HBD, and Hive by proxy (more about it below), has an issue that everyone would like to have:
It is way too attractive
I am writing a bit about the paradox of HBD attractiveness. There is no solution for it, as far as I know, all tools to deal with the peg have upsides and downsides. Hopefully by understanding it you can choose what solution you prefer, and so think about it and support it mindful of the pros and cons.
HBD was designed to stay at $1, and if it is above, like it is now there are tools to try and control the price surge:
The sweet problem comes exactly from the inflation being attractive! And it is a good problem for both HBD and Hive.
As the price is above, and the APY is high, people keep buying HBD to put it on savings. The savings has a high APY to try and print more HBD and try to push the price down. Because HBD is supposed to be worth $1 people keep buying to save and get the yield and have more dollars!
This becomes a cycle, one I don't dare breaking, I like the ride. The solution to break this cycle would be to, counterintuitively, REDUCE DRASTICALLY the HBD yield, so that people would not want to save it and would sell, driving the price down. That solution too might not work, because by reducing the yield, it would reduce the printing rate and the demand might keep pushing the price higher!
The benefit for Hive comes from the fact that HBD is hive backed, so people, by converting, can use Hive to print HBD, and when the Hive is burned in exchange of HBD, it drives Hive price higher!
Like I said, I wouldn't dare to break this cycle as it is a good problem to have.
The current printing rate is at 10% a year. I say we raise it to 12% to ride the wave. Raising the yield will attract investors and developers. The downside is that yes, it will increase the demand and will further the HBD price from $1 temporarily, but the benefit of riding the momentum could be on the long term! More brains and more development!
As a witness, I am already voting for a 12% inflation rate.
If you understand the paradox of the HBD yield, and still support increasing the inflation rate, consider voting for me as your witness!
