It may sound degenerate, like straight out of Wall Street Bets level of degeneracy, but I love that HBD has a 7% a year interest rate.
Why mention specifically WSB and the term "degenerate"? Because they (or someone similar) came up with a term "DeFi degenerate", which is someone that "abuses" (well, if it was built like that is it really abusing?) the system for profit.
Many people see Hive as a social network, but not many view the potential for descentralized finance (DeFi), and although some new solutions are being built on top of Hive (like @luckdao of my own, started last Sunday, so keep expectations low, or better, have no expectation), Hive has a built-in blockchain DeFi system! Which is both the native exchange, and the HBD interest rate!
In this case, the HBD 7% yearly interest rate is easily abused. We all know that money can not possibly be printed out of thin air, not even if you are a government. So HBD is backed by Hive, and you can print Hive to back the HBD peg to the dollar in expense of Hive price (well, all according to economy manuals at least).
From the point of view of the best interest of the Hive token, 7% a year HBD interest rate is terrible, witnesses should reduce it ASAP! But... From the the point of view of an user... It is a great deal... Hive has an over 100 million market cap to back HBD 7% a year inflation, so as an user it is a very very tempting offer, and one I am taking.
Hive backs HBD with Hive, so when HBD is down, you can convert it to Hive for a profit (it has it's risks but that is how it works to put simply), so I know that I can sell my Hive, hold HBD, and Hive will keep backing the 1:1 peg IN EXPENSE OF HIVE MARKET CAP as long as someone is doing the hard work of burning HBD for Hive, and someone else is buying that Hive and HBD. As long as people just use the system as it was designed to be used I can sit down and relax and earn passively from their work.
I could use the conversion system to burn HBD and profit in Hive, but I want to cut down risk and not be exposed to Hive price fluctuations, even if it has a huge upside potential, it just means my HBD have a better tether.
So, if the system is there, and the potential is there, why not use it?
