In recent days there is an interesting debate about whether to increase the HBD interest bill from 12% to 20%.
Some important witnesses like @themarkymark have changed their interest rate.
And that is the question I ask myself, yes or no?
I'm going to give my humble opinion that may be completely wrong.
Arguments for No
The main concern is whether it is sustainable over time or not. Raising the interest rate on the account to 20% would create inflation on Hive. This is a problem? I don't think so. Hive is currently deflationary, but I also don't think some inflation in the currency is a negative.
But how much inflation can it generate? I think not much. There are barely 24M of HBD and most are in the DAO without generating interest. In addition to the rest there is only about 3 million in savings.
So I don't think this will be a long-term problem, this same argument was already used when it went from 3% to 12% and I think we have all been able to see the results.
Another argument put forward is that it makes Hive less competitive within the chain itself. Hive 3%+8% vs. HBD 20%
I do not share this opinion. Hive is a more speculative growth investment and HBD a more conservative anchor. Although the two have shared risks.
The Arguments for Yes
For me the main argument for the Yes is marketing. It is not a financial argument at all but if Hive wants to grow it has to make itself known and be competitive against other chains.
This is the second argument competitiveness. There are other more competitive stablecoins and they are also considered safer. Official rates are rising strongly and by the end of the year they will be a competition.
Personally, I am already earning rates above 12% on P2P platforms and in some cases with a state guarantee or tax deduction.
My third argument is simple, although HBD is not a dollar but is referenced, 12% with 10% inflation is actually 2% interest. That's a reality that hurts currencies against inflation-resistant assets. That with relatively lower yields, they actually give much better results.
Well it's just my humble opinion, don't take it as advice or anything like that.