HBD Discussions Back on the Table

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(Edited)

Yesterday I saw a post drawing attention to @smooth's proposal to attempt to better stabilize HBD's price around its peg.

The proposal is easy to understand, and if the reader is unbiased or doesn't come with the mind made up that HBD should be eliminated, it might even do some good.

How much good? That's debatable. See, in his post, smooth presented a long term chart of HBD. And it seemed relatively stable, so worth improving this stability.

Well, for reference, I thought I should also include a full chart of HBD.
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A tokens that goes up or down by 50% is not pegged and will never be in these edge cases.

I'd also like to point out the comparative intra-day price movements of Hive and HBD, as shown on PeakD via the widget from Coingecko:
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I check the price of Hive seldom and the one of HBD even more rarely.

It's probably unlikely that all comparative intra-day charts would be relatively similar in volatility. In some cases, HBD might look like a stable coin.

But in this case, Hive was "down" 4.5%, while HBD was "up" 5.5%. HBD was even more volatile than Hive, and has no resemblance of stability.

Could the proposal of smooth fix HBD pegging? Definitely not, in my opinion.

Could it attenuate HBD volatility in normal market conditions (no pumps or dumps, no high volumes)? Probably.

Is it worth implementing?
To the extent HBD will remain and chances are it will for the foreseeable future, and given it has or might have some collateral benefits explained in the proposal, plus the attempt to push for offering interest on HBