RE: ##### Hive to HBD conversions are weird.
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Of course 20% is sustainable.
It's the debt ratios that become unsustainable.
Market cap of Hive has to go up just as much as people want to hold the stable coin for it to work.
Hive and other crypto's can't expand 20% year over year?
obviously they can.
Bitcoin is doing 100% a year.
Then like terra luna and celsius it won't be any questions left.
DEBT... RATIO
Look it up.
You're uninformed.
People aren't even taking the deal; of course it's sustainable if no one is even taking the deal.
Duh.
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I dont know nuffing, but im scared. You cant assume anything, like if there is an assumption that nobody has 2 billion dollars or a malicious heart to break something, think again. If its theoretically possible to break, it will be broken. What ever is happening is because some entity spotted a way to collect free money and abuse a system. Maybe something more sinister. The debt ratio might be a thing, but 20 percent infaltion does not seem sustainable, unless Hive is growing. It isn't.
Having said that, iv been waiting for people to see the 20 percent and start buying HBD and locking up hive. It will push the price of hive up and keep it locked up, i like this but iv no idea if it is sustainable or not.
The most obvious flaw in the logic that it is unsustainable is the implied assumption that this 20% yield is static and can't be changed. Witnesses can lower it to 0% if they wanted to in an instant. It's a dynamic variable that improves monetary elasticity and stability.
If Hive spikes x10 because everyone is buying HBD and burning Hive and increasing the debt ratio and creating massive leveraged risk... then yeah... lower the yield because it's unsustainable. What we are seeing right now is the opposite of that. The 20% yield gets better and better as the price of Hive crashes. Don't even need to consider lowering it while debt ratio is below 5%.
I could understand 20% yield on HP. Or 30%. Maybe 50%. Probably sustainable, the Hive is obviously growing. And if the chain performance happens to fall behind, the price drops, we shrug shoulders and move on. No big deal.
I also understand those who prefer to hold HBD. I do not expect them to do it at 0% but 20% yield on the stablecoin just pushes them towards risky spot they wanted to avoid. There is no shrugging shoulders and moving on when a stablecoin depegs (and it should do so long before reaching haircut threshold).
This literally explains you do not consider 20% sustainable. Even I can admit it is probably reasonable as a short term move but let's call it unsustainable if you do not expect it to last. It could be simultaneously unsustainable and correct.
ok, so it makes it seem easier to understand knowing that only if Prices are rising its risky and it can be altered, this is good news. Im still not comfortable with systems like these though only because i like things that just run themselves, they are so beautiful. I dont like governments or banks so the Hive system just doesn't seem decentralised enough for me personally. Might be a while but i think at some point it will be evident.
If the debt ratio is rising it's risky. Unless our higher demand for debt is sustainable. For example if the ratio is going up simply because we are offering 20%, that's bad. But if it's going up because someone built a successful business on Hive, that's fine. These things can't be run by an algorithm. They require a lot more analysis than plugging some numbers on a screen into an equation.
That's not flawed logic because we've based it on the 20% yield. Now if it's a floating yield meaning i'm not necessarily going to get 20% that still means that it's not sustainable. Also if the price of hive is crashing and the yield gets better. Where is that money coming from? I thought hive has to be sold to create hbd? All these algorithmic stable coins at the end of the day are complete garbage because it loses one essential component.. growth.. who's buying this stuff the reason people aren't taking the hbd deal now is because it's no growth.. nobody around to take it lol. so why would i be so confident about a bunch of devs just making up stuff and they can't even build things to attract and keep people?
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