HBD tokenomics - Applying some math in order to decipher HBD Saving yielding
Hive Backed Dollar (HBD) is an algorithmic stablecoin on the Hive blockchain. If you want to get into more depth with it you can read the What The Hive Backed Dollar Really Is And How It Works comprehensive article written by @taskmaster4450. He points out the strengths of HBD and its tokenomics within the Hive blockchain. In this post, I intend to put some simple, but clear math in motion in order to decipher how the HBD Savings earnings are working and bring some atomic details to it.
HBD Savings is a native deposit account at the first layer on the Hive blockchain which provides monthly claimable yield relative to the HBD amount held into it. Let's list some data on it.
HBD in Savings provides a 20.00% APR which is claimable once a month. This means that we have the option to claim the HBD once per month which will be compounded to the current HBD amount in Savings and will provide a bigger % APR. How much bigger? By using the Compound Interest Calculator from the all calculators website The Calculator Site we see that starting from a yearly 20% APR and compounding the interest monthly, the real HBD APR is 21.939%.
While the interest is claimable once per month, a nice detail is that the HBD interest is accrued at the Hive blockchain block transaction time, which is approximately every 3 seconds. This means that any HBD that you add to the Savings account during the month will be considered on the spot and start providing interest and be accrued to the total amount. Here would be nice to have a feature offered by any Hive apps or wallets to deposit any liquid HBD into Savings automatically. Hive Keychain already has an Automatic Task to "Claim Savings interest" so it could also add an Automatic option to "Deposit HBD into Savings".
I am mostly depositing HBD into Savings whenever I see it standing stale in my Wallet as even if the amounts might be smaller, they will start accruing interest right away. Being a feature native at the blockchain level it offers a safe investment instrument and on top of that in case you want to withdraw the funds from the Savings it requires only 3 days as a waiting period, which is pretty decent. The HBD Savings is a stable revenue stream and we saw how important is to have such an income during this crypto winter and a bear market.
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I don't even have stale HBD, what I do is to either throw it into savings or convert to hive. HBD's stability thus far is one of our biggest wins last year
Yeap, me too. Would be cool to have an automated task in Hive Keychain to do that.
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I must try out this cool feature from Hive Keychain. Most of my HBD rewards are stash into savings every single day.
Yeah, it is only for HBD claiming. What I was saying is that it would be cool to have an automated task that would run on an hourly base and transfer any liquid HBD to Savings in order to start providing interest.
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Right. I get it now. Even on a daily basis will be good. I hope it gets developed at some point.
It's nice to see that the APR is higher and that you get more if you make sure to claim your HBD.
Just wondering, but does the HBD that is generated from interest (not claimed yet) also getting compounded or does that only happen when HBD is claimed into your savings
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When you claim it, the interest is transferred to the HBD Savings account. Thus only at that point it becomes compounded, without claiming the interest does not generate other interest.
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