The supply of a coin is quite an important thing. Also, its inflation. A very common question about a project is what it is supply?
As many things around here the HIVE supply is a bit special 😊.
Let’s take a look!
If you take a look at the other coins, let’s say Bitcoin, the supply and the inflation over time is pretty simple. There is a certain amount of tokens circulation, inflation level set, and the supply keeps increasing over time. Usually in time the inflation drops.
However, as many things on Hive this is not that simple.
The reason?
The main reason would be the dual token economy with HIVE and HBD, and the conversions between this two. HIVE has its stablecoins, that in a sense its maybe before the time, since we are now seeing a lot of stablecoins popping out and the defi movement is partially evolving around them.
The current Hive inflations allocation is as follows:
- Authors 32.5%
- Curators 32.%
- Witnesses 10%
- HP holders 15%
- DAO/DHF 10%
Inflation shared in five pools.
One would thing if we track the above (five pools!) it will be sufficient to get the history of the HIVE supply. But no. To get the complete picture we need few more things:
- HBD conversions to HIVE
- HBD supply and its virtual supply to HIVE
If we head over to https://hiveblocks.com/, at the moment we will see this
374 million HIVE in circulation and 4.6M HBD. When converted at current price this 4.6M HBD ads around 40M more HIVE on top of the supply to a total of 415M virtual HIVE supply. Try explaining this to the coin aggregators like CMC or Coingecko 😊. This virtual supply is changing daily depending on the price of HIVE.
Note: I want to emphasis that the data bellow is kind of revers engendering the supply. I have taken the current numbers for the supply and extracted all the inflation from the rewards back to the starting point. It is most likely not a 100% accurate, but its shows the overall picture.
Let’s dig into this!
HIVE Authors rewards
Here is the chart for the all-time HIVE authors rewards.
Authors receive rewards on HIVE in three currencies. Liquid HIVE, Hive Power and HBD. The chart above represents the authors rewards in HIVE and Hive Power. HBD rewards are not included. The HBD supply will be analyzed separately. One can say just double the numbers above and you will get the total authors rewards. This will be close enough, but we will take a look at the HBD conversions in more details.
A total of 40M HIVE and Hive Power rewarded to authors since inceptions. The period for the previous version of Hive, also included. If HBD rewards are included this number will be virtually double. But users don’t convert HBD to HIVE instantly when they get the rewards, so this math is a bit of.
We can notice a flattening in the authors rewards towards the end of the chart, mainly because of the switch from 75/25 to 50/50 split in authors/curators share.
Curation rewards
The chart for the curatio rewards looks like this.
Luckily curation rewards are earned only in one currency, Hive Power, so things are a bit simpler here. I have kept the axis scale for the chart on a same level as for the authors rewards for better comparison. A total of 25M issued to curators.
Witness rewards
Currently 10% of the inflation goes to witness.
The witnesses have received a total of 16.7M HIVE.
Staking rewards
Hive Power holders receive staking rewards for holding HP. Their HP is increased each day by a very tiny amount. The current APY for HP staking rewards is around 3.4%.
A total of 17M have went to staking rewards and HP holders. The staking rewards are around 10k HIVE per day. Now the interesting thing is that they are generated from the HIVE per VEST ratio and not with a hard transaction so to speak.
HIVE from HBD Conversions
HIVE can be generated by HBD conversions as well. When HBD is put in conversion its being destroyed in a period of 3 days and the average price is taken from that period when HIVE is printed.
This is quite interesting. A lot of HIVE has been generated trough conversions. Authors that receive their rewards in HBD are converting a lot of it. Especially in the last period.
A total of 61M HIVE has been put in circulation from HBD conversions. If we compare this with the total author rewards of 40M, we can see that more HIVE has been generated in this way. The low price of HIVE is basically generating more inflation trough HBD conversion.
HBD Supply
Now let’s take a look at the HBD supply.
HBD is put into circulation trough author rewards and from recently from the DAO/DHF. At the same time, it is been taken out of circulation with conversion that we saw above. Because of this the supply of HBD can go up and down.
From the chart we can see that historically the HBD supply has been highest when the prices for HIVE were high. A 15M HBD at one point. When the prices were mooning in January 2018 on a few occasions there is more than 100k HBD printed per day. Nowdays the rate of printing HBD is much smaller at a rate od 3 to 5k per day.
Actually, if we take look at the HIVE market cap of around 40M and the HBD supply od 4.6M, the debt is more than 10% and HBD should be stop printing. But the blockchain most likely is taking a different HBD to HIVE ratio then the market and its still printing HBD.
If we convert the HBD to HIVE we will get the following.
Interesting the virtual HIVE supply from HBD is at a highest point these days. This again is because of the low HIVE prices, and we can see the sharp increase in the virtual HIVE from HBD.
Historical HIVE Supply
If we combine all the supply generated from the rewards and the conversions above we get this.
As mentioned at the begging the chart is generated from the current supply and then extracting the rewards back to the starting supply.
| Category | HIVE |
|---|---|
| Authors | 40,358,132 |
| Curators | 25,279,110 |
| Witnesses | 16,723,110 |
| Staking | 17,294,091 |
| HBD Conversions | 61,051,016 |
| Total | 160,705,459 |
A total of 160.7M HIVE has been added. When we extract this from the current supply of 374M, we are left with 213.3M HIVE to start. This is roughly the supply that was mined at the start, when Hive, then Steem started. There were a few months mining back then and the stake above is probably generated in that period.
If we add the virtual HIVE supply from HBD we get this.
More than 400M HIVE in circulation including the virtual supply.
At the end one clean chart for the HIVE supply 😊.
I’m planning to use this chart going forward to plot the share of historical HP in it as well.
If we extract the start year supply, we get this:
| Supply | HIVE generated in the previous year | |
|---|---|---|
| 01.1.2017 | 243,000,000 | 243,000,000 |
| 01.1.2018 | 264,000,000 | 21,000,000 |
| 01.1.2019 | 292,000,000 | 28,000,000 |
| 01.1.2020 | 335,000,000 | 43,000,000 |
| 10.11.2020 | 374,000,000 | 39,000,000 |
In 2019 the real HIVE inflation is 43M. This is 14.7%. The projected inflation for 2019 was around 26M and 8%. 2020 is not over yet but the absolute numbers will most likely be somewhere around 45M, or more than 13% inflation, compared to the 26M projected at 7.5%.
This is the weight of the pump from 2017/2018. Large amounts of HBD was generated then at it is benign converted in the last years increasing the projected inflation by almost double. The good news is that HBD is generated in very small amounts now and its supply it is at reasonable level.
