upcoming one so it will be on the list after that.

Hive Bonding

Here we see where layer 2 enters the picture. Having time locked options is essential. However, even though people are committing for a time period, liquidity is still important. There are always emergencies which could force someone to require the money. At the same time, here is where we see the collateralization really taking hold.

The development of Hive bonds will enable a short term lending market to form. As stated this is a second layer solution that can be offered by many applications. Depending upon how the design it, we can see exchanges opening up to offer trading on these assets.

Of course, the key to this market is liquidity. If a thriving exchange(s) can be created, we could see millions of these changing hands over time. Reverting back to collateralization, we can envision the scenario where these are purchased for that purpose.

Funding And Investment

This is something that is completely overlook when discussing the USD and its role as the reserve currency. However, this is really a factor that makes it almost untouchable. It is also something to consider for HBD to further solidify it.

The USD is a funding and investment mechanism. A large portion of the global wealth is tied to the USD. This means that it offers opportunities for further investment in the quest to create more wealth.

Through the mechanism spelled out here, the possibility exists to push HBD into this realm. Over time, as the entire economy surrounding this currency grows, real wealth will inevitably appear. Here we see the ability to expand many of these features to include real world funding and investing. If this were achieved, it would further solidity the entire ecosystem.

People are starting to understand that we have to reimagine wealth. Framing HBD in such a manner is the start.


These are a few areas where the future of HBD is going to head. It is a mammoth task before us. A lot of building is needed. We are nowhere close to having the infrastructure to pull this off.

However over time, we will see pieces falling into place. It is hard to see the vision now since we are at the early stages. Nevertheless, if HBD is going to become a legitimate player in the stablecoin market, these different areas need to be addressed.

It is also a way to differentiate HBD from a lot that is showing up. We now many, if not most, are not going to be expanded in such a manner. The Sunny Stablecoin, as an example, will likely have nothing more than yield farming.

When we put all of this together, it creates a very resilient system.

What are your thoughts? Let us know in the comment section below.


If you found this article informative, please give an upvote and rehive.

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2 mo (edited)

There is no traditional financial system or scheme that is giving out 20% on your money for simply Holding it with 3 days unlocking period. HBD is one of the most underrated DeFi opportunity in all of crypto. Get a cold wallet, connect a seperate Hive account to put all your savings in its HBD Savings to enjoy the power of compounding.

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It is the starting point. We need to generate a lot more HBD and having more in savings does that.

The goal by year end is to get 100 million HBD in circulation. That is going to require a lot of effort but it needs to be done.

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Im going to take advantage as much as I can although the Hive price is quite strong against other cryptos right now.

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That is where the decision comes in: HBD or HIVE?

Nice when people are trying to decide between the two because both are on Hive.

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i need both, but savings can now goto HBD

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Yes it is a good idea to keep adding both. Of course, that runs into resource issues. We tend to run out of money at some point.

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I would have stopped transferring HBD to savings after a certain amount; however, I will go on with the new interest rate.

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Hard to dismiss it. We have very low risk along with the power to really enhance the amount of money we have in the future. This is going to be hard to pass up for most.

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Perhaps, people will convert fiats to HBD to get %20 interest payout.

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Yes that is the goal. The challenge is getting the HBD. Not a ton of it out there.

We will keep working at it though.

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I would never have thought that hbd had as many use cases as you mention, it is really great to consider that we can do many things with it, personally I had my little battery there waiting for some lucky break and hive to come down and increase our battery but I had it there without doing anything.

but already with a juicy 20% it can not be despised and if with the investments as you say of your friend paying 2% compared to what hive offers us is a bargain that can not go unnoticed and hopefully people will soon spread the word and we will have a greater acceptability of our beloved hive.

Cheers.

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I would never have thought that hbd had as many use cases as you mention,

Well I do spend time thinking about how to go to the core of the international banking system and what needs to be done to truly create an alternative system. There is a lot to it.

Hopefully we see a number of these aspects built out. Right now we need people who are on Hive to keep putting more into the savings along with those helping to fill the existing LP.

Both are required.

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20% Apr with all this many use ,this one of a kind investment,I can't wait to be relevant on hive , getting more upvote and start saving up my HBD

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Well we do have to build the use cases.

And that is why the 20% will be sustainable. When the need for more HBD is there, the system can keep creating more.

That is why it is important to keep developing those applications that will require it.

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Nice

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2 mo

It would be cool to see some sort of integration between the mobile Hive Keychain Wallet and some other platform. Either that or some of the crypto credit cards allowing you to load up HBD on them. I guess to get to that point we need to resolve the supply issue you talked about. Funny thing is USD at .1% interest in the bank I have no problem spending it. HBD at 20% interest I am a bit more hesitant to part with it!

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Ah yes. That is where the interest rate dilemma comes in. It is why the EU went negative with their interest rates. They want people to spend money thinking that will help the economy.

Obviously that did not work out.

However, you are focusing upon all the money you have in the HBD Saving program. If you needed something and HBD was the payment mechanism, you would dip into your liquid supply.

Why do you spend your dollars when you can investment them in something like IBonds right now and get over 9%? In spite of that, you still have bills to pay and things you want/need.

