RE: HBD is 11% above the peg! Turn the printers on!

[stefano.massari]

Thanks for sharing news about HBD. We could also think of converting some HBD into HIVE. What do you think about it?

Comments

[igormuba]

There is an onchain conversion tool, but the way it is supposed to work is:

I am using fictional numbers to make it easier to exemplify:

• If HBD is below $1 it is supposed to be profitable to convert HBD to Hive
  Example, Hive is $0.5 and HBD is $1, if you convert HBD to hive you get 2
  hive, but if HBD is $0.5 instead of getting 1 Hive (as they were the same price) you get 2 Hive as the blockchain always assumes HBD to be worth $1

• If HBD is above $1 it is supposed to be profitable to convert Hive to HBD
  Example, Hive is $0.5 and HBD is $1, you convert Hive to HBD you get 0.5HBD as it is half the rice,
  but if HBD is $2, if you just exchange you would get 0.25HBD as it is 1/4 the price, but if you convert on-chain you are supposed to get 0.5HBD, and the network always assume HBD to be $1

So, the on-chain conversion tools are supposed to be used to arbitrate the price differences when HBD is away from $1

[sorin.cristescu]

In the past the "conversion" smart contract only worked one way: from HBD to Hive (to maintain the peg on the downside). Now I see it works both ways and there is a 5% burn fee which was introduced ... didn't keep pace, thanks for pointing to the changes

[stefano.massari]

Thanks for replay and for this clarification on HBD

[amblors]

simple and clear explanation. thanks.