Introduction
HBD (Hive Backed Dollars), the native stablecoin of Hive, is now stepping into a new realm of utility thanks to the magic of VSC. We are bringing our own version of the innovative technology “liquid staking” to one of the best stablecoins out there. By introducing HBD Staking on VSC, we're merging HBD's reliable stability with smart contracts' innovative potential on Hive.
There has been an overwhelming need for better DeFi (decentralized finance) within the Hive ecosystem for a very long time. Outside of using Hive Engine (a Hive side-chain), there really hasn’t been a way to do things like swapping or providing liquidity with HIVE or HBD. With this development, we're not just expanding the use cases for HBD, we're paving the way for many different DeFi applications within the Hive ecosystem. HBD staking is going to be one small piece of an incredible future for the stablecoin and its users.
After providing a decentralized smart contract protocol for Hive, our vision is to add our own network services such as creating a DeFi platform that expands the capabilities of Hive. To this end, HBD will become a fundamental part of VSC for the reasons we presented in our previous post. Let's start by getting to know the essence of HBD, before learning how HBD staking will work on VSC, for those who are unfamiliar with it.
What is HBD?
HBD stands for Hive Backed Dollars, and is the native stablecoin of the Hive blockchain. HBD provides stability in terms of dollar value for the end-user, while also giving the user the option to lock it to earn interest.
This stablecoin is fully decentralized with no backing from Venture Capital funds or a company. This means that your account, along with all held assets, is secure and no one can access it without your credentials (keys). HBD is backed by HIVE as well, providing 8 years of security and stability history on the Hive blockchain. It’s the most stable and secure stablecoin that anyone can use, free of expensive transaction fees.
HBD Staking on VSC
Before VSC was in development, there was only one option for users to be able to use HBD for more than just the basics. Users could lock their HBD in Hive Savings, and earn 15% APR (determined by Hive witnesses). This was the extent of what could be done aside from sending and receiving.
With the introduction of HBD Staking on VSC, everything changes. Users will still be able to take advantage of the interest from Hive Savings by staking their HBD on VSC, but they get some extra benefits. When HBD is staked on VSC, the user still has access to their value in the form of sHBD (staked HBD). So even though your HBD is staked, you will be able to use sHBD for all of your decentralized finance needs.
Giving users the ability to still use their HBD in the form of sHBD while it is staked is just the beginning. Imagine a world where there are DeFi platforms that support sHBD for yield farming, or even as collateral for synthetic assets. These are just a few things that come to mind when you start to think of HBD as more than just a stable coin. HBD staking on VSC will turn HBD into a highly composable asset that everyone can implement into their system.
Resource Credits on VSC
While transactions on VSC are gas-free, there is still a requirement to have Resource Credits (RCs) for transactions. The great thing about this is, RCs regenerate over time instead of requiring you to buy additional tokens to pay transaction fees.
So how do you get RCs? It’s very simple. All you have to do is hold any amount of HBD in your wallet, not staked. As you make transactions across VSC services and applications, HBD will be locked for X period of days relative to the amount of RCs needed for those transactions. Over that period of time, as RCs are not used, HBD will be gradually unlocked for use in your wallet. Each type of transaction uses a different amount of RCs, based on the complexity of the transaction.
RCs operate a little bit differently on VSC than they do on Hive. The major difference, beside the fact that it uses HBD instead of Hive, is that you don’t need to stake an asset in advance to get RCs. On Hive, a user must stake HIVE in order to use RCs through a process call Powering Up. Unstaking is known as Powering Down and takes 13 weeks. On VSC, all you have to do is make sure you have HBD in your wallet when you make transactions. The rest is automatic, and easy to understand for the user.
HBD and sHBD
HBD on the VSC network will have two forms: liquid and staked.
- Liquid HBD is the HBD held in your wallet. As you make transactions, Liquid HBD is automatically locked up relative to the amount of RCs needed. Nothing is locked before you make a transaction, unless you stake HBD manually.
- Staked HBD (sHBD) is HBD that is manually staked on VSC and does not generate RCs. 1 sHBD is equal to 1 HBD plus the interest earned from staking. It will earn the same APR as it would in Hive Savings, and period of X days for unstaking takes place for sHBD. Your staked HBD balance won't change, so you won’t see the amount you earn from the interest until you unstake it. When unstaked, HBD is returned to the wallet including interest earned.
As an example, let’s say you have 10 HBD in your wallet. As you make a transaction X amount of your 10 HBD will be locked for Y period of time depending on RC requirements for that transaction. You can also stake your HBD manually. If you stake 10 HBD, it is locked and you receive 10 sHBD on VSC. Now you can perform transactions with the RC associated with that amount of HBD staked and earn interest while still allowing you to access its value in the form of sHBD.
We hope you are as excited as we are with this news and what’s to come because of this. Let us know your thoughts in the comments and stay tuned because we will have more updates soon.
More articles:
- Choosing HBD for VSC
- https://peakd.com/vsc/@vsc.network/next-phase-of-vsc-hive-smart-contracts-and-v4v-joint-dhf-proposal
- VSC Block Explorer UI Updates
Absolutely loving the way you implemented the RC system around HBD and that you introduced sHBD for staked HBD. So many possibilities! And so much utility for HBD going forward to be expected!
So now money can make money money?
Yes
Shiny
Collateralized Loans? 👀
Cant wait to try this out! Im a hard core believer of the potential that hbd has.
This sounds absolutely amazing. However, I am very new to Hive and have only just started blogging. You don't say in the post how we actually stake HBD on VSC? How is it done?
We will have a dedicated UI that will handle everything for you.
