20% APR? It might backfire

in #hive3 months ago

Im reading some posts on this subject. I get it, I would love to get some nice passive, truly passive, income. But, let's not get carried away here.

source: USA Today

I love the idea of staking assets as much as the next guy, but I'm under no delusion that people will do their part and not flood/dump the markets if things get a little scary.

The algorithm alongside the current system of incentives is doing a pretty decent job keeping the peg stable. But I'm no ready to call it a rock solid system. Inflation can kick our ass, and we must not forget that.

If, and I do say, IF, we move to 20% APR, I hope that it's very temporary, and that we wean off, for lack of a better term the 20% very slowly.

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Currently already exists other crypto project that works more a less like HBD that is UST and everything it is working very well and they have a 20% APR for UST.

With the HBD Stabilizer project I think 20% APR on HBD will not hurt our ecosystem but we need to see what will happen.

One thing I know this will make possible to atract more people to Hive blockchain because exists a lot of investors searching for good APR on stablecoins.

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I hope your optimism is well placed, I really do. It makes sense, it's rational, but there lies the problem.

The best thing that we can do is trying it and if we start to see some problem because of this we easily can "role back" this change.

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Ya... markets correct these things. There is an interest rate that cannot be sustained. 12% seems to work right now... would 15%, would 20%? If 20%, why not 100%.

its always risky to modify incentives. No doubt we just added the incentive to hold HBD over Hive. It's a "safer" move.

What will that do to the price of Hive, remains to be seen.

Welp we are at 15% now so I'm curious how things will react. I don't see how we can just print a high interest and not expect something bad to happen lol. I understand its low at the moment but still.

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it could go both ways, it really could. I dont think this experiment will last tho