@theycallmedan made an interesting proposal recently, should HBD follow the steps of UST and buy some BTC as a backup for HBD in time of crisis.
This does sounds interesting and it is in support of BTC and crypto, but the thing is when crypto goes down, so does BTC, so I'm not so sure will this have the effect we want, especially in a time of crisis.
Some other ways to back up HBD is actually buying some other USD backed stablecoin, USDT/USDC/DAI/BUSD, or maybe gold in form of PAXG? The gold narrative in crypto can be controversial, and PAXG is quite centralized I think.
Overall at the moment I'm thinking having a reserves from other stablecoins makes more sense. Actually UST is trying to achieve something like this at the moment by implementing a large 4pool on Curve, causing what is know as curve wars.
What are your thoughts?
Backing HBD with other coins is more risky than the gain.
We should not discuss this further until Hive has atomic swaps to other assets.
For now our only atomic swap is Hive/HBD.
What we need is more liquidity for Hive/HBD is protect the peg.
And we need to jack up the haircut so it doesn't kick in unless we really need it.
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Honestly I think this is the major risk, and I think 50% will be just fine ... but still better 30% then the ridiculous low 10%
In the end it doesn't really matter because during a mega-bull run the haircut will be triggered by legitimate demand and HBD will break to the upside, and then witnesses will be forced to increase it out of pure necessity.
how can HBD be backed up with other coins?
Well obviously it will be a chalenge to manage the funds but in short it goes like this.
Someone makes a proposal for say 1M HBD, it is paid from the DHF in a longer period, say 6 months to a year,it is sold gradualy overtime and buy other crypto on exchanges.... say stablecoins ... then if the hive price drops a lot at some point, and hbd deppegs, the funds are used to buy hbd, on the internal exchange or wherever there is liquidty at the time.... this means someone will needed to be trusted to manage the funds, or at least a multisg .... but that is basicly the support from the dhf
okay makes sense! I think this could be a good idea, but don't we already have the HBD stabilizer with $150k a day?
hand over they Keys, you can trust me :D
Yes we have the stabilzer and it has a lot of funds, but all in HIVE/HBD
If the HIVE price drops a lot, hbd will lose the peg
This will be aditional external support :)
Having some form of collateral is certainly a great idea, maybe even a basket of top crypto and stablecoins, but the main problem is that inflation of HBD is unsustainable in the long run, unless we make 20% profit each year, which is hard to accomplish for a stablecoin.
Which successful crypto has increased less than 20% per year? Which do you expect to increase less than 20% per year over the next ten years.
Truly long term, I definitely agree, but that may be a very long time.
Indeed Having some form of security for hbd in the case the crypto market nose dive is a really good one. Also don't think BTC would be a good one considering it is subject to market fluctuation. personally i think DAI would be the ideal stable coin considering it is more decentralized compared to the other options for a stable coin
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This is a very good topic and the hardest one in my opinion.
I really like the idea to have some backed for HBD as UST is trying to do it. However, the choice of the crypto asset that shall be used it is not an easy decision.
Since we are a decentralized project we shall not use centralized cryptos like PAXG, USDT, UDSC, etc.
Currently, I only see two possible cryptos to be used, BTC and DAI.
I'm in favor of PaxGold. I know that people want it to be BTC but if we are going to diversify with backing assets we shouldn't be backing crypto with crypto.
It just doesn't make sense but then again, PaxG is crypto and it also may go to zero due to shenanigans.
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The irony :)
What do you think about other stable coins basket?
Say HBD has 1M in the Curve 3pool?
Stable reserves make sense for now but I am scared shitlessly of CBDCs and the upcoming stablecoin regulation worldwide.
Stables like USDC should survive but Tether is a different beast... If it goes down the whole market may be pulled down with it.
It's shitty that we don't have truly stable stablecoins and when you look at things realistically, HBD is a lot more stable in that sense since no one can sue it, regulate it or bring it down.
If I was forced to make a pick then splitting the backing into 3-4 baskets would probably be my choice.
25% BTC
25% ETH
25% PaxGold
25% Other stables
Going all-in on any of them is suicide imo.
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May be invest in plots or lands ?
One thing about land, it doesnd depreciate, and you cant make more of it :)
Well except maybe stealing from the oceans and sea, but that can be quite expensive .
Then we should buy rare gems :)
My favorite dollar-backed stable coin is BUSD.
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I am still learning about these concepts, but listening to Ethereum Maxie’s they criticize projects who back up their token with gold because they think the projects should be backed by utility, developer work and a loyal community. To them having crypto backed by non-crypto assets seems counterintuitive, if the idea is to leave the legacy economy behind. But I am unsure of this whole leave the legacy economy idea. And I know the most successful stable coins USDT is backed by dollars. So backing HBD with Gold or dollars deserves consideration.
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Yea that is what we try to do here ... look for options
I am not an expert in crypto. So it's difficult for me to say what support for HBD. I would think perhaps buy cro, as it's a big company !
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Stable coin governmental legislation seems inevitable in the future which is why decentralization is paramount. All this reserve talk has me thinking it would make HBD less decentralized unless I'm missing something...
The future is near and having this type of plan in place is always better, backing with other stable doesn't actually make lot of sense, maybe with usd in bank will be better
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I don't think there is a great answer. Crypto crash = HIVE down, BTC down, ETH down. DAI will have trouble in that situation because a lot of its backing is ETH. There will be many liquidations and it will struggle to hold its peg too. Some of it's backing is centralized stablecoins, another vulnerability. Centralized stablecoins themselves, we all know the issues. Pax gold is similar.
Another issue is coordination of the holding and selling process. Probably it would be multisig and coordinating BTC multisig and getting signers in the event it is needed is hard enough. Splitting across multiple coins means even more complications.
When I work through it, I end up coming to the same conclusions as others which is to stick with BTC. You get some benefit from non-perfect correlation with HIVE, and it is still manageable.