The acronym APR means "annual percentage rate." I believe that HBD interest compounds monthly; so the APR is higher than 20%.

Personally, I think that high HBD interest is reducing the price of HIVE. The algorithm uses the market value of HIVE to guarantee the HBD Astute investors are wary of the long term impact of the high interest rate. It is like a self inflicted wound.

The internal market is the primary market for HIVE. Users receive their post rewards in HBD. Many would buy HIVE. They would then do things like transfer the funds to Hive-Engine, power up or possibly withdraw the funds for sale on an external exchange.

With the high interest rate, a large number of users are simply transferring HBD to savings and are no longer buying HIVE through the internal market.

Currently the interest on HBD is relatively low. The system doled out 35,000 HBD in interest in April. This amount will increase exponentially and will soon be several million a year. The primary mechanism for selling this coin will be to convert into HIVE and dump it on the market.

It is likely that the witnesses are repeating the circumstances that lead to the collapse of UST.