Very interesting article @arcange .
Q: So is it necessarily a good or bad thing, that our debt ratio gets so high?
Q: Besides printing more HIVE, is there a long term negative effect if we stayed at 10% or greater, or is it a positive effect?
Q: What do we think caused this spike in debt ratio, and has happened in the past?
Thank you!
!PIZZA !LUV
This is a difficult question to answer because it depends on a lot of parameters. Debt can be useful, even necessary, for the development of an activity. But also dangerous if it is not controlled and mastered. Finally, the notion of good or bad is quite subjective.
You will find an answer to your question in @editcted post
As mentioned in my post, this mechanism has been put in place to avoid a spiral of death if the price of HIVE drops down too fast.
So, it's a safety net against debt explosion.
Market forces and the new mechanism for converting HIVE to HBD (that led to the burning of ~120 million HIVE). Combined together and probably with other factors, you get the debt ratio to rise.
Unfortunately, I haven't been tracking the supply for long enough to say if we've had a similar situation, but I do know of times in the past where the "haircut" has been activated.
awesome, thank you for the reply!
You're welcome
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@arcange, you've been given LUV from @jacuzzi.
Check the LUV in your H-E wallet. (1/10)