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

in LeoFinance2 years ago

If we reach 30% ratio at 3$ Hive and hive price will drop overnight to 1$ it's not 30% anymore, right? You can imagine all the events following this scenario, printing hive to drop price even more to print more hive, etc...

If the debt ratio is at the maximum of 30% and the value of Hive drops the blockchain will stop paying one dollar's worth of Hive. In the scenario that you described, HBD would be worth 30 cents. So the debt ratio cannot go above 30% by design.

In fact, the blockchain starts printing less and less HBD when the debt ratio hits 20%.