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Is moving HBD from post rewards to savings a good option for most users in the current market?

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fredrikaa
@fredrikaa
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For as long as our chain has been around, users have speculated and theory-crafted about what to do with our post rewards. Should we buy and Power Up as much HIVE as possible every time there's a post payout? If so, should we acquire HIVE by converting the HBD or by buying HIVE on the internal market? If not, should liquid rewards be used to acquire more of other cryptocurrencies like Bitcoin or Ethereum? Or perhaps best of all, have a simple plan that involves a mixture of all of the above.

Today, however, we have another option of saving the HBD payout for a decent interest (currently set to 10%). And with many of now earning far more HBD than ever done before due to the recent rally in the HIVE price, considering what to do with it is likely a question on people's mind.

So what should we do?

Seeing liquid post rewards north of 100 HBD triggers questions of what to do with the payouts. I also couldn't help but love the fact that HBD was exactly $1.000 in this screenshot from my peakd wallet

New users are still likely best to just Power Up

It is easy to get distracted by the financial optimization problem as if it exists in isolation. There is no shortage of new users asking how they should curate to earn the most curation rewards, or otherwise make the most from the tokens that they have. In practice, however, showing that you are continuously powering up and looking to build a stronger presence on Hive has more benefits than just the financial returns of higher staking/curation rewards and a higher voting value. Doing so may also increase the likelihood of receiving good upvotes by other Hive stakeholders. From our point of view, it is more attractive to distribute votes to users who are buying and powering up for at least two reasons:

  1. The obvious reason that it results in less selling pressure and thus a higher token value.
  2. It helps further decentralize Hive as a blockchain when more users accumulate and HODL Hive rather than putting it back on exchanges.

New users who don't have a lot of Hive Power already will benefit more from aiming to increase their overall post reward. Thus, the best option is likely to do whatever may increase the likelihood of receiving more upvotes. And showcasing enthusiasm for Hive, and powering up has always been a good way of doing so.

What about the rest of us? What's the difference really between saving HBD and staking more Hive Power?

Again, it is tempting to get into the nitty-gritty about what expected annual returns one can make percentage-wise from saving HBD versus staking more Hive Power and thus earning staking + curation rewards. But again, while I'm sure some would find those comparisons interesting, they would mostly be a waste of time. Because in the end, it will pale in comparison to the likely price change in HIVE one way or the other. Instead of asking what will earn you more tokens, it is better to ask yourself the simple questions:

  • Do I think HIVE is more likely than not to go up or down in value in the short to mid-term?
  • Do I want or need better liquidity so that the 3 day withdrawal time of HBD from Savings versus the 13 weeks power down of Hive Power makes a real difference?
  • Do I have a goal to acquire a larger say in Hive's governance and/or token distribution and thus have a demand for more Hive Power?

Sticking with the first, since it is the question most related to the topic, choosing to put HBD into savings is most of all a hedge against cryptos (including HIVE) going down in price. So if you're in a position now where your portfolio has gone up an unbelievable amount in recent days, then diversifying into some HBD savings is likely a good idea. At least speaking purely from the point of view of financial diversification and risk allocation.

Speaking for myself, I decided to start stacking some HBD in savings for now. Maybe I'll let it grow to 1000, or maybe 2500 to begin with, and then just keep it. Maybe I will be able to accumulate more HBD and then buy a future dip with it? Or maybe I'll just earn a decent ROI. I don't know, but sometimes, doing something a bit different can be wise if only to avoid having all the eggs in one basket.

What do you all intend to do with the increased HBD rewards?

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