When I first joined Hive back in the September of 2021 it was due to the game Splinterlands. At the time I didn't realize that posting and blogging was really the most useful part about the platform, fortunately, I was introduced the this part of Hive thanks to the need for more Resource Credits to rent out my cards in the game. I then began blogging to earn Hive and increase my Hive Power in order to have more Resource Credits. I soon found myself addicted to engagement with other members here on Hive and have been blogging ever since.
When I first started out, I really didn't understand the mechanics behind the Hive ecosystem and what makes it so special. To be completely honest, I really didn't get serious about understanding things until just over a year ago, it was a real eye opener. I recall that in January of 2025 Hive climbed all the way up to sixty cents and I think we were all on top of the world at the time. Of course this is nowhere near the all time high of over $2.50 back in November of 2021. All cryptocurrency was booming at the the time, but nothing good can really last forever and the cycle took a downturn.
What does all of that have to do with Hive today? If we look at the Hive price it's pretty simple to understand, we are struggling to hang onto six cents right now due to Hive inflation. This comes from various sources including author and curating rewards, HBD interest paid out to those who stake it, and funds passed out by the DHF to proposals that have been approved for funding. Every HBD that is handed out is backed by Hive thus creating a debt. Most of you will recall that recently posts stopped paying out author rewards in HBD and HP? That occurred because the debt exceeded 20%, it was an automatic algorithm incorporated into the coding behind Hive. Below you can see the current HBD stats and debt at 23.67%:
From https://www.hbdstats.com/
So what happens when the debt surpasses 30%? The result is the loss of the peg of HBD to one dollar, in essence, nothing good. We're only 6.3% away from that event and that should have us all very concerned. Reductions in HBD passed out need to happen. One smart way to do so is cut the APR of staked HBD to a more reasonable level, but that hasn't been done by the top twenty witnesses. There was a cut to 14%, but more is needed.
What can we all do as Hive investors you might ask? We all need to vote for the Return Proposal. The Return Proposal is the threshold level of votes that a proposal must pass in order to be funded by the DHF. The more votes it has the better, even if you only have a few hundred or few thousand HP that can make a difference in what passes and what doesn't. I personally have pulled all of my support for any DHF projects except the return proposal because we simply cannot afford them. We are getting dangerously close the the cliff at 30%.
Additionally, the more HBD that gets converted to Hive increases Hive inflation. The more Hive that exists the lower the price becomes. Below you can see a graph of Hive inflation over time showing the projected inflation in light or white colors and the actual in red. It really hasn't looked all that bad until recently, however, the latest realized Hive inflation number is huge. It's due to low Hive prices as more is produced for authors, curators, and HBD being converted to Hive.
From Dalz's post
Now let's look at the Hive charts to see what all that means in prices for all of us. The first chart is Hive year to date with a decline from over a dime down to six cents. Even when BTC sees a huge rally we aren't seeing a robust recovery due to the inflated Hive numbers.
Coingecko.com
And here is the chart for the last year, showing Hive at around $0.25 just last year, but if you go back just a few months it was at $0.60. It's not a great trend as can be easily seen.
Coingecko.com
Does all this mean doom and gloom for our beloved Hive chain? It doesn't have to if we all do our part to help reduce the increasing of debt. I implore all of you to please vote for the Return Proposal, even if you only have a few hundred HP is could make a difference. If we all vote together we can make a difference and ensure a brighter future for Hive!
I personally enjoy the friendships I've formed with so many of you, sadly, many have vanished over the last few months powering down completely and walking away. I don't want to see that happening anymore, Hive needs as many active members as possible. Things have been getting rather quiet lately from what I've seen, and I find that rather sad...
That will end my sermon of the day, but please make sure you have voted for the proposal. I really don't want to see Hive hit that 30% debt level, and I would like to see Hive continue on for years to come. It would also be nice to see some better Hive prices in the future as well!
Please feel free to leave any comments or questions below. I'm sure many of you have a far deeper understanding of the tokenomics that I do and please feel free to sound in, and even correct anything I may have gotten wrong! Thanks everybody for all of your support, I really do deeply appreciate it! Have a great weekend everyone!
References:
https://www.coingecko.com/en/coins/hive?chart=type%3Dprice%26mode%3Dline%26timeframe%3Dd365
Disclaimer
I am not a financial planner and this isn't financial advice. Please always do your own research before investing your money. You worked hard enough to earn it!
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