Hive Backed Dollar

Hive-Backed Dollar - Insanity Without Volatility

By R23 | Supportive Crypto Community | 13 Apr 2022


HBD.jpeg

 

I am just absolutely shocked at seeing a stablecoin being as lucrative as the Hive-Backed Dollar is.

With the most recent decisions by the top witnesses on the Hive blockchain, the APR for Hive-Backed Dollars stored in savings is now 20%... That number is astronomical.

Of course it isn't the 10000% returns we see when a new protocol is launched, but 20% on a stablecoin that should hold steady around $1 is just unheard of. There are of course risks, it could decouple from the peg if there is enough trading interest that things really swing around, but there are some funding proposals on the blockchain that are seeking to keep that peg and they have a ton of support to do so.

The Draw

When we are talking about stablecoins, we are usually looking at something that has been created to mirror stability and provide a base for a trading pair. Slowly over the last few years, we have seen stablecoins being offered yield for protocols to use them as liquidity in other trades. Over a period of time, I believe that we will see a shift away from being a base as a trading pair or even from that liquidity incentive and more towards stablecoins becoming the new standard of savings for many people.

If that plays out, when you are looking at the competition, the only entity that comes to mind for me is the bank. In the United States, the average interest rate on a savings account is 0.06% a year... So the Hive-Backed Dollar is approximately 19.94% more lucrative per year than the average savings account.

Now of course, the banks come with the protection of FDIC and that they are dealing in currency trusted by billions rather than millions. With that being said though, people are growing ever more unhappy with the banking system and the US government (especially from an economic standpoint); we have no idea what the world may look like in 5 years time and what will be trusted as currency.

With reported inflation over 8% and true inflation likely much higher in the United States, your savings should be keeping pace with (or beating) that rate. Of course it does not at any traditional financial institution, so we are seeing the effects of inflation hitting the people who are following the rules and working hard and putting money away in the bank. That 0.06% interest is not going to help out when your $20 loses 8%+ of it's spending power each year.

High Interest Rates Help The Little Guy

There is risk in stablecoins such as the Hive-Backed Dollar because we don't know who will respect it's spending power and that there is not infinite liquidity to sell like there is for the US Dollar. However, these risks should hypothetically be mitigated by time and continued success from cryptocurrency at large and the Hive blockchain in particular. I can't go out and say that the Hive-Backed Dollar will prove to be a fantastic investment, but if the correct dominoes fall into place, 20% interest on a stablecoin is probably the best investment you can make in the cryptocurrency world.

There are a lot of questions to be answered still, but keep an eye on this.

Come talk basketball on Dunk Social!

BSK1.png

 

Come talk comedy on PeakD community - Com3dy Central

 

Dave Chapelle.jpeg

 

Links and Connections:
Join me on Splinterlands exploring blockchain gaming
Get paid for your search results with Presearch
Follow me on Twitter/Instagram: @ Rob_Minnick23
Hive: @ rob23
NEW TRIBE: @dunksocial
Join me on Torum
Check out Cake DeFi for staking rewards
Bitcoin Cash Apps: @ rob23
Join me on Publish0x to talk crypto

Who I am:
My name is Rob and I am a prospective law student with interests in cryptocurrency and blockchain. I have enjoyed my time thus far engaging with Web 3.0 and am looking to continue learning more and sharing what I learn through my experience

How do you rate this article?


24

0

R23
R23

A new cryptocurrency investor looking to learn as much as possible about smart contracts and coding!


Supportive Crypto Community
Supportive Crypto Community

A blog that highlights crypto communities and shows how supportive they are of one another.

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.