![](https://images.ecency.com/DQmYDQB5uiMJp7etNdWK7FfvTJdPXgM4L3ASK7GHJD5rgNC/image.png)

The main argument for raising the interest rate for HBD, in the past, was that the supply of HBD was very low. It is still low, even at 20% it may take years for HBD to have a considerable supply, unless people convert in mass HIVE to HBD.

We had a good timing at HIVE, we raised interest rates when countries all over the world started raising interest rates, we were not left behind at the global interest hike and we had the means to back the offer! That kept Hive, as a platform, interesting for investors even during the bear markets.

According to the [Hive Dollar Monitor](https://hive.ausbit.dev/hbd) HBD is still under 6% of the HIVE market cap. With a market cap still under 10 million, HBD still has a lot to grow.

![](https://images.ecency.com/DQmc8q2P1bbytinPfdk44vPEsFpJ8829B86E2jVbsuRe2ty/image.png)

But a high interest rate on HBD, that could possibly put a sell pressure on HIVE. HBD is a "safe"(kind of) investment compared to HIVE and HBD is backed by HIVE, so with a greater market cap comes a greater responsibility, that of backing all those printed dollars.

Governments all around the world are already discussing slowing down the hike on interest rates, some have stop raising interest rates, and some (such as Brazil) started discussing lowering the interest rates. With lower interest rates, stocks, and more risky investments, will become attractive again, and HIVE needs to stay attractive to back those HBD. When you think of HBD you still need to consider the value of HIVE behind it, to avoid a collapse (which we seem to be very resilient against, even during the worst times!)

So I am lowering my witness APR from 20% to 18% just to try to stay ahead of the curve. It is not a big change, just lowered 2%, the impact is negligible, specially as I am a small witness. 

Some top 20 witnesses vote for interest rates as low as 7%, which to me is too much of an abrupt change!

It is unavoidable, we are a small blockchain, and as governments and institutions, that are massively bigger than us, start lowering their interests we will have to do it too, so I vote for starting it slowly and now, to see how the market reacts.

Don't get the situation wrong, Hive is a small ecosystem with small market caps, it is not as if our financial decision have great impacts because we are a small community, we grow step by step, user by user. But also we need to follow the trends and not be left behind at a global perspective. 

I am voting for an 18% interests rate, but even if we go lower, say 15 or even 12% we will still be one of the top DeFi platforms with the best APR offer out there! 

7%, as some witnesses are setting their APR at, may be too low currently, but as global interest rates start to lower maybe even that may be competitive, specially if inflation gets tamed. So we need to start planning ahead and taking action to stay competitive in most aspects.


Does my idea make sense to you?
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