Direct from the desk of Dane Williams.
Continuing to address your most common questions about Hive's algorithmic stablecoin, HBD.
One of the most common questions surrounding Hive Backed Dollars (HBD), is where does the 20% interest come from?
We’re all taught from a young age that if something sounds too good to be true then it probably is.
But is that really the case here?
In answering today’s question, I went straight to LeoFinance’s resident HBD expert - 
Hopefully I’ve done his answers justice.
Seeing them remain technically accurate even after I’ve reworded them into something more… normie friendly.
(If not, no doubt you guys will jump into the comments section and set me straight! :D)
With that out of the way, let’s take a look at today’s batch of HBD FAQs.
Where does HBD’s 20% interest come from?
HBD’s 20% interest comes from the Hive blockchain’s inflation.
That being, freshly printed tokens.
This inflation used to pay interest on HBD in savings, is actually in addition to HIVE’s regular rate of new tokens being minted per block.
Keep reading! 👇
Is HBD’s 20% interest sustainable?
Yes, HBD’s 20% interest rate is sustainable.
While many consider inflation to be a dirty word, the reality is that the rate new tokens are created to pay interest on HBD savings is actually less than 0.5% on a yearly basis.
When you consider just how small our market cap is, this is an inflation rate that is more than sustainable.
Remember, for HBD to take its place at the table amongst the major stablecoins, it needs to increase its size 100x from here…
…and then some!
So I’d encourage you not to get caught up in interest payments being paid via inflation.
Furthermore, paying HBD interest via inflation in this manner can't increase inflation too much because for that to happen, Hive needs more HBD to be created.
More HBD created means that the price of HIVE should go up.
Then when that occurs, we would begin to see Hive’s inflation drop.
A phenomenon we saw play out in real time throughout 2021 when HIVE actually ended the year as a deflationary asset.
The bottom line is that the haircut rule and ultimately the amount of debt that the blockchain takes on is what regulates HBD.
As such, the APR paid out on top is actually insignificant to the sustainability of HBD.
What HIVE price will the haircut rule kick in?
For the haircut to kick in, the HBD market cap must rise above 30% of HIVE’s market cap.
You can check the live HIVE price that the haircut would kick in on 
But at the time of writing that price is 6.9c:
The acceptable debt limit is dynamic depending on the amount of HBD in circulation.
If HBD in circulation drops through conversions or buying from the stabiliser, so will this price.
For example at the beginning of 2022 we had 14M HBD and a floor price of around 17 cents.
Now we are at 9.7M HBD and a floor price at sub-7 cents.
Before compiling all of these together into the original Hive Backed Dollars (HBD) FAQs page, I’m just giving Google some more time to properly index all of this supporting content and links.
While these questions and answers seem fractured right now, please bear with me and just give Google a little more time before downvoting the shit out of these.
The end result of having HBD’s frequently asked questions showing up on Google will add immense value to the network.
Cheers and…
…best of probabilities to you.