What is the best collective savings mechanism in 2021?
At 37 weeks pregnant, I’m putting the final touches on our daughters nursery. Shopping online, I discovered adorable pink piggy banks and thought “How cute!”
Remember the joy and responsibility you felt when you were granted a ‘piggy bank’? We “piggy parents'' were prepped with the important mission of finding nourishment for empty pig bellies.
What do piggy banks consume? Delicious fiat.
Determined piggy parents stash spare change and allowance into their beloved glass pigs with such pride that they were making financially sustainable life choices.
Saving money in a jar shaped like a silly piglet is many people’s first lesson in personal finance. Growing and protecting a nest egg is a lifelong pursuit that few seem to master.
I want my children to have a decent savings and be financially literate when they go out into “the real world.” So, is a simple piggy bank a valuable nursery investment?
I didn’t have the privilege of growing up in a financially savvy home. I went to a lower income public school in Kansas. Public schools in the United States rarely offer any kind of financial education. If they do, the curriculum is typically lacking on many levels. I got my nursing license and degree, so I skated by always having a little money in a home-emergency piggy bank and traditional savings account….
Until the day I didn’t.
I was stopped at a red light and was hit by a commercial semi truck. Nursing became difficult with multiple spinal injuries and my savings withered. I ended up losing my home. As I ponder this tragic event in my life, I look at my pregnant belly and scan the adorable little piggy banks online, I stop and ask myself, “Is a piggy bank or a savings account going to be enough? I had these things, I was educated. and I still lost everything.”
“The world is in a scarier state than it was back then, maybe I need a better ‘Nest Egg’ for my little unborn baby bird….”
I don’t want my children to have to endure what I did. I want to provide them with security, but what’s the best way to do this?
(Source: Link)
Let’s Review: Traditional Banking and Savings
To understand a path to a great savings plan, one must know a few things. First, what options are there beyond sticking change in a glass shaped piglet?
Most are accustomed to traditional banks. Traditional banking supports fungible fiat transactional accounts and savings accounts.
Fiat transactional accounts are typically referred to as “checking accounts.” Their contaminants are liquid, can be transferred, and are interchangeable with other globally traded currencies.
Savings accounts share most of these characteristics, except a savings account is a “hodl method” for fiat fans. By storing fiat in a centralized bank’s savings account, one may generate a small amount of interest on the stored ledger value.
In the United States, “The average interest rate on savings accounts currently stands at 0.05%, according to the FDIC. However, that rate can fluctuate significantly based on factors like the type of financial institution you’re banking with and your account balance-” says Value Penguin, a popular online magazine.
The added interest in your savings account assets is a great reason to ‘hodl’ fiat in a centralized bank..
Below are the current APYs for the standard savings account offerings at the biggest banks in the U.S.
Interest Rates for Savings Accounts at the Biggest U.S. Banks
Those are nice little bonuses for storing money. Let’s see the calculations on the short and long term savings benefits.
Traditional Savings
Now, we’d all like to say we are putting away more than 1k a year towards our children’s future, but according to CNBC we aren’t.
“Whether it’s a standard savings account or college fund, most Americans aren’t stowing away any money for their children. Fifty-three percent of those polled in a recent CNBC + Acorns Invest in You survey said they haven’t opened any accounts for their kids. Thirty-two percent said they set up a regular savings account, 13% have a 529 college fund, 8% have savings bonds, cash or certificates of deposit (CDs) and 7% have an individual retirement account or Roth IRA set up for their children. Of those surveyed, only 19% said they had an automatic savings feature set up.” Source.
With the economy suffering massively from the pandemic, savings and the value of fiat has plummeted. There’s even national coin shortages and cries for debt bailouts - so, what’s that mean for our children? Our children’s children? If our national (and global) economy is such a mess, how will our kids obtain wealth and security?
Photo Source
Thinking back to my book research, I remember a special stablecoin category we termed Digital Algorithmic Stable Assets. It was around that time, my friend, Jean-Philippe Beaudet ran a magical idea by me.
He said he wanted to develop the HODLCommunity, “HODLC.” This would be a vision of a global cryptocurrency with intentions of bringing little, to no risk to its users.
HOLDCommunity, The Digital Savings Account On Steroids
Fast forward a couple of years and the HODLC token has become a uniquely designed digital currency, as it fits the characteristics of a “savings account.” Whereas Ether or other cryptocurrencies are transactional accounts, HODL is not technically a currency and cannot be transferred. It cannot be used to pay for a good or service, nor can it be given as a gift or used as a reward. $HODLC is a financial vehicle suited for savings.
A vehicle for savings seems safe and nice… but what’s the return look like? Anddddd, I’m “Mz. Stability”, what’s the investment risk… these are my children we are talking about, here.
Photo Source. "MzStability" from Blockchain Heroes by Travis Wright and Joel Comm, Bad Crypto Podcast.
“The growth rate of your HODLC is tied directly to transactions in the community. Each transaction increases the value of HODLC by 1/100th of a cent. The value of HODLC is also impacted by the passage of time, starting at a 100% increase over the first year, then reducing by 2.9% a year to an increase of 5% per year in 30 years.”“Value, growth, speed, volume, and liquidity are the key factors that will come from the adoption of HODLC. Once the HODLCommunity achieves critical mass, access to liquidity will enable the network to operate without the need for constant additional new users transacting on the decentralized exchange. Also at this point, retail-oriented business cases will create residual usage for HODLC.” Source
HODLC Savings Earnings
Note, Transaction Assumptions:
*We are calculating the increase in transaction gains by the market at its lowest transaction days, February 2021. References on HODL Dex Website:'' there are about 5.29 transactions per day in the last 7 days.” This rate has increased from 2 transactions a day since this article was in copy. Go to the HODL Dex Calculator to chart your investments and get updated transaction increases. You plan your wealth here.
