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RE: A Look at the Hive Debt | Data On HIVE/HBD Supply, Historical Debt, HBD Performance | Jan 2025

in Hive Statistics • 9 days ago

The risk is if it goes over 30%: at that point the haircut mechanism cuts in to protect Hive's price from a death spiral, so HBD gets devalued whenever the debt ratio is over 30%.

But in practice, you can expect that if the debt ratio starts to approach 30%, there will be more conversions of HBD to Hive before the haircut point is reached by experienced traders, reducing the debt ratio again and avoiding the haircut effect.

9 days ago in Hive Statistics by
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     8 days ago  

    I got it. Thank you for the clear explanation.

    As for the conversion of HBD to HIVE, I find this helpful:

    . . . if the debt ratio starts to approach 30%, there will be more conversions of HBD to Hive . . .