Interest on HBD savings does a couple things that Hive needs. It reduces the curation rewards that staked Hive sucks out of the rewards pool because it's an alternative place to gain ROI than curation, and this increases author rewards commensurately. This has two beneficial effects. First, it decreases financialization of curation, and thereby increases the subjective valuation of content, which is the actual purpose of curation. Second, since author rewards aren't based on staked Hive, reducing curation rewards as a percentage of the emission of inflation from the rewards pool increases the distribution of Hive, increasing decentralization.

I agree about hivewatchers. The purpose seems to be to prevent the growth of users on Hive, ensuring Hive doesn't attract outside investment from folks that could buy Hive's entire market cap for lunch money and replace the current oligarchy that rules Hive. Hive governance is a pure plutocracy. Each Hive token is a vote for witnesses, and controlling the witnesses controls how the rewards are disbursed from the pool, and this enables that oligarchy to extract the majority of rewards. Steem proved that outside investors can simply take control of Hive by buying it, and our oligarchy can't compete financially with sharks seeking profitable investments. Keeping Hive from growing is the primary security they have to defend their ROI.

"...proposals; that's a side issue..."

I disagree. The DHF is basically Hive's cash on hand. The proposal system enables the oligarchy to extract the funds from the DHF, and mine the cash on hand like hostile takeover funds do corporations they buy. KKR and Bain Capital Partners typically buy a controlling interest in a company, fire all the employees, sell off the tooling and anything worth money, and suck up all the cash to make a quick buck before abandoning the company and moving to the next target. The fact the DHF is hemorrhaging money indicates the oligarchy is in process of stripping the cash on hand and selling it off for fiat, preparing to abandon the shriveled husk of Hive and move on to new pastures.

Particularly since I was told on chain by guiltyparties that receipts would absolutely not be provided for Value Plan's expenditures in Venezuela, despite accusations of fraud and kickbacks from people that claimed to witness those crimes, I think it's obvious the DHF is being mined for quick cash before someone that's witnessed the fraud calls tips.fbi.gov and ends it. Things could get a lot worse for the scammers if the State Department gets involved, because they're very interested in Venezuela. This constant hemorrhage of funds from the DHF is what is crashing the token price, because demand isn't keeping up. The more Hive they sell off the lower price they get for selling it off, and they seem to be trying to keep the price at $.2 or so, but it's 10% below that now and these profiteers can just dump and slink off at any time.

The Hivewatchers scam is hard to prove. The DHF mining isn't. That's why I think it's a sign of the final phase of the Hive oligarchy's scam. I vote the return proposal, but I'm barely a dolphin and that doesn't impede the oligarchy when they want to ram through a kickback vector. 4 accounts hold ~30% of Hive, and a couple dozen whales have the majority of stake. There's not much the rest of us can do about whatever they want to vote for, because Hive's a plutocracy where tokens are political power.

Thanks!

Edit: I didn't point out a purpose of the interest rate paid on HBD, that is actually too low from my perspective, in response to your statement:

"The insane HBD interest rates have been bothering me for some time."

Curation rewards are potential to attain ~23% ROI. While the interest rate on HBD of 20% was, in my estimation, nominal to enable substantial investors to attain ROI, despite being lower than that potential to curation rewards because that interest was attainable without the necessity of curation (which is very time consuming if done with care), 15% is a full 8% less than curation rewards. I believe investors exercising prudential management diligently will prefer curation rewards for this reason, and additionally attaining to curation rewards also, because it depends on staked Hive, rather than HBD, then also creates the ability to use that same stake to vote witnesses and reduce the ability of the majority of Hive users to affect governance due to their lesser stakes.

For those most diligent prudentially, even that 3% difference would cause them to prefer curation rewards as the means of attaining ROI in their investment, and the control of Hive governance is another return on their investment that recommends curation rewards over HBD savings to them. These issues require that substantial interest rate to reduce the derangement of curation by financial interest, and interest in governance, to attain the simplicity of ROI with the interest on HBD. Further the inflation of the dollar was ~9% when this HBD savings mechanism was established, which dramatically reduced real ROI by that function. At 15% HBD savings interest when confronted with 9% inflation results in only a 6% gain, which, while far greater than commonly available through commercially available investment vehicles, such as CD's, bonds, or savings and checking accounts, was easily surpassed by inflation aware mechanisms such as stocks, and others, that returned more than 6% to investors.

It is in the interest of the entire community that Hive attain to wider distribution, in order to diversify governance, wealth, and curation, and also to reduce the derangement of curation by purely financial prudence that has nothing to do with societal values far more substantial, but are commonly neglected by folks focused on financial prudence to the exclusion of other interests.

For these reasons the 20% interest rate is essential to HBD savings, and even 15% does somewhat provide (while 25% would be quite compelling and better attain these benefits to Hive). Finally, Hive has room to pay substantially higher interest on HBD savings at current valuations, so that interest rate is sustainable until token price decreases to single digits, which I do not foresee, but is certainly possible. For the stated reasons of widening distribution, it is also more than valuable enough to justify. In that event Hive will undertake a 'haircut' that resolves HBD printing and interest on HBD savings to prevent issues that other blockchains have suffered to their detriment, even their demise, being unequipped with the tools Hive has to prevent such burdens on their tokens.