It will be the same. Yes there will be some HBD you keep in savings, many a lot. But you will also have it that you use for other purposes.

For example, what if you needed something in Ranarok that would help you win more battles? Then you would spend the HBD to get the card or weapon that you needed.

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2 mo

you would dip into your liquid supply

What is this liquid supply that you speak of? I am kidding of course. You are right, at some point when it becomes more mainstream and there is a larger supply I will likely keep some of my HBD liquid.

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Yes that is why we need so much more HBD> We are going to see more use cases as time goes by. This is going to get big very quickly in my opinion.

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2 mo

Sounds good to me! Can stable coins moon? :)

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Yes but they moon out instead of up. The market cap increases as supply goes up.

So yes it can moon but in terms of the number of coins required. LOL

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2 mo

Gotcha!

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It is looking like an interesting world where hive and HBD may and will lead the way :)

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It is the opportunity if people understand it and start building things out.

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With more growth, HBD could be one of the biggest stable coins that exist. Second only to Justin Sun's funny money USDDon't

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We need to really keep the expansion going. For this, we need to keep highlighting it. I am going to put together another post about it tied to something that took place.

We really need to get this ball rolling.

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HBD has a huge potential. I feel it is just the beginning. What you mentioned in this post about the future of HBD, it will place Hive Backed Dollar in a unique position. Utility of a coin matter. 20% APR is the highest APR someone can get from a Stablecoin without any third-party risk.

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20% APR is the highest APR someone can get from a Stablecoin without any third-party risk.

I will trust you on this. I have no idea what others are offered out there.

However, I can say that HBD is truly decentralized since it is tied to Hive and no founders stake or premine.

That is a difference maker.

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2 mo

You told so many things about the HBD in this post. Those are so impressive things and for all of those development i like hive mostly believe hive really good way. Good day.

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Tbh I am holding stable coins for some time and getting the ROI is not really worth it. But since the 20% announcement I am slowly shifting my assets to HBD. Hopefully with enough use cases and utilities we will see sth huge for this new feature. Thus the whole Hive eco system shall rise due to this.

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HBD is way out in front compared to the offerings of other stable coins. UST was offering 19.2% and is now closed as they are fully subscribed according to the site. 20% and what it offers safety/risk wise is a no brainer for investors.

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The Hive bonding on HBD will help HBD to go a long way. The 20% introduce on HBD now makes Many people to buy alot of HBD to save..

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The future of HBD is great. What we lack is visibility into how great our ecosystem is. The fact that so many crappy projects get listed on major exchanges is a crime when you see what we built.

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1

This is massive. Everything is conceivable. We can definitely accumulate so much hbd with hard effort for a brighter future of the blockchain. Thanks for bringing this up sir @taskmaster4450.

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It might be slow but I can see pieces starting to fall into place. As you stated in your post. We will look back one day and wonder how we got here.

Well maybe not you 😉

!BBH

!ALIVE

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@taskmaster4450! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @bradleyarrow. (22/30)

The tip has been paid for by the We Are Alive Tribe through the earnings on @alive.chat, feel free to swing by our daily chat any time you want.

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Because this is such an awesome post, here is a BBH Tip for you. . Keep up the fantastic work

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There more HBD we can get in circulation the better. 20% APR should bring in more investors. This can only be good, as other users follow suit. The tvl will surely increase once there's more exposure !

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I don't mind taking HBD as an opportunity and I think the payment system is probably the best option for HBD to grow. However, I think the issue there is that HivePay is the only payment processor that allows it. It would be better if we could get some more options besides that.

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Do you know how much #HBD is printed daily?

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Do you mean that it is really good to put hive points into hbs? it's now 20% and the platform can make use it of it while its on the savings?

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The reason is this is vital to the establishment of HBD. Being a stablecoin, one of the key parameters of collateralization is met. As the amount of coin in circulation grows, along with different pools, the peg will become even stronger. As it achieves this, it ability to serve as collateral increases.

This paragraph lost me, I have re read this about 5 times and I still can't understand what this is trying to say. Can I get a Laymans terms version please.

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I don't understand where this money is coming from. If you're inflating one currency and backing it by HIVE, you are inflating HIVE.

So you're basically saying, let's devalue our base currency so investors who do nothing to contribute to content get paid 20% APR.

I fail to see how this benefits content creators.

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2 mo (edited)

Vision. That's what I like about your posts!

Would be very nice if HBD could find a route to become a payment for real world use. Huge. This has been the aspiration of many cryptocurrencies and so far none but the biggies have made it. Hopefully we can.

Even if we don'tget the payment aspect going, the easier fruit in today's environment is gonna be the others you mentioned (collateral, loans, bonds etc.). Right now the focus on defi is building, and while I don't think it is as durable as the payment route, it is what's hot right now. Probably HBD's best shot. Also those routes can be artificially "stimulated" into existence whereas utility for payments is something people just don't go for unless their particular payment tool of choice faceplants.

Oh yeah. 20% is probably not sustainable forever, but it is feasible for a long enough time to have HIVE increase greatly in value :-)

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I love Hivepay and have been integrating it with my site, so hopefully when I launch the site will be able to accept payments via Hivepay.
HBD is an amazing opportunity to really build quite a nice income generator, with such a high return.

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