Including transfers to/from EVM wallets and staking
I don't think it was explicitly stated, but when you use the term wallet, there will be a separate VSC wallet for all of this right? For the staked HBD, does the interest compound? Because in the current setup, every 30 days we can claim the interest and it automatically adds to the staked HBD, and will be calculated for the next interest. In your setup, if one is staking for more than 30 days, will the computation for interest just consider the base/current staked HBD, or will it consider the additional interest earned in its computation?
Wallet implies the user wallet whether that is EVM wallet or Hive wallet. Account balances like HBD or Hive will be stored and maintained in the dedicated Hive gateway account for the VSC network. Staked HBD will compound automatically.
Thank you for the clarification.
thank you
This sounds very interesting, I'm following to see where it goes. Also I'm very curious about the different use cases and possibilities that will arise from this.
This is exciting. When will this be ready to use?
3-4 months from now (subject to change)
fantastic work!
what is the point of stacking it? I mean i did read it twice and dont see a benefit
15% APR while still being transferable, or staking for RCs (without APR)
yeah it was in the paragraph below that. I did only read, no RC but APR.
There's a couple reasons
Having a version of HBD that can be used on VSC while staked on Hive is the advantage.
That could be cool to do something with like dec and sHBD. Would let spl have a better stable coin pair for dec in hive.
the possibilities are endless
Ah i get it, is below that " it generates no RC"
Even though I don't understand why I would want to stake HBD, I really share your positiveness.
15% APR or for generation of RCs on VSC while being transferable (liquid)
Hi there @vaultec first of all thanks for doing new investment opportunities. I see many people wondering about this feature and even myself I wonder about, I think I have the idea:
However could you please elaborate, maybe explaining it to me like if I were a 5 years old, even using a diagram or pictures so we can really get the benefits? Because I kind of get it but at the same time it is not clear to me.
Also please let me know:
It's locked up until it's unlocked which takes 3.5 days to go from being staked to unstaked. Keep in mind it's still transferable while being locked up, it just cannot be withdrawn outside of VSC while being sHBD.
sHBD is transferable, it just cannot be used outside of VSC without waiting. Regular HBD on VSC can be instantly withdrawn from VSC to a regular Hive account at any moment
This is part of our future plan to build cross chain wrapping/bridging technology. It would likely be regular ETH, but yes that's the plan in the long term future.
will be cool if there is a protocol for CDPs and lending that is developed
start developing it on VSC!
Congratulations @vsc.network! You have completed the following achievement on the Hive blockchain And have been rewarded with New badge(s)
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If I stake 10 hbd I can then do one 10-rc required shbd transaction?
shbd is just liquid HBD while being staked
Regular hbd generates RCs without being staked, and is only locked up upon use of RCs.
So, if I stake 10 hbd in return for 10 shbd, I can then send ~9.xx shbd to another account who will then have to unstake the shbd to have liquid hbd that can be withdrawn?
Are you asking about the flow required to withdraw? Or a hypothetical scenario? In the ladder scenario, if you have 10 hbd, and you decide to stake it, you can only stake 9.xx HBD as some portion of it will be temporarily locked up to regenerate RCs while the remaining 9.xx can be converted to shbd (which will give you 15% APR as per Hive witnesses). This is designed so that any user can immediately receive hbd and automatically generate RCs without needing to stake or do anything like that.
The hbd that doesn't get staked is freed as the rc's hold comes off?
Once freed from the rc hold, those hbd could then be staked from the rc's earned by the staked hbd?
When I send shbd to another account that account would have to unstake it before they could withdraw back to their hive wallet?
That's correct!
The RCs are generated restoratively. So when you have 1000HBD you have 1000HBD worth of RCs even if you received all that HBD 5 seconds ago. Once you use those RCs that HBD is dynamically locked/unlocked as it's used or regenerated. So if you use that whole 1000HBD worth of RCs, that entire amount is locked up until it's regenerated (or partially unlocked as those RCs become "freed")
So, I send 1000 hbd to my account within the vsc contract, I can immediately stake 999.xx hbd in return for 999.xx shbd.
The staked hbd receives rc's.
Those rc's can then be used to stake the .xx hbd that was locked initially for rc's?
Or, is there some regeneration period that would have to occur first?
What is the expected rc to hbd ratio?
Pennies or less, I hope.
If I send shbd to an account, that account can immediately use the shbd within the vsc contract, or begin an unstake to withdraw?
How long is the unstake period?
These are the lines that led to the questions.
It appears to say that staked hbd will earn rc's.
IF I send shbd to another account does the underlying staked hbd also go to the account thereby reducing my amount earning interest?
When does the shbd reconcile to my account?
I can't very well send my cake and have it too, can I?
sHBD will generate interest on a monthly basis. If you send it before it gets compounded then they will receive the interest attached to the sHBD. We will formalize this process a bit more in the future as we figure out the exact model this will be done.
Certainly aiming for the even better future. 🙌😃
But there are a lot of questions in the comments. Thanks for adressing them. Those are everyone's questions.
👍 ¿Do you agree?
Loving the questions! Thanks for your support.
Does this use Hive's native staking mechanism (AKA putting HBD in savings), or something else?
HBD Savings
RC on VSC or HIVE is same？
or they use on different chain
RC on VSC
With EVM capabilities, VSC is bringing a lot of DeFi possibilities on HIVE.
Liquid Staking is definitely a breakthrough and the right way for Hive to compete with other chains, it can certainly speed up the development process, and the innovative way in which the "Gas" of the transaction will be paid by bringing CRs into the equation is great.
Hello vsc.network!
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Is the interest payout for unstaking sHBD -> HBD simple or compound?
With Layer1 HBD Savings, interest can be compounded by performing an HBD txn once every 30 days.
It is automatically compounded by the protocol