20% APR from HBD will bring more investors
The crypto situation is getting a lot better in India. In the recent budget announcement, we have seen some good decisions made by the Indian government to embrace Crypto and slowly regulate it inside the country. As a good start, they have announced a flat 30% tax on the cryptocurrency capital gains. This is definitely good news but not all people trade and some people also invest.
The increase in APR can attract more investors from India because they can easily pay 30 % tax without hesitation if they can easily get 20% APR from a stable coin investment. This is a win-win situation for both the investor as well as the government. People who think about investment alone will not worry about this 30% tax as no banks in India offers anything above 8% interest. For ordinary people, we cannot expect any schemes that give more than 6 or 7% interest. These crypto-based APRs can be a game-changer and a good source of revenue even for the governments when people pay taxes.
Increasing HBD APR to 20%
If we can increase the APR of HBD from 12 to 20 percent, it will be very good because we can easily attract more investors from outside and this will also create more exposure for Hive. We have an internal market for Hive and HBD pair and as long as we get more investors for Hive who would be trying to convert Hive to HBD, we might get a better price for Hive and a high chance for Hive to pump. This is one of the primary reasons why we should focus on increasing the APR to 20%.
Apart from this, we all know the obvious reasons why the APR should be increased to 20%. The main reason would be to attract investors. There is no other platform that is decentralized and provides this much for on-chain staking. There are some private exchanges that give some attractive APRs but those are also not on stable coins. This is one of the biggest selling points I would say. The price of HBD will also have a better stabilization and can even stay above 1$ most of the time.
Increasing the lock period from 3 days to 30 days
30 days would be way more reasonable because we are anyways having an option to claim the interest every 30 days. The current lock period for HBD is only 3 days. We can withdraw the funds in 3 days. This is good for flexibility but I'm suggesting that it can be increased to 30 days only if we keep the APR at 20% or more than that. Obviously increasing the APR would call for trouble because it will also increase the inflation and supply of HBD. In order to keep that in control, it will be good to keep the HBD locked for a minimum of 30 days to get the interest paid out.
The calculation on the chain level should also be convenient if the lock period and interest claim period remains the same. Maybe they would have already thought about this but I'm not sure why this was not considered an option. People usually try to take the HBD out only if they want to invest in something when the market is down. Now with 30 days lock period, it can be a little challenging for short-term investors to make use of the market situation. That's definitely a small setback. But if we want some nice things to happen, there is no harm in sacrificing something else that is already good.
I'm able to see that many witnesses have already started updating their witness node to set 20% APR for HBD interest and I also see many people talking about the same. I have done my part by updating my witness account too. But I agree that this topic still needs a lot more discussion to make sure we are making the right decision.
If you like what I'm doing on Hive, you can vote me as a witness with the links below.
Vote @balaz as a Hive Witness
Vote @kanibot as a Hive Engine Witness
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