Hey @dalz, what is debt level? What is haircut? Could you please explain? I am a tiny pleb. 😢
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Hey @dalz, what is debt level? What is haircut? Could you please explain? I am a tiny pleb. 😢
Posted Using LeoFinance Beta
Debt is HBD supply/marketcap to HIVE virtual supply marketcap.
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
Awesome. Thanks for the explanation. I will read the blog to understand more of it. I couldn't get it from the whitepaper.
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