I always wondered how stable coins and in the Past Steem Backed Dollars and now Currently Hive Backed Dollars work I think the answers eludes many. The concept of have this in the reward plan has a lot of benefits, but what does it really provide the community with? I would go to other sources but I would really like to hear it from someone who directly interacts with it. Also I would like to know what the community outlook is like on-boarding more users? is there some kind of PR or forum talk? How do you get people interested in a platform such as this? I know we have a whole industry behind us, but the main concern is shifting straight to the masses as this would be a game changer with Hive and Leofinance at the forefront of decentralized social applications. What upsides do we have compared to downsides in the technology of this cryptocurrency and Block-chain? Thanks and Peace @durianwalker.
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HBD is an interesting coin. It's soft-pegged to 1 USD which means that its target price is $1, but it doesn't have to remain exactly 1 USD all the time (depending on various factors).
There are a lot of different economic and technical mechanisms at play, but the general function is that 1 HBD is always redeemable for approximately $1 USD worth of HIVE. Which means that when 1 HBD is trading under $1, it usually* makes sense to buy that 1 HBD and convert it on-chain using the conversion operation into HIVE.. that burns the 1 HBD and gives the user HIVE in exchange.
There are other factors like the haircut rule which can affect the outcome of a conversion -- which means that it's not just a straight shot of "if 1 HBD is less than $1, then I'll make money on a conversion" - so keep that in mind.
As for onboarding, we're bringing in new users from other platforms and primarily educating them with https://leopedia.io/faq and https://leopedia.io/onboard. In the future, we'll integrate a better onboarding process directly on the LeoFinance interface
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so if I have 1 HBD and exchange it to HIVE. then I will get an HIVE token worth 1 USD, regardless of HBD prices going up / down?
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