Recently a majority of the DHF proposals have gone unfunded due to support removal. If you use PeakD, you can look here to see the current status.
In their place you will see multiple HBD Stabilizer proposals.
For a while HBD has been trading over the $1 peg, and lately it has been gaining momentum and approached $3, nearly 300% over the peg. This results in proposals receiving considerably more than budgeted. For example, if you asked for $2,000/day for your proposal, you were receiving almost $6,000/day instead (if, of course, you sell it right away).
The HBD Stabilizer has two purposes, one it does really well and one well not so well.
Purpose #1 - Stabilize HBD
The primary purpose of the proposals and the HBD Stabilizer project is to stabilize HBD to $1 in both directions. While we have many tools to raise HBD to $1 if it falls below, we do not have many that try to bring it back down to $1.
HBD Stabilizer is an improvement to the HBD Potato algorithm that is able to put pressure up and down on HBD. You can find pseudo code behind the algorithm here in @smooth's earlier post.
Every hour, the HBD Stabilizer receives funds from the DHF based on approved proposals.
If HBD is selling for below $1, the stabilizer will immediately return the funds to the Decentralized Hive Fund.
If HBD is selling for over $1, the stabilizer will open orders on the market to buy HIVE and return it to the Decentralized Hive Fund.
Purpose #2 - Increase Decentralized Hive Fund reserves
While this is the secondary reason for the HBD Stabilizer, it is the primary reason it is heavily funded. The HBD Stabilizer is currently returning the funding supplied to the DHF at a rate of around 40,000% profit while buying up the HIVE liquidity on the internal market.
The HBD Stabilizer will aggressively buy Hive on the internal market when HBD is greater than $1 and return this HIVE to the Decentralized Hive Fund. These HIVE transactions are immediately converted to HBD by the DHF.
"Currently, approximately 40000 USD worth of HIVE (50000 HIVE) is being purchased and removed from the liquid markets per day."
@smooth
While the HBD Stabilizer is funded, it is buying HIVE on the internal market in attempt to move the price action from HBD to HIVE.
The current proposals that are unfunded is a temporary measure to reduce the overfunding of proposals while HBD is trading well above the peg.
If you are wondering why there are so many HBD Stabilizer proposals, this is to offer adjustable levels of funding based on the current DHF daily budget and HBD price.
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I feel like you did a good job explaining it. Very helpful.
I'm still getting my head around all of this... but I do think that HBD really needs to be a stable pegged currency if we're going to get any sort of Hive global marketplace up and running...
Meanwhile HBD continues to do whatever (external) market forces decide.
In the long run though hbdstabilizer has to be a good thing. I understand that HIVE in hive.fund isn't included in current_supply and so isn't included in the inflation algorithm. And so, the higher HBD goes, the more HIVE is taken out of current_supply - surely this is good for use all in the end.
Hard to say if the proposals that have recently lost funding would be better for Hive.
hive.fund is included in current supply and all of the supply figures. However the HIVE that HBD can be converted into is not included in current supply (it is included in virtual supply). This applies whether or not the HBD is inside hive.fund. By sending HIVE to hive.fund, it is converted into HBD and thus removed from current supply.
Related: the HBD inside hive.fund does not count toward the debt ratio/print rate/haircut.
Seems like a matter of degree to me. When HBD was only a little above, the return wasn't so huge, and the other proposals can be left alone. But when DHF can double its money instantly, it seems reasonable to me to take this opportunity to grow the fund as well as reducing HIVE in circulation, and resume the proposals later.
As noted in the post, the proposals all got extra funding for about a month due to HBD being worth more than the assumed $1 (though not to the current degree, generally only 10-30% extra), so that's another reason some interruption doesn't seem like a big deal to me.
Thank you for clarifying.
When you put it like that hbdstabilizer makes good sense. Hopefully HBD will settle and the proposals that dropped out can resume funding soon. I guess what we don't want is HBD to continue to be way off $1 and those proposals seeking funding remain below the return proposal, with frustrated devs. packing up shop and heading elsewhere.
I agree. Another solution if it does go on is for some large stakeholders to organize a fund to temporarily pay devs and get paid back from DHF later. You would need enough large stakeholders to commit to support this to have a good expectation of being paid back, but I know I would support it.
Good job
I've heard that the next Hive Hard Fork will have a better way to try to stabilize HBD. Is this true?
