Why Keep HBD in Savings

Hive Backed Dollar or commonly known as HBD is one of the best StableCoin in the whole crypto space. So basically StableCoins are a type of cryptocurrency itself but their value is pegged or tied to another currency or financial instrument, in the case of HBD it is tied to Dollar. So that means the value of HBD will be in and around $1. When I say in and around $1, that means the price will fluctuate here and there but in the end, it will always remain close to the currency it is pegged.

PC: https://hive.ausbit.dev/hbd

There are different kinds of StableCoins in the market like Fiat-Collateralized and Crypto-Collateralized. The Fiat Collateralized StableCoins maintained their value pegged to fiat currency like the US Dollar and HBD is the type of Fiat-Collateralized. Then there is Crypto-Collateralized which is pegged to an existing digital currency for maintaining the volatility of that digital currency.

Why Invest in StableCoins

So now the big question people do ask is why should you invest or keep your money in StableCoins when it is pegged and its value is not going to rise. This is because crypto markets are volatile and in this volatility, you want to hold some coins whose values do not change much so in the bear market or in the bull market these currencies can give you a sense of portfolio balancing as well as giving interest on it.

Earn Interest Rate on StableCoin

There are a lot of StableCoins out there which provide interest on StableCoin, this is because the exchanges want the StableCoin liquidity and thus they need the StableCoins from the users to provide that liquidity and thus give interest rate on it. But most of the exchanges provides interest rate which is in the range of 6 to 12% as well as there is some lock-in period like 6 months to 12 months.

Why HBD Savings

We can earn interest rate but what if I say that you earn around 20% interest rate with 3 days of the lock-in period. Yes, you heard it right. Currently, HBD gives around 20% Interest per year if you save it in the HBD Savings with a lock-in period of only 3 days. So for example, if you save $50 per month for 5 years, the cumulative value of your investment would be

As you can see in the above image taken from Best Way To Earn Interest On Crypto if you invest 100$ per month and if the Interest per annum would be 20% then you will be getting around 9000$ at maturity. There are two decentralized conversion operations are designed so that HBD always remains to the $1 peg and they are HIVE to HBD conversion and HBD to HIVE conversion. These two operations always keep the price of HBD at $1USD with a tight margin.

If you would like to more know about HBD, then you can have a look at Introduction to HBD.