Introduction
The Hive ecosystem is a decentralized and highly scalable blockchain network that supports various applications and use cases. A crucial component of this ecosystem is the Hive Backed Dollar (HBD), a stablecoin pegged to the USD.
In recent times, there has been a debate within the Hive community about the Annual Percentage Rate (APR) on HBD. Some argue for lowering it, while others, like myself, believe that maintaining a 20% APR on HBD is beneficial for the Hive ecosystem. In this post, I will outline the reasons for my stance and address some common counterarguments.
Image created by 
Attracting More Investors
A higher APR on HBD, such as 20%, is an attractive proposition for investors. It provides a way to earn a significant return on investment, which can lead to an influx of new investors into the Hive ecosystem.
https://twitter.com/hiro_hive/status/1653824442768695302
- hiro_hive
As I mentioned in my Twitter thread, a thriving community, innovative tokenomics, and a solid crypto foundation make Hive a potential candidate for substantial growth. Maintaining a 20% APR on HBD is one way to capitalize on this potential and attract more investors.
Counterargument: Does a 20% APR Make Hive Look Scammy?
One common criticism against a 20% APR on HBD is that it makes Hive appear scammy. However, I believe this argument does not hold water. For instance, HEX, despite its unsustainable and too-good-to-be-true nature, still attracts a significant number of users.
The key is to provide value and build trust with the community, and the Hive ecosystem has been successful in doing so. A 20% APR on HBD is a way to reward users and incentivize participation in the ecosystem, not a scammy tactic to lure in unsuspecting investors. It's Hive > Hex.
The Role of HBD and HIVE in the Ecosystem
It is important to understand the role of HBD and HIVE in the Hive ecosystem. HBD is a stablecoin, providing stability and acting as a medium of exchange. HIVE, on the other hand, is primarily used to create resource credits, enabling free transactions on the Hive blockchain. While HBD is backed by HIVE, every HBD transaction requires HIVE Power (HP) somewhere, making them interdependent. Maintaining a 20% APR on HBD not only incentivizes investment in HBD but also indirectly supports the value and utility of HIVE.
Conclusion
The Hive ecosystem is a dynamic and evolving space with a lot of potentials. Maintaining a 20% APR on HBD is one way to attract more investors and support the ongoing growth and development of the Hive ecosystem.
While there are valid concerns about the perception of a high APR, it is crucial to consider the broader context and the overall benefits it brings to the Hive ecosystem. As a supporter of this approach, I have adjusted my witness votes accordingly in favor of a 20% APR on HBD. I encourage others in the community to consider the arguments presented here and participate in the ongoing discussion.