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If you mean the Hive->HBD conversion, yes I believe that will make it into the next hard fork.
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Yes, that's what I was referring too. I'm looking forward to it.
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Do we really need 3 HBD stabilizer proposals? I would prefer solving this issue on the blockchain level, by implementing HBD <-> HIVE conversions (convert to HIVE and convert to HBD) in both directions, adding a small fee that is burned for a convert operation, and to lower the debt ratio from 10% to 2-3% to be on the safe side in order to reduce the impact of HBD induced debt during bear markets.
Proposed hardfork change to stabilize Hive Dollar’s tracking of USD value
https://peakd.com/hive-102930/@blocktrades/proposed-hardfork-change-to-stabilize-hive-dollar-s-tracking-of-usd-value
The Hive conversion is coming in the next hard fork as far as I understand it today.
The reason for the multiple proposals is so the appropriate ones can be voted in based on how much budget is available. While a 100HBD/day proposal might be fine sometimes, times like this a much larger one is needed. In fact, multiple are needed with the current budget.
If only one big proposal was made, then it would drown out all proposals if it got approved, rather than selectively being able to choose the amount used.
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Hard forks are only done once or twice a year so that's a good longer term solution, but not short term.
Even after a conversion hard fork is implemented, there may still be room for funds doing trading to fine tune the peg near $1, but we will see.
is there a way we can allow more with soft forks (without risking chain security)? Would make things more flexible.
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Only for things that are limiting, not for new functionality (at least not without great complexity; it is indeed theoretically possible).
That's why RC is implemented as a soft fork and can be changed without a hard fork. All is does is limit the ability to perform transactions (when your RC runs out). Other soft forks have been used to block transactions taking advantage of exploits in the past. So again, limiting.
ok, thanks.
That's good to know.
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yes you are right that many are still spectical.
spectical of what? You mean spectacles?
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lol
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And some proposals are unfunded because our multiple potatoes gobble up all the funds.
I explained why in the post.
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I don't think our trading bot should do double duty as a second return proposal.
@lordbutterfly is cool and sold some for the higher price ( so it cost less HBD). But if I think about it, he has made a contract with that marketing guys.
It sucks if something like this gets unfunded. There are some left, but i think blocktrades ( and other big stakeholder) notice it.
Also he would increase the marketing efforts if more money comes in the proposal.
And we need besides artificial demand for hive real marketing.
IMO it's uncool to use all available funds ( or close to all).
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IMO he is. The proposal is transparent.
Gimme cool deepfakes. Last is long time ago :)
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Well, I think @themarkymark is cool and I always tell that to everyone that asks.
Wer a pair of cool bros, me and him. 😎
This is ok for a few days but what happens if its going on for weeks/months?
those were my thoughts and
Thanks. That's interesting. Nice to see blocktrades on a warpath with this.
I came back to Hive after quite some time ago and it was weird to see those proposals there, but why are 2 proposals required? Isn't just one enough?
It is to give options, since you can't just create proposals on the fly and get them approved, having different proposals with different amounts allows you to piece together the amount of funding you want.
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thanks.
Could you help me understand this?
For simplicity purposes let’s say market price for hive is $1, and hbd $2.
Is this how it works?
What is the significance of stable pegged currency ?
Sorry but I do not understand, most of the time we want the currency to go up not stay static.
Would really appreciate if someone can explain me this.
Thanks in advance.
The main advantage is it can be used in commerce, if you want to sell a widget for $10 you know it will always be worth 10 HBD (if HBD was in fact pegged).
The side advantage is when people think a token will crash, they can move their tokens to a stable coin and ride it out and buy back cheaper. Tether is typically used for this.
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Thanks for the information. It's always great to get a better grasp of what is going on and how all of this works.
No comment....😕
How ironic.
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I only said that, wondering why there was no interactions... You did explained something important,and....
I just posted it a few minutes ago...
Do you normally get interactions prior to posting?
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Yes...from bots!...but I don't write..😕
!giphy done
Via Tenor
I understand why it's there and what it's doing but does no one seriously see a few major things wrong with that and how it's being done?
I don't believe those funds were put there for the intention of manipulating the market. Which is kind of what you all are doing here. You're kind of telling me that the HIVE price is scaling up because of money flowing into HBD so in a way it's being artificially propped up?
