Your post points out that the conversion formula provides a sufficient peg for HBD.
The real question is: Does the 20% interest on HBD provide any value for the blockchain?
The 20% interest has pernicious effects throughout the Hive-O-Sphere. The long term effect is that most of the HBD interest will be converted to HIVE and sold on the open market. It is likely that the dumping of HBD will happen in a weak market.
In May HIVE gave out 55,000 HBD in interest. Over half of this interest went to the top 12 accounts. It turns out that the top 1 percent of active accounts received over 90% of the HBD interest.
So much for the claim that HIVE will lead to a more equitable society.
Converting 55000 HBD at $0.453 would create 121412 HIVE to be dumped on the market. The epic dumping of HBD will happen when HIVE is trading below $0.3.
The HBD interest has also had a pernicious effect on HIVE-Engine. One can prove the following observations by examining the transactions on honey.swap. Honey.swap which is the primary means for moving funds between HIVE and SWAP.HIVE.
It appears that a large number of authors were moving their HBD rewards to HIVE Engine and buying alt coins. When the witnesses raised the interest on HBD, the flow stopped.
There were many people who started liquidating their HE coins and moving it into HBD. The result was a collapse of the HE coins.
Even #LEO is faltering.
IF the conversion formula is sufficient for HBD to operate as a stablecoin, then why are we inflicting so much damage on the Hive-O-Sphere in a scheme that only benefits the top 1% of accounts?
!BEER
Posted using Proof of Brain
Eyes opening remarks.I am just trying to learn hive and crypto.Thanks for the comment.
One could also ask about 15%, 12%, 10%, 2% bringing any value to the blockchain? Certainly if it doesn’t, perhaps the 20 oracles making it happen won’t?
These assumptions are very unfound, unclear and unrealistic. I mean, you could as well assume that the world will end on Friday.
I don’t get this logic. The same 1% locking in most Hive as HBD should not benefit?
In my opinion, Hbd is responsible for only about 5% of Leo price action.
Posted Using LeoFinance Beta
You bring up a good point, human behavior is often shaped by the rules. We used vote selling bots on Steemit because it was economically beneficial and legal. People frowned on it in public and wrote bots for it in private. A certain percentage of people will always exploit opportunities for economic gain.
Posted Using LeoFinance Beta
I am sad to see @spaminator downvoting your comments; so I upvoted your most recent post instead of the comment.
The mantra on both HIVE and STEEM is: "Code is king."
People should interact with the blockchains based on the code, and not simply on impressions that exist in their minds.
People who invest in HIVE based on the code are likely to transfer their HBD to savings when HIVE is strong. They are likely to convert it to HIVE and dump the HIVE on the open market when HIVE is weak.
I intend to dump my savings if I see the market value of HBD approach the 10% hair cut.
We should expect people to invest according to the code.
Hey, very interesting conversation. Can you explain this part ?
"People who invest in HIVE based on the code are likely to transfer their HBD to savings when HIVE is strong. They are likely to convert it to HIVE and dump the HIVE on the open market when HIVE is weak."
You mean to sell low, why ? 🤔
Thank you.