*We are calculating the increase in transaction gains by the market at its lowest transaction days, February 2021. References on HODL Dex Website:'' there are about 5.29 transactions per day in the last 7 days.” This rate has increased from 2 transactions a day since this article was in copy. Go to the HODL Dex Calculator to chart your investments and get updated transaction increases. You plan your wealth here.
*The annual 1k a year investment into HODLC savings has been calculated by submitting $84/usd monthly into the HODLC account.
Holy Cow! HODLCommodity Is A Super Crypto Savings Lambo! lol
Seriously, though... If HODLCommodity is a savings vehicle, where do the savings go? What are the dynamics that let the user withdraw their savings?
To explain this, we need to understand the concept of how a financial institution generally achieves fiat currency liquidity.
First, liquidity is assured by a reserve (10% of current deposit in good governance) with the rest being guaranteed using collateral assets from which the institution will capitalize upon and dole out a small portion to the depositors corresponding to their respective amount in capital.
$HODLC is a digital stablecoin. Stablecoins, by definition, retain a collateral backing or pegging within the digital asset, guaranteeing each asset retains the ability to become liquid.
To understand this concept, there are several notable projects that are backing minted tokens with fiat and precious metals. One can easily envision a gold backed stablecoin. Typically, 1:1 gold backed stabletokens are 1 gram of gold to 1 digital stablecoin.
Crypto collateralized stablecoins are still inherently risky, whereas underlying asset value will fluctuate often and sometimes dramatically.
In the case of the HODLCommodity, an algorithmic stablecoin, there is no real world collateralization; tokens are free trading, and the seller-buyer market brings liquidity. The reserve ensures a certain amount of token availability for the market; however, once depleted, only the seller’s market will be available.
This means that any time a participant makes a savings deposit, it enables another to withdraw from theirs, ensuring there is no central point of deposit and failure.... creating a pool of wealth in your savings.
Interesting.... So, Where's HODLCommodity Liquidity Overflow?
Typically, in the banking infrastructure, liquidity overflow can be affected by an extensive network of lender markets and banks that will make liquidity available now and require reconciliation later.
In the case of collapse, the lenders' market will dry up and the bank will need to lower withdrawal limits to not default on payments.
In HODLCommodity’s ecosystem, there is no lenders market of financial institutions bringing liquidity. Critical overflows will result in a slow down of the liquidation process and possibly a drop in the trading volume, but it will not impact the capital value.
This is the reason a savings use case is so important and powerful for enabling a market of the largest number of small, daily transactions and bringing the volume necessary for short- and mid-term savings plans to liquidate fast.
This type of behavior is healthy for such a network, compared to a speculative market where large dumps are made as part of an exit strategy.
The HODLCommodity is not invulnerable to this dynamic. Still, it is strongly mitigated by the 100,000 transaction threshold, which limits the number of Ether circulating to incentivize a more extensive network of participants and favor an asynchronous buying and selling dynamic.
Photo Source: HODLCommunity Social Media
Amazingly, a rapidly growing dynamic savings is only one of the use cases for the HODLCommunity asset. It has a grounded approach to savings that cannot be controlled, censored or seized and behaves like a stablecoin with interest on steroids.
HODLCommunity also creates a barrier between the transactional and savings environment, which plays a psychological role in incentivizing and rewarding financial discipline.
In conclusion, for these reasons and many more, to prepare for our little "baby bird's" nest egg, we have wisely chosen HODLCommunity as our daughters 'piggy bank'.
I invite you all to track "HODL Baby" Sam and her investments with us! Our delivery date is March 23rd and we will be putting a few investments in HODLCommunity for our children's future.
I'd love to talk about other investment opportunities that exist for our children. It's our job to bring financial education and a giving heart to the next generation-
How are you doing so?
How can we work together to bring wealth to our families?
Let's connect on social and chat in Telegram! Thank you for reading!
Alyze Sam is a refreshing blockchain strategist, a novel educator, award winning author and a vehemently driven advocate. First, dedicating her life to her patients in hospice nursing, Sam passionately embraced the world of financial technology after nearly losing her own life in 2014.
Sam wrote the first book on Stablecoins in 2017. The unbiased text takes complex practices and simplifies concepts for most audiences. In February 2020 Sam and her partners book, ‘Complete 2020 Guide to Stablecoins’ sat as the #1 New Release in Business and Money on Amazon Books.
Sam’s second book, ‘Stablecoin Economy,’ a university text, released May 14th, 2020. Sam’s Stablecoin research was published by Don Tapscott at The Blockchain Research Institute in January 2021. The Bad Crypto Podcast honored this work by developing a Blockchain Hero NFT inspired by her work: Mz. Stability
Co-founder & CEO of Mass Media Division, GIVENation & Crypto Couch
Telegram: https://t.me/HODLCommunityPublic
Telegram: https://t.me/HODLCommunityPublic