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RE: Hive Haircut Rule: Will It Ever Need To Be Changed?

in LeoFinance2 years ago

Possible any number above 10% creates risk, not necessary we will see it now at low hive price, but eventually with next bull period if people start cashing out to HBD and we will get closer to 30%, eventually price will drop and some funny events may occur.

That should read "Possible any number above zero creates risk". Surely noone loses many with 0.1%-haircut-imaginary-HBD as there is not enough of those out to bother. Sooner or later, any number gets there, 10% or 30%. The good thing about the architecture is that it clearly defines who the losers are. If HIVE price inflates due to HBD success, and the troubles hit during a bear, it is going to add some selling pressure from people who would feel cheated (in fact they didn't RTFM) at the worst moment possible but since the Hive network still has value outside HBD, there is no need to crash all the way to $0 HIVE (Luna style).

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since the Hive network still has value outside HBD, there is no need to crash all the way to $0 HIVE (Luna style).

That is true. Applications have an incentive to hold it simply because of the need for resource credits. People need them to engage onchain.

Also, the key is to build value on HBD itself, through utility. That means that in spite of the trading and other financial aspects, users have incentive to keep it in their wallet, ie to make payments and purchases.

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right game starts from 0. At least we play it against ourselves. Possible it's more psychological matter than numbers and stretching playground probably doesn't matter until we maybe reach very high HIVE price somewhere in 10 years