My best guess, they wanted to shunt HBD buyers to the internal market to trade for liquid HBD before creating any new HBD. New HBD gets us closer to the 10% limit that shifts rewards to HIVE/HP rather than HBD/HIVE. And, by shunting you to the internal market, they provide a market for the stabilizer, which is an active counterparty on the internal market.
A fun fact is that the 5% conversion fee is burned.
If you want to arbitrage, you would have to wait for HBD to be below $0.95
What others are doing is converting HIVE to HBD when it is below $0.95. Then, they take the HBD and buy HIVE on the internal market to convert again. Of course, because only half of your conversion is credited immediately, you can only do this so many times. Arbitrage is possible. But, HBD has to be at a big enough discount to overcome the 5% burn.
A great explanation. I agree arbitrate should take place on the internal market. That is where the focus needs to be for the moment.
The conversion doesnt work as well. Of course, the challenge with the internal market is liquidity..not enough HBD out there.
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