This is a report for the Hive supply and inflation for November 2022.
November has been one of the worst months for the crypto markets because of the FTX collapsed. Crypto has lost billions in market cap and valuation. Bitcoin has dropped to 15k levels. The HIVE price ha also dropped from 0.48 to 0.32 at one point. At the moment it is around 0.36 USD. HBD has also dipped under its peg for a moment, and this has triggered HBD to HIVE conversions, contracting the HBD supply while expanding the HIVE supply.
Let’s take a look at the data!
The projected inflation for 2022 is around 7% on a yearly basis, or 0.58% on a monthly basis.
The thing is Hive has a double currency system, HIVE and HBD, with conversions between them that add or remove HIVE from circulation on top of the regular inflation. Furthermore, the decentralized hive fund DHF, that serves as a DAO removes the HIVE in the and also HIVE sent to the DHF is also converted to HBD.
Because of this additional mechanics the HIVE inflation and supply can be drastically different in real time then the regular one.
To be able to follow the HIVE supply we need to take a look at all the different ways HIVE is created, author, curation, witness rewards, conversions etc, then net that out with the HIVE burned from conversions, accounts fees, null transfers etc. To get the virtual supply we need to do the same for the HBD supply as well.
HIVE Created
Here is the chart.
The chart above includes:
- Author rewards
- Curation rewards
- Witness rewards
- Staking rewards
These are the regular ways new Hive enters circulation, and all of them are through vested HIVE.
Thing is the conversions are playing a major role in the ecosystem. Here is the chart again, including conversions.
We can notice that the HBD to HIVE conversions are the dominant in the chart. Thing is this work both ways and a big part of them is converted back to HIVE, especially through the work of the stabilizer.
The regular inflation is around 65k HIVE per day. In November there was on average around 500k HIVE per day from HBD conversions, although as noted most of them are converted back to HBD.
HIVE Removed From Circulation
Here is the chart.
The above takes into consideration six different ways of HIVE removed
- Ninja Mined HIVE To HBD Conversions In DHF
- HIVE transfers to DHF and converted to HBD
- Transfers to null
- Null as post beneficiary
- New accounts creation fee
- HIVE to HBD conversions
The HIVE transfers to the DHF are now dominant. These are transfers made by the stabilizer. We can see a few spikes in the HIVE to HBD conversions back in August and one smaller one in September. These were due to the increase in the HBD price.
HIVE Supply
When all the above is added and removed, we get this chart for the all-time HIVE supply.
Up until August 2021, the supply was almost steadily increasing with a small fluctuation. Then a huge drop in the supply in August and September 2021.
In 2022 we can see a small drop in August because of the increase in the HBD supply and an increase in the last month because of the opposite trends.
HBD Supply
Here is the chart for the HBD supply.
The light color is HBD in the DHF. This is not freely circulating HBD and only enters circulation when payouts to the DHF workers are made.
HBD is being created and removed in a various ways, but the conversions play the major role here in the both directions. Other ways HBD is created is DHF proposal payouts, author rewards and interest.
Overall, the HBD supply has went down in 2022, with some spikes in August when the HBD price increased. A sharper drop in the last month as well.
At the beginning of the year there was more than 14M HBD in circulation and now we are at 8.5M.
In the last month the supply of HBD (excluding the DHF), contracted for around 1M from 9.5M to 8.5M.
Virtual HIVE Supply
When we add the HIVE equivalent supply from the HBD to the HIVE supply we get the chart bellow.
When we zoom in 2022 we get this.
The light color is HIVE that in theory can be converted from HBD at the current market prices for HIVE.
We can see that the virtual supply fluctuates a lot, mostly because it is tied to the price of HIVE. As the price of HIVE increases, the virtual supply decreases and the opposite.
In the last month the virtual supply has increased because of the drop in the HIVE price.
Monthly Inflation
If we plot the monthly inflation, we get this.
The red is the HIVE only inflation, the light white VIRTUAL HIVE inflation.
The monthly inflation in September is 1.08%!
This is the highest monthly inflation for the year.
The projected monthly inflation is around 0.58%, meaning that the realized inflation for November is double than the projected. On a yearly basis Hive will end up at the projected levels.
In terms of absolute numbers the HIVE supply has increased from 388.7M at the beginning of the month to 393.1M now, or a 4.4M HIVE inflation.
A reminder that these are monthly numbers, to get the yearly equivalent we need to add the monthly ones.
The yearly inflation, projected and realized looks like this.
Up until November the yearly inflation for 2022 is at 6%. With one month to go the year will probably end somewhere around 6.5%, that is slightly lower than the projected one. This will be a great achievement having in mind that 2022 is a bear year, and HBD has been converted to HIVE throughout the whole year.
If we take a look a the previous cycles we will see that during the bear years the HIVE inflation was higher than the projected one, for example in 2019, 8% projected and 12% realized.
Net HIVE Created By Category
Here is the new HIVE put in circulation by category in November 2022.
The conversions are on the top with 2.2M HIVE created from conversions in November. Next are the curations rewards.
Net HIVE created in November 2022 =4.4M, or 1.08%.
We can see that the HIVE supply has increased a bit, but having in mind the market conditions, these are still small numbers. On the positive side HBD has contracted quite a bit, and there is not much left, outside of savings. Things should settle going forward, of course if no major disruption happens.
