Hive Inflation For August 2022 Is Half Then The Projected Thanks To Negative Conversions

This is a report for the Hive supply and inflation for August 2022.
August has seen a small uptrend in the price of HBD that has cause HIVE to HBD conversions. This type of price action happened in July as well.

Let’s take a look at the data!

The projected annual inflation for 2022 is around 7%, or 0.58% on a monthly basis.

The thing is Hive has a double currency system HIVE and HBD and there are conversions between them that add or remove HIVE from circulation on top of the regular inflation. Furthermore, there is HIVE in the DHF that is slowly being converted to HBD and also HIVE sent to the DHF is also converted to HBD. Because of this additional mechanics the HIVE inflation and supply can be drastically different in real time then the regular one.

To be able to follow the HIVE supply we need to take a look at all the different ways HIVE is created, author, curation, witness rewards, conversions etc, then net that out with the HIVE burned from conversions, accounts fees, null transfers etc. To get the virtual supply we need to do the same for the HBD supply as well.

HIVE Created

Here is the chart.

• HBD to HIVE conversions
• Curation Rewards
• Author rewards
• Staking Rewards
• Witness Rewards

All the above are paid as Hive Power or VESTS, except for HBD to HIVE conversions.
We can notice that the HBD to HIVE conversions are the dominant in the chart. Thing is this work both ways and a big part of them is converted back to HIVE, especially through the work of the stabilizer.

The regular inflation is around 60k HIVE per day. In August there was on average around 300k HIVE per day from HBD conversions, although as noted most of them are converted back to HBD.

HIVE Removed From Circulation

Here is the chart.

The above takes into consideration six different ways of HIVE removed

• Ninja Mined HIVE To HBD Conversions In DHF
• HIVE transfers to DHF and converted to HBD
• Transfers to null
• Null as post beneficiary
• New accounts creation fee
• HIVE to HBD conversions

We can notice the spike in the blue line at the end of July and August that represents the HIVE to HBD conversions. A total of 2.1M HIVE was effectively converted to HBD.

HBD Created

Here it the chart.

The above is a chart for HBD created without the conversions. It includes to following.

• 10% share of the inflation to the DHF
• HBD Author Rewards
• Interest payouts
• HIVE to HBD conversions
• Ninja Mined HIVE To HBD Conversions In DHF
• HIVE transfers to DHF and converted to HBD

Here again we can see that the conversions are dominant when it comes to adding a new supply of HBD.
The HBD created from HIVE transactions to the DHF are now dominant. This comes from the @hbdstabilizer.

The ninja mined HIVE conversions are also adding significant amounts of HBD in the DHF. Note that the HBD in the DHF doesn’t count as debt. We can see the spike in the HBD conversions at the end of July here as well.

HBD Removed

Now let’s take a look at HBD removed. Here is the chart.

HBD is mainly removed when converted to HIVE, but also with transfer to @null and setting null as beneficiary on posts rewards.

HBD is being converted to HIVE when the price is below the peg. In July on average there was around 122k per day converted to HIVE and again most of it is from the stabilizer.

HIVE Supply

When all the above is added and removed, we get this chart for the all-time HIVE supply.

Up until August 2021, the supply was almost steadily increasing with a small fluctuation. Then a huge drop in the supply in August and September 2021. An increase since then up until recently when we can notice the drop at the end.

HBD Supply

Here is the chart for the HBD supply.

The light color is HBD in the DHF.
After a months of downtrend the HBD supply is now starting to grow again. This is mostly because of the increase in the price in the last two months on a few occasions. This has caused HIVE to be converted to HBD and increasing the HBD supply from 7.5M to 10M that is now, excluding the HBD in the DHF.
The HBD in the DHF has slightly increased from 17M to 17.4M.
With this amount of HBD and the HIVE price the debt is now at 4.3%.

Virtual HIVE Supply

When we add the HIVE equivalent supply from the HBD in circulation to the HIVE supply we get the chart bellow.

When we zoom in we get this.

The light color is HIVE that in theory can be converted from HBD at the current market prices for HIVE.
We can see that the virtual supply fluctuates quite a lot, mostly because it is tied to the price of HIVE. As the price of HIVE increases, the virtual supply decreases and the opposite.

The virtual supply was quite constant in the month, with a drop at the end as the HIVE price started increasing.

Monthly Inflation

If we plot the monthly inflation, we get this.

The red is the HIVE only inflation, the light white VIRTUAL HIVE inflation.

The monthly inflation in August is 0.25%!

The projected monthly inflation is around 0.58%, meaning that the realized inflation is more than half that the projected one.
In terms of absolute numbers the HIVE supply has increased from 384.2M at the beginning of the month to 385.3M now, or a 1.1M HIVE inflation.

What is interesting that the inflation for the virtual supply is one the same level as the HIVE inflation, meaning that the increased HBD supply has not affected the overall inflation, mainly thanks to the price of HIVE.
The highest the monthly inflation has been is 1.54%, and on the low side it has reached negative -3.83% in September 2021. A reminder that these are monthly numbers, to get the yearly equivalent just multiply *12.

The yearly inflation, projected and realized looks like this.

Quite the differences in the past years between projected and realized inflation. Again mainly because of the HBD conversions. In 2019 and 2020 we can see that the realized is quite above the projected, while in 2021 the inflation is negative -2.7%.

2022 is projected at around 7% (0.58% monthly). For the first eight months of the year the inflation is at 4%, and it is set to go to projected level.

Net HIVE Created By Category

Here is the new HIVE put in circulation by category in August 2022.

We can notice the -1M HIVE removed with conversions in August 2022.
The curation rewards come on top in terms of HIVE created with 850k HIVE.

Net HIVE created in July 2022 1.1M.

All the best
@dalz

Posted Using LeoFinance ^Beta