I understand funding a project say its $100 a day that 100HBD a day should cover this. However that has NEVER been the case.
So either 1 fix it on the back end so that HBD is actually stable like most other stable coins that do it very well or 2 fully remove it and consider other options and pros and cons such as calculating the value of HIVE on payout and paying out the HIVE value to USD value.
It fixes nothing in terms of what is wrong with HBD. There needs to be a better solution then simply selling it for HIVE and throwing those funds into the proposal system.
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The funds in the DAO should be used for any project that is deemed worthy of funding by the hive stakeholders. I think that most stakeholders would agree that "fixing" the peg and (as a side effect) increasing the buy preasure for hive are worthy enough.
The concept of market manipulation doesn't apply here. There is excess demand for HBD hence the price of HBD being above the intrinsic value (if we can use such a term). As stakeholders we are doing what any rational participant would do in an open market (of any kind)...if the demand shifts the price the supply is increased to account for that.
There is no "artificial" price being created here. It is just a market opportunity that we are taking advantage of. If market participants cannot take those opportunities then who will?
I don't understand what you are proposing here. The rewards are based on the scheduled inflation rate and payed out according to the predefined distribution on the blockchain code (65% to posts, 15% as "interest" to stakeholders, 10% to the DAO and 10% to the witnesses). I don't see how the dollar value plays any role here. Unless if you are proposing to track the value of HBD and pay more of it when it's price goes above the peg and viceversa.
Now that I think about it I believe there is a witness parameter that can be modified but there maybe some long term risks by tampering with that.
May I also ask what do you mean when you say that we should "fix the backend" to stabilize the peg? The price of any asset is determined by market forces and not by "backends". I believe that perception plays a larger role when it comes to stablecoins...USDT is traded at one USD because people believe that it is backed by an equivalent amount of real USD. DAI is traded at one dollar because traders are confident that they can redeem it for 1 USD's worth of ETH (or the other assets that are used as collateral).
When traders see HBD on exchanges they don't see a stablecoin. The way the trading pairs are setup may play a big role in that perception.
Thank you for the feedback on this. I don't know much in terms of the coding and how things are structured as I'm sure a majority of people who use Hive don't. But I believe it's always important to learn and understand how anything functions that you are a part of so again thank you for your time on this.
Is there no way to Peg HBD as $1 at all times based on collateral like other stable coins? Again not sure how that works. In terms of payouts I was referring to the proposal system which uses HBD per day. If HBD won't ever be stable then why use it? Why not pay out in HIVE from the pool and calculate what the $1 value to hive is each day on the payout to those projects? Thus removing HBD (most likely can't do this though since there's a good amount of capital behind HBD and it's been in the system since it's birth)
I don't know best, this is why I vote for proposals you all are the devs and know it better than me but it just doesn't make sense how we can't code HBD in a way to make it stable if that is in fact what we want it to do and be for payouts on proposals and dev work. Maybe I'm totally wrong and the HBD proposal funder is really the only solution it just seemed really odd to me to me that this was the "best" or only option.
HBD works pretty decent when it goes below 1 dollar. The reason for that is that when the debt ratio is below 10% you can always convert it to ~one dollar's worth of hive. Under those conditions traders can buy them below the peg, then do a conversion and sell the hive for a profit. That creates buying preasure for HBD that brings the price back up.
There is no way to create new hbd on demand when the opposite happens. That is what is wrong with the pegging mechanism. It looks like that will finally be included in the code on the next hardfork. In the meantime the hbd stabilizer is basically converting hive to hbd but the demand is too high right now for it to be 100% effective but it's better than nothing.
Here you can see that HBD was tracking the value of one USD for most of last year. The moving averages ranged somewhere between 0.95 and 1.00 most of the time. It is not as good as other coins in my opinion due to the low marketcap and the lack of exchanges where you can arbitrage away the deviations.
I think part of it for me is the fact that I forget they are out there. It isn't unless I see a post promoting one of them that I am prompted to go over there and look at them. Having something built into PeakD would be really awesome.
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Bagus sekali
I'm not completely sold on the necessity for a stablecoin. I've been pondering ever since I joined STEEM and was earning my first SBD. I have seen all the arguments for it, and some have merit, but the simple fact that the stablecoin token has never been very stable undermines the point behind having it at all.
o my God, when can you stop writing shit post? Poor quality and what can I say? This is how your post looks like.