My main concern with this is the ability to actually acquire that much HBD. If anyone has any suggestions or advice about how to convert that amount of stables into HBD efficiently please let me know.
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My main concern with this is the ability to actually acquire that much HBD. If anyone has any suggestions or advice about how to convert that amount of stables into HBD efficiently please let me know.
The liquidity of HBD is not optimal, and achieving this would likely require a longer period of time. One possible approach could involve utilizing the HIVE internal markets. To accomplish this, we would convert the stablecoins into regular HIVE and then use a script to purchase HBD on the internal market.
To minimize fees, we could consider exploring over-the-counter (OTC) transactions for converting USD stablecoins to HIVE. However, implementing this process through the DAO might present some challenges that need to be addressed in order to reduce fees effectively.
Yeah, whatever method, it it will take time.
Hey mate, the longer this proposal is on the table, the more I worry about this point. To ensure liquidity is available to enable the swap, it would take many days or weeks to obtain the HBD throughout the enactment of this.
It is problematic, and I may end up voting against(!) my own proposal if this proceeds to a full proposal.
I'm certain that there is enough long term liquidity of HBD, but it certainly won't be available all in one hit.
I'm was on the fence but I'm going to vote for it after reading that bit. You've earned my trust. ;-) Even if you did say "get DEC to peg"
I don't think liquidity plays any role here.
When you use the conversion tool from HIVE to HBD you create those HBD burning those HIVE (and viceversa in the other way), adding/removing tokens to/from circulation.
It's all about inflation and balance between marketcaps of the two system currencies this blockchain has.
Also this,
https://peakd.com/hive-13323/@dalz/rxdxls
And this,
https://peakd.com/hive-167922/@dalz/hive-inflation-for-may-2023-the-hive-supply-reaches-400m
Correct, but that would require Stable Coin -> HIVE -> HBD - which is fine by me, but some stakeholders may not understand these mechanisms and elect to vote not in favour of the proposal.
This is why I listed this as a risk.
We can reduce the HBD supply to be add in savings to start with. For example start with 50K HBD (instead of 250K) and in future add more if suitable.
Yeah, it doesn't need to go in all at once. The key to this proposal is long term sustainability and trying to get the DAO an "income" from interest once DEC hits peg.
There is a bHBD and BUSD pool on cubdefi by @leofinance. Though the liquidity is not that high but total amount can be split into 50 or 100 equivalent orders and swaps can be done at regular intervals. This will also give pool time to come to par value as arbitrage bots will do the opposite.
Unfortunately, I found out that they do not back bHBD with actual HBD, so you cannot convert it back to real HBD. I tried unwrapping a small amount of bHBD to HBD around a month ago and they still haven't gotten it to me and told me not to unwrap more because they don't have it. It is extremely unfortunate and I would not use this for SPS DAO funds in any way.
That feels sketchy of the pool.
We could use the conversion mechanic built into the blockchain itself, but then if the DAO wants to exit the position in a hurry, it is a bit problematic to do this without then crashing the HIVE price.
Alternatively, if there is sufficient faith in HBD and the HIVE eco system, the DAO and its various stakeholders could see this as a pretty sweet asset. Others, who dislike stables, might see it as a liability, but my view is this is something we can do with idle funds to earn a return, and over the long term, do meaningful things to increase the DAO's financial position.
I'm sure this would be met with potential arguments of "at what cost", but I feel as though that predicting something that distant into the future is a game of folly.
Would you be willing to clarify a bit on this?
@khaleelkazi
This is a long running issue I raised too, amongst others. The actual process works fine minting and burning bHBD when there is liquidity. However the LEO finance team minted their own bHBD without a HBD deposit, the reason provided was for arbitrage opportunities, but that doesn't make sense to me, you can trace where it all went on the blockchain. Eventually it appears to makes its way to binance where you can no longer see where it went.
Its s shame we don't have a decentralised wrapped hive, and HBD. Perhaps the witnesses can crate a multisig system, so its not reliant on one key holder. Maybe once the L2 Eth chains take off after the next upgrade would be a good place to launch something like that.
Thanks for this information.
In their communication, they said every bridged coin will be backed by the native coin.
So it's not the case.
That explains why I always have the issue with Leofinance bridges recently when converting from BSC to HIVE and versa.
There are BUSD and BHBD pools on cubdefi now. So there is a way to aquire the HBD but the DAO would have to do that in portions so the HBD price stays consistent. Liquidity is low on HBD but there is room for more. There is about 100k HBD that can be bought per day if you use all ways of swapping or trading. Possibly the buy can be done with daily purchases in the 10k 25k range. It would take about 2 weeks to aquire the needed HBD but we can put the first portion in savings immediately.