Direct from the desk of Dane Williams.
A look at the various scenarios around if and when you should power up HIVE.
Powering up (staking) your HIVE, allows you to earn 10% from curation rewards and 3% from simple inflation.
An extremely attractive return, alongside all the security and governance benefits that come along with taking a stake in the network.
But with the ability to earn a higher return on your HIVE elsewhere, I keep seeing people asking if and when they should power up HIVE.
In this post, I take a look at the various scenarios you need to run through in your mind before deciding when is the right time for you.
Scenarios for when you should power up HIVE
Deciding when you should power up HIVE, revolves around the following two main factors:
- Your desired HIVE holding period.
- Where you view the price of HIVE moving.
Remember, by powering up your HIVE, you’re essentially locking your tokens away for 13 weeks.
Powering down takes 13 weeks to complete and while it’s running, you’re only given back access to 1/13th of your tokens each week.
That means that your first consideration around powering up your tokens must be the time you’re willing to forfeit access to them in their liquid state.
You have to be comfortable with not having access to your HIVE for 13 weeks and have the foresight to plan your eventual power down, essentially 3 months in advance.
Only power up your tokens if you’re comfortable holding for this period of time.
If the 13 week power down period is okay for you, it’s then time to then consider price.
If you think the price of HIVE is going to go up
Are you bullish on the price of HIVE?
If you think price is going to rise, then now is the time you should power up your HIVE.
By powering up, you will not only earn the 13% APR on your single asset stake, but you will also be able to take full advantage of HIVE’s rise in price.
In this era of DeFi popularity where degens chase unsustainable returns on assets that are obviously going to zero, powering up HIVE is extremely underrated.
HIVE Power was DeFi before DeFi was a thing:
If you think the price of HIVE is going to go down
But what if you’re bearish on the price of HIVE?
If you think price is going to fall more than the 13% APR you will earn by powering up, then you shouldn’t power up your HIVE.
In this scenario, you want to gain some protection from any downward price movement and be paid a higher APR for doing so.
This is where wrapping your HIVE into bHIVE on BSC and then placing it into the bHIVE:bHBD LP on Cub Finance becomes your ideal move.
By pooling your bHIVE with the stable bHBD, you’re protected against downward fluctuations.
What ends up happening when the price of HIVE falls, is that impermanent loss causes you to essentially just continue DCAing into a bigger HIVE position.
All while keeping your exposure under check thanks to the HBD stablecoin side of the LP.
Not only are you protecting yourself from downside price fluctuations, but you’re also earning a higher APY than if you were simply powered up:
Final thoughts on powering up HIVE
As long as you know your desired holding period and can make a call on where you view price moving, then you have the answer to whether you should power up HIVE.
In my personal opinion, HIVE is a good investment and is set to break out to the upside in 2023.
When you dig a little deeper into other cryptocurrencies, you quickly discover that NOTHING is like HIVE.
As I’m happy to hold long term and believe that price has more upside potential, I’m putting my money where my mouth is and keeping the majority of my HIVE stack powered up.
What do you think?
Jump in the comments and let me know whether you’re powering up your HIVE or are continuing to protect yourself against further bearish price action in the bHIVE:bHBD LP.
Best of probabilities to you.
Posted Using LeoFinance Beta
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