HBD took by storm the stablecoins space with its 20% APR (which in fact translates to 21.94% APY) and it opened a lot of opportunities around it. Now more than ever the Hive users and investors are treasuring HBD and putting it into Savings accounts for that sweet return. But I think there are still some optimizations that could be made in order to take the yields to higher levels and get them as close as the current DeFi mechanics. And one of them could be to provide daily compounding interest rather than monthly.
HBD is rewarded on the Hive blockchain as a portion of the content creation and curation rewards. If you are active enough and post and engage daily with comments and upvotes, probably you are being rewarded on a daily basis. Thus it would make sense to deposit those in the Savings account in order to earn passively more out of it and build a fund for the future. But while this routine probably is recurring for most of us, it would be great if also the interest from the Savings account would be paid on a daily basis. This will close the gap with other DeFi mechanics where rewards are compounded even several times a day, but I think that if getting HBD interest compound on a daily basis it would be good enough.
We all know that Hive blockchain is still lacking real DeFi solutions and tokenomics and if we want to challenge other blockchains and attract investors we need to get as close as possible to the mechanics that are on the market. Auto-compounding is a feature that is part of most of the DeFi platforms and that is triggered whenever someone interacts with the smart contract, making it high probably to happen multiple times a day. Thus, having HBD interest compounding mimic this on a daily basis I think would close the gap between these features.
I don't think that this requires a big code change as probably just the formula needs to be adjusted from *1/12 to *1.365. I wonder what are your thoughts on this and maybe other ways in which HBD could become more appealing to investors and attract more funds within the Hive blockchain ecosystem.
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It all depends on which purpose the witness have…1 month compounding creates certain scarcity on HBD while 1 day less
Indeed, but mimicking DeFi might bring additional benefits.
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I like 1 day compound but seems less likely, It may create alot of chain bloat claiming compound daily.
I don't think so as it is a simple job that can run daily and also not everybody has HBD in Savings.
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That is true, i wasn't sure if it would fill the blocks
We get used to calculating APY thanks to PolyCUB 😄
Yeah, compounding interest is purely amazing especially if we consider %20 APR paid for Hive Dollar in our ecosystem. In the near future, we will hardly find HBD in the market ^^
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Right, APY includes compounded interest thus that's the one we are most interested in.
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Would this be with claiming or auto-claiming? I feel like, if its daily it should be auto-claiming just like any other defi project.
A month does seem like a long time in crypto. I am all for trying out different things and we could start by reducing it to 2 weeks, then 1 week and then maybe 1 day, over the cause of a year, so we could get some data and analyse it :D
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I think one day is too less. Personally 7 day might be a better solution !
I feel it should be daily or every 3 days like the lock period so I think 3 days is more in line with what would need to happen. The whole waiting a month thing and then injecting a large amount of HBD from claims after 30 days seems a little counterproductive to the system and sets it up for wild swings again as liquidity is added in chunks instead of a more steady predictable method.
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APY based on daily compound is 22.13%, while monthly compound is 21.94%. The different is only 0.19% per year.
If Hive changes to pay HBD saving daily, it can create a stress for Hive networks because there are a lot of more daily transactions.
So in my opinion, it's not worth to do daily compounding in this case
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I also like the daily basis idea. That's probably cos I'm used to Anchor Protocol on Terra network. APRs on both are pretty same, Anchors APR is 19.5% at the moment. Without any unstaking period Anchor has become like a wallet to me. Perhaps it's even too easy to withdraw funds from there..
I'm new to Hive ecosystem and really excited about HBD savings. Compared to Anchor I consider it more of a longer term savings project. Still would like see daily interest payment though.
I think it depends, but would the solution just be to claim every single day? Right now, that is 30 days and I do agree that it is quite a while before we can compound. I guess I could just set the auto claim interest thing if we ever got to that point that it is daily so I don't forget.
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It's good to see you on this platform. I am destined from noise.cash. my friend. Good luck. Let me know if you have any recommendations for this place. I'm new trying to figure it out.