Stablecoins have proven to be one of the major crypto use cases. Hive has HBD, a project that has been in existence in one form or another for more than seven years now. In all its existence it has worked as designed. During bull and bear markets. 

There is a lot of things to say about the HBD uniqueness and design. A layer one stablecoin, no freeze function, backed by crypto instead of dollars instruments, true decentralization, feeless, ideal for micro payments etc. 

I have been following HBD closely with various of posts and reports for years now. I have even built a dedicated website https://www.hbdstats.com/. 



 

![01.png](https://files.peakd.com/file/peakd-hive/dalz/23u5Z6uJfgK8qWayQbVgvdDThnW58qtRXXidhijK641CS51hsSqwDJgKsAu938qJ8qFni.png)




Ever since the introduction of the HBD interest, the debate about what should the HBD interest be is ongoing. There was even a twitter space a few months back, where blocktrades participated in. The HBD bonds have kept coming up in all the debates and has been pointed out to as a possible solution for the APR. Provide a different interest rate for different lockup periods. For example, 10% for a year, 20% for two years, 30% for five years, etc.

This is the inspiration for the HBD bonds experiment I’m trying to introduce here. Also the bond market is the biggest financial market in trafi so why not try and experiment with it.


## How Will This Work?

First things first. I will be managing the funds, and this is not a trustless project. By sending HBD you are putting trust in me to manage them and execute as stated in this post. I’m doing it out of curiosity and hope to learn some valuable lessons on the way, giving feedback for a possible on chain solution and maybe build and iterate in the future. 

### A 10% premium on top of the current 20% for a 90 day lockup

To make this project attractive enough it will be paying out a 10% premium on top of the current APR for the HBD in savings. It is currently at 20%, meaning a total of 30%, for a 90 day lockup. 

**Users will be sending out HBD to a dedicated account @hbd.bonds**. 

**The first bonds will be capped at 10k HBD.** 

Meaning the account will be paying the interest for the first 10k that it receives. The tranches are set to be in $1000 and $100. A 9 sets of $1000, and 10 of $100. Users can purchase more than one package, meaning a $1000, $2000, $3000, or $100, $200, $300, as long as they are in the amounts as stated above. Any funds that will be received with different amounts will be refunded back. Any excess amounts above the 10k cap will also be refunded. 

### Where Will the Yield Come From?

The old question where will the yield come from? The short answer is I will be making up the difference, investing the 10% premium. For a 10,000 HBD, the three months interest at 20% is 500 HBD, while for 30% is 750 HBD. So, I’m risking a 250 HBD to get this project going. Buyers will have a cost of the 90-day lockup and there will be a soft penalty for early withdrawal.

**Any buyer of the bond is free to request the funds back prior to the expiration period of 90 days. But in this case, there will be no interest paid**. The users will simply receive the HBD he/she putted in with no additional interest back. Any earned interest from early withdrawals will go towards the payouts of the premium for the users that will wait for the bonds to expire or reach maturity as it is known in the finance world. 

For simplicity a 1000 HBD will earn 50 HBD for three months with 20% interest, while with 30% interest it will earn 75 HBD. A 25 HBD more. 

Any user who asks for early withdrawal of funds will receive the funds between 24 to 84 hours (1 to 3.5 days). If there are incidental withdrawals I will cover up for early liquidity, but I keep the right to wait for the withdrawal period out of savings of 3.5 days in case there is a lot of requests for early withdrawals. 

Note on the 30% cumulative APR. I don’t control the base APR that is set by the witnesses of 20%. If this changes in the period, so will the cumulative APR. The 10% premium is guaranteed, so if the base APR is said 18%, the cumulative will be 28% etc. 


### Sale Period 

The sale will last until the bonds are sold, or a maximum of week and a half, starting from today November 15 and ending on November 26 (Sunday). The interest and the maturity will start calculating from the day the funds are sent. 

As mentioned, it is on the basis of first come first served. Make sure to send funds that are 1000 HBD or 100, or a multiple of those. This is an experiment, so the sale is small with a cap of 10k HBD. Also, I’m setting these batches of 1000 and 100 for easy management of small number of accounts, since it will all be processed manually. 

If in the sale period, the bonds are sold less than 50%, meaning less than 5k collected, I will be dismissing this project and return the funds back.

### Updates and Communication

I will post updates here, at the bottom of the post about the progress on the sale and when it will close, as I want to use the Hive blockchain as an official chanel. You can check the wallet https://peakd.com/@hbd.bonds/wallet for live updates and see if the 10k cap is reached. Still the official info will be here, since there might be funds refunded. Any request for early withdrawals needs to be made here in the comments, as official channel, and then additionaly users can contact me on discord as a reminder, user: #dalz3699.

After the sale ends, I will make another update with the list of the bond holders on the bottom of the post, the amount and the maturity date when funds and interest will be paid. If you participate in the bonds sale you might want to bookmark this post. 


## TL;DR 

Send funds in 1000 HBD or 100 HBD batches to **@hbd.bonds**, wait 90 days, receive 30% APR. Need the funds earlier than 90 days? No problem, just ask, and they will be sent back to you within day, but with no interest earned. 


### Final thoughts

I’m curious to see how this goes and is it viable for something like this to be built on top of HBD. The offered deal of 10% premium for a three-month lockup period is heavily in favour of the bonds buyers and I will most likely lose some funds in the process. But the sale is small and the difference not as big in absolute numbers. It is also a project that is not trustless, so a decent incentive is needed. On top of it I look at this mostly as a learning experience. Depending on the final result this might get reiterated with tweaks on the locking period (longer or shorter), the way the interest premium is set, etc.


There are further options that are available for the project to evolve in a future smart contract project removing the trust in me, a dedicated web etc. but let’s keep it simple for now. 

 
If you want to support this experiment **please join**, and let's start building the way forward for more finance on Hive!

@dalz
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-	UPDATE 1, Nov 16, 2023: After the first day, there is 3 bonds of 100 and one of 1000 bought. There are few statements from users that have pulled out of savings and will transfer funds after the withdrawals are funished. Follow the status of the sale live: https://peakd.com/@hbd.bonds/wallet
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-	UPDATE 2, Nov 20, 2023: After five days, there is 7 bonds of 100 and 3 of 1000 bought. This is 37% sold and its coming close to the 50% limit. Still waiting if some users are yet to withdraw out of savings and transfer funds, as few have suggested. Looks more feasible now. 

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-	UPDATE 3, Nov 24, 2023: **Bonds are sold out!** A week into the sale and the 10k HBD is full. Don't sent more funds. Will have a detailed updated soon.