RE: The Future of Stable Coins
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Does the 20% interest on HBD provide any value for the blockchain?
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?
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.
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.
These assumptions are very unfound, unclear and unrealistic. I mean, you could as well assume that the world will end on Friday.
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?
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.
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The assumption that the majority of HBD will be converted to HIVE is based on the FACT that the vast majority of SBD was converted to STEEM and the vast majority of HBD was converted to HIVE.
There is six years of data demonstrating this. And, yes, I understand that it is an assumption. It is like the assumption made at MacDonald's that people will continue to eat hamburgers with fries.
The statement that "55000*1/0.453 = 121412.80" is something called math.
Yes, I read the Principia. I understand that mathematics is based on a huge number of assumptions. The people who created the computer I use were comfortable with math to put it inside the computers that they build.
Quite frankly, if mathematics didn't work, you wouldn't be able to read messages on HIVE because they are encrypted and decrypted using this thing called math.
The claim that people stopped sending money to HE after the interest rise is based on my following the transactions on Honey.Swap which is the primary mechanism for sending funds between the HIVE and HE blockchains.
There were also accounts that sold their HE holdings, transferred the money through honey.swap and put the funds in HBD.
This statement is demonstrable (assuming of course that the dark arts of mathematics continue to hold true for the remainder of the week.)
I agree that the HE market was saturated. The reduced flow of funds caused coins like POB to go into a free fall.
You are completely correct about that statement. The interest rate on HBD doesn't bring anything at all to the blockchain.
The 20% interest is extremely dangerous because it rewards HBD at a higher rate than HIVE.
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Ermm did you factor in the HBD stabilizer into your calculations?
The HBD stabilizer is a bot, supported by the HIVE Decentralized Fund, that receives, converts and trades HBD.
The fund is funded by the DAO. It existed before the rate hike and will continue to exist after the hike.
It appears to me that this account is independent of the savings rate.
I figure that the HBD Savings Richlist is the best source for analyzing HBD Savings.
How???
If anyone thinks it’ll serve them better to risk forgoing potential profit from hives volatility, governance, for 20% Apr? good for them, hbd is meant to be pegged and not volatile. To me it’s not smart to even think to attempt to convert all one’s hives to hbd for the sake of 20% Apr lol.
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The top HBD interest holder have very little HIVE.
Last month 12 accounts received over half of the HBD rewards. The month before that 8 accounts received half of the rewards. So, we are paying tens of thousands of dollars in interest to very small number of accounts that are not actively engaged in the HIVE forum.
But they are engaged with their money right?
Your insinuations will carry more weight when it’s backed by facts and perhaps figures other than assumptions.
Here’s what that looks like
https://leofinance.io/@dalz/what-is-the-inflation-from-the-hbd-interest-realized-and-projected-or-august-2022
You do know what a fact is ... don't you?
The statement "12 accounts received over half the HBD interest" is called a fact. A month before the number was 8.
The reason it dropped from 12 to 8 was that some of the large accounts converted huge amounts of HBD into HIVE when the price of HIVE dipped below $0.40 .
It is a demonstrable fact that the large accounts converted HBD to HIVE and sold it when the price of HIVE was weak. We can prove these things by looking at the small number of accounts that hold most of the HBD.
Claiming that the large accounts did this because they feared the haircut could be called an insinuation.
The article you referenced contains the line:
I guess I would describe that statement as a definition.
Of course, You might describe it as an insinuation as the term derivative is associated with the financial collapse of Enron, Lehman Brothers as well as the mortgage backed securities and credit default swaps that caused the Great Recession.
The observation that the same mechanism was also at the heart of other problems like the collapse of FSLIC and numerous other bankruptcies could be called an insinuation.
Of course the term "insinuation" does not mean that the claim is not true. The term "insinuation" simply means that you don't like what I said.
BTW, it is a demonstrable fact that a large number of accounts stopped transferring funds to Hive-Engine after the witnesses raised the HBD interest rate.
It is a demonstrable fact that many of the alt-coins have seen their prices collapse after the raise in the interest rate. One can prove this by looking at the honey-swap transactions ... which I did.
It is a demonstrable fact that the price of HIVE has lagged against the price of BTC since raising the interest rates. Here is a chart from CoinGecko.
The facts seem to indicate that the high HBD interest has been bad for HIVE.