HBD is 11% above the peg! Turn the printers on!

igormuba in LeoFinance • 4 years ago

HBD high yield rate is both a blessing and a curse, as I have explained on my post about HBD's sweet problem.

HBD not only stood stable above $1, but it is now daring to hover above $1.10!!!!

_2021_08_11_at_11.21.14.jpg

To not repeat myself too much:

HBD should be 1:1 to the dollar
HBD yield is a tool to control price
Because HBD yield can be lucrative, it can increase demand and consequently drive price up

Like I said in the previous post, every possible solution has pros and cons.

I myself, as a witness, chose to use this increase as leverage to attract new users to Hive using HBD yield, that is why....

I am not voting for a 15% HBD yield rate

As a witness, instead of the current 10% I was supporting, before, a 12% yield, but because the price continues to go up, I think we can take this dramatic step.

It is not that much

We went from 7% to 10%, that is an almost 50% jump, and HBD was below $1 at that time. So I believe it is not a bad choice to go from 10% to 15% to a few months, and see how the market reacts.

Share your opinions, and if what I say makes sense to you, consider voting me as one of your witnesses!

Click here and vote me for witness on HiveSigner

Or use your preferred signing tool to vote me:

https://vote.hive.uno/@igormuba

#hive #crypto #posh #ccc #creativecoin #bpc #palnet #proofofbrain #gems

4 years ago in LeoFinance by igormuba

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sorin.cristescu 4 years ago

When your economics are muddled, you risk doing more harm than good. HBD's main function is STABILITY (of the peg to USD 1:1), not YIELD!

HBD is intended as a tool to make the Hive blockchain attractive to trade and to real world exchanges of goods and services. The yield is a tool to the end of STABILITY. The fact that a high yield has "broken the peg" on the upside means the yield should be REDUCED, not increased !

The objective of the witnesses should be to bring HBD back to 1 USD.
Therefore, yield should be managed like central banks manage their funds rate, and this means decreasing the yield resolutely, first to 5% I would say.

Meanwhile Hive should attract users in its own right through the apps that make it the best blockchain out there. Blogging, playing, etc

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4 votes

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forykw 4 years ago

No need to repeat myself. You said it all.

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2 votes

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goingbike 4 years ago

"Time to fire up the @hbdstabilizer," might be more appropriate...? 😃

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1 vote

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readthisplease 4 years ago

I love HBD, but the price fluctuations and uncertainty scares me. I remember earning 50% increase in my dollar worth because the price of HBD was 50% higher it was a blessing for me at that moment but I was scared and I just want that assurance of 1:1 dollar price

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igormuba 4 years ago

You are right, it is risky buying HBD now, people keep doing because of the high yield, which can not print as fast as the demand. The simple solutions (both with drawbacks) as far as I can see is either increasing the yield to increase supply, or reducing the yield to reduce demand, both are risky and can have negative effects, doesn’t seem to be an easy and straightforward solution

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sorin.cristescu 4 years ago

Why not learn from more than a century of economic research? This research points quite inambigously toward the solution: DECREASE the yield to decrease demand. "Printing money" leads to the negative consequences which bitcoin has been created to mitigate. In a small, fragile ecosystem like Hive, the negative consequences of printing HBD will be very quick to appear. It would be like digging our own grave

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2 votes

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igormuba 4 years ago

You are nor wrong. In another post I point exactly that out, that a bigger yield on HBD might create more demand, but that would be an investment and a good issue for us to have, we would onboard new brains and investors.

I also admit in that post that, to me, there is no right answer yet, this one just seems to be the one that has more pros and cons, because it would bring more minds and turns Hive from “only a social network” into a DeFi platform.

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sorin.cristescu 4 years ago

I am not alone in arguing at length against DeFi. DeFi is a mirage, it's young, computer-savvy kids rediscovering the mechanisms that were responsible for so many crises in the TradFi world. The 20-something and 30-somethings who were too young to really understand the underlying causes of the GFC from 2007-2009 . The young geeks who, because they are code wizards assume they are good in finance as well.

DeFi is a temporary fad as were the ICOs in 2017 - 2018, regulatory crack downs and scams and crises will make the DeFi bubble pop sooner rather than later.

In contrast, Hive has been built with a different story, that of a social blockchain.

Yes, we should attract more users and more brains but what users, what brains and why they come here matters a lot. I believe it would be a mistake to attract the DeFi crowd. I would rather attract content creators and game producers. Games, NFTs, blogs, that is where Hive is at its best.

It CAN do DeFi, that's a plus, but "beware what you wish for"

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2 votes

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goingbike 4 years ago

Centralised or decentralised, finance is still finance... and the increasing financialisation of our economies (whereas before they were dedicated to actually building things) is a net loss for everyone over time...

This is an interesting point of view that I hadn't thought of with regards to DeFi

Thanks for articulating it

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2 votes

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sorin.cristescu 4 years ago

I'm not alone, there are a lot of smart people on Twitter saying the same thing. This is a very good post I found from a tweet: https://www.paradigm.xyz/2020/08/ethereum-is-a-dark-forest/

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1 vote

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stefano.massari 4 years ago

Thanks for sharing news about HBD. We could also think of converting some HBD into HIVE. What do you think about it?

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igormuba 4 years ago

There is an onchain conversion tool, but the way it is supposed to work is:

I am using fictional numbers to make it easier to exemplify:

If HBD is below $1 it is supposed to be profitable to convert HBD to Hive
Example, Hive is $0.5 and HBD is $1, if you convert HBD to hive you get 2
hive, but if HBD is $0.5 instead of getting 1 Hive (as they were the same price) you get 2 Hive as the blockchain always assumes HBD to be worth $1
If HBD is above $1 it is supposed to be profitable to convert Hive to HBD
Example, Hive is $0.5 and HBD is $1, you convert Hive to HBD you get 0.5HBD as it is half the rice,
but if HBD is $2, if you just exchange you would get 0.25HBD as it is 1/4 the price, but if you convert on-chain you are supposed to get 0.5HBD, and the network always assume HBD to be $1

So, the on-chain conversion tools are supposed to be used to arbitrate the price differences when HBD is away from $1

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3 votes

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sorin.cristescu 4 years ago

In the past the "conversion" smart contract only worked one way: from HBD to Hive (to maintain the peg on the downside). Now I see it works both ways and there is a 5% burn fee which was introduced ... didn't keep pace, thanks for pointing to the changes