Hive or HBD: what is your investment choice?
Hive and HBD are both part of the Hive ecosystem but the functioning and utility of both are miles apart. While Hive is the coin in the blockchain which allows you to stake it and as a benefit of staking, you get a say on the Governance of the Hive blockchain, curate authors in the Hive Blockchain and also get a little staking rewards for your staked Hive. Developers already coined up term for staked Hive i.e Hive Power so the benefits I mentioned above for Hive are not actually of Hive but are of Hive Power. Though on face value Hive and Hive Power are equal but main difference lies in the liquidity. Hive or Unstaked Hive or liquid Hive is always available to you to transfer and stake and do not earn any rewards while Hive Power earn rewards but if you need it for transfer then you need it to unstake it and it is 13 week long process.
Hive Backed Dollar in short HBD is a stable coin in the Hive blockchain and whose stability is guaranteed through the Hive Coin. Blockchain promises to peg HBD with $1 worth of Hive for 1 HBD (or Vice versa) but it takes 3.5 days and blockchain takes median prices of 3.5 days. But 3.5 days not an issue as you can use the internal market to buy or sell HBD using Hive without waiting for 3.5 days.
With the recent surge of the price in Hive, I again decided to take a look what should be the strategy.
Investing in Hive.
Investing in Hive or more specifically in Hive Power not only gives you say on the Hive Governance but also helps you to earn around 8% per annum as curation income and another 2% per annum as staking income. So if you 10000 Hive (power) on Jan 1, 2025, I expect you to have 11000 Hive (power) at the end of 2025.
Investing in HBD
Put your HBD in the savings accounts and currently it attracts 15% interest.
If you add 5000 HBD on Jan 1.2025 then I expect to have 5750 HBD at the end of the year.
Which is better?
Before going to decide on which is better, you need to understand Key difference.
Hive is market driven currency, so at end of year if Hive prices drop by 10%, you will be financially at loss in terms of Dollar value though you hold more Hive. But if at end of the year Hive is trading at 10% more then your profit on initial investment is now 21%. With HBD your profit is fixed at 15% on the Dollar value and you need not worry about the market volatility as it is stable coin.
Also Hive Power takes 13 long weeks (almost 3 months) to come into liquid form and it is really a long wait period while in HBD it takes only 3.5 days to get it to transfer back from saving account to your account. So Hive Power is more like a commitment to the blockchain instead of rinse and repeat scheme to get profits.
My take.
I will not say which is better and based on your need, you can take decisions. If you need stable monthly income, HBD interest is a good way to invest as interests are paid monthly.
If you have an appetite for risk and want to have skin in the Hive Blockchain then Hive power is a way to go.
HBD interest is more like bank interest but Hive curation income requires some effort to get it.
So it comes down to 3 factors mainly i.e risk, effort ,and commitment so choose your investments considering all of those three.
In my case, I am betting on future increments of Hive and do not depend upon my Hive income for expenditure so I go for Hive but it purely depend upon your requirement.
Posted Using INLEO
