Hey Dalz; does this mean that HIVE will be re-valued at 23 cents, or is it just the lowest it can be? (What do you mean by haircut?)
Tim
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Hey Dalz; does this mean that HIVE will be re-valued at 23 cents, or is it just the lowest it can be? (What do you mean by haircut?)
Tim
Hive can have whatever price the market thinks it should.
The 23 cents is a level from where HBD price will be re-valued ...
Haircut happens to HBD, when the debt increases over some percent of debt that the blockchain allows. Now 10%, soon 30%. Haircut means the blockchain wont give a 1$ price for HBD anymore when conversion happens. The higher the debt the lower the price of HBD. Its a protection from death spiral.
Details here
https://peakd.com/hive-167922/@dalz/the-haircut-rule-the-biggest-risk-for-the-hbd-price-or-historical-data-on-hive-debt-and-hbd-price
It's all very confusing, but thanks for the additional link. Couldn't follow it all, but glad to know that these complex questions are in the hands of someone other than me!
Have a good one, Tim.
At first it might looks complex, but its not that much. HBD acts as a debt on Hive. So there is a limit to that debt (haircut). Haircut on HBD means that the Hive price has dropped to much and that HBD will drop bellow 1$ as well. In the past the lowest HBD has went was around 0.6