RE: Thinking about 2026 Goals

HBD has been a really good thing for HIVE

over the last several years. It has stayed very very close to $1 almost all the time. It had a yield of 20% for a while which was amazing, and currently 15% isn't bad either! The interest is paid monthly, and for those who compound it by staking the interest received, they get 16.07545% each year.

However

Ya, sorry but we have to be fully aware of not only the upside but the downside whenever we're making costly decisions in life.

HBD is a debt product. It is an IOU for a dollar's worth of HIVE. New HBD is printed for a few reasons, one being to pay rewards to content creators. Another is the HBD created to pay that nice 15% interest.

It is harder for HBD to retain its peg as the Debt Ratio increases. Therefore there is a Haircut Rule to limit HBD creation. At 20% no more HBD is paid to content creators; they get their reward in HIVE only. At 30% the redemption in HIVE for each HBD converted starts to go down, which could lower the HBD price. Currently the Debt Ratio is near 13% and rising rapidly as anyone can see if they look at the chart at hbstats (see sources).

Witnesses might decide to lower HBD interest rates if the Debt Ratio goes higher, so as to decrease the HBD creation/inflation and therefore Debt Ratio.

HBD is not risk free. If the HIVE price continues to drop as it has for many months now, HBD could yield less and/or drop in price to under a dollar.

Sources:
https://hive.io/hbd/
https://peakd.com/hbd/@arcange/hive-debt-ratio-and-haircut-rule
https://www.hbdstats.com/

What I May Do With HBD

I am taking most of it out of Savings/Staking and may swap for something else while it is still worth a dollar. The Risk of less interest and/or lower prices is almost greater than the Hope of continued 15% interest and pegged price. For me, liquid HBD is where I want to be, right now, so I can make moves at any time.

NFA! DYOR!

Of course this is just my own thoughts, for my own situation. Everyone should do their own research. This is not financial advice!

Check my understanding of HBD by reading the sources I provided and any other ones one may choose to refer to. If others have other thoughts on HBD, feel free to respond to this comment!

Tips!

!ALIVE !PIZZA !BBH !UNI !LADY