HBD 6% APR! What about SURGE?

There’s been an interesting rumor on the Hive platform about an adjustment of the APR on HBD savings. Currently there is 15% APR from HBD savings. That’s one of the strongest on-chain stable yields anywhere in the market. That rate has played a huge role in keeping HBD attractive, useful, and largely embedded in how many people in the Hive platform view their stake/liquidity.

However the rumor going around is that the APR could be reduced to 6%. It’s not an announcement -- nothing on-chain, nothing confirmed, nothing formal. But the whole point is that the conversation itself has raised some concerns to me because of how central HBD is to the development of Hive as an ecosystem. And frankly, lowering from 15% to 6% irritates many users for pretty obvious reasons.

If this were ever to happen it would be a massive transformation in incentives. After all why would people keep massive amounts of HBD in savings accounts for only 6% APR when most traditional banks (yes the traditional banks we usually cast as enemy) are now offering similar or even better rates on simple fiat savings accounts? The only thing HBD has to offer other than stability was its reward advantage and removing that would definitely affect the market.

But while this rumor of this HBD rate potential rate reduction is going around people are not paying attention to something already on the chain: SURGE, a product of LeoStrategy.

It is not a stablecoin. SURGE is only "stable-adjacent" saving instrument in that every SURGE has a price where the price is always at roughly $1, with a hard liquidation floor at $1, and no cap on the upside. So the upside will always be open but the downside will be protected. Thus you have the option to make profits if the price goes up and it will pay you a steady return.

On top of that, SURGE is paying 15% APR fixed rate payout weekly. An approx $0.15 per SURGE/per year. And unlike HBD’s APR, which is arbitrary and subject to governance veteos at any time, SURGE yield is fixed and permanent. For investors that rely on steady, stable , and high returns over a long period of time, that in itself is highly desirable.

If the HBD rate ever got cut, even hypothetically, there would be a lot of people who would look for alternative ways to get a good return on their savings. And SURGE already fills the gap, it has high return, moderate price stability (about $1), protection from downside, and potential upside, which is why it is actually more appealing than a typical stablecoin model.

I didn't write this post to promote any thing or recommend a product. I am just making clear what many Hive users already know but often overlook. In the light of all the rumors and the influx of information it’s only right to point out where there are other options available on-chain, especially ones that I am sure would be relevant if any changes to HBD savings ever occurred.

For now, nothing is confirmed; but just by the rumor I see it's worth noting that Hive users already have more than one way for yield, depending on what happens.

Posted Using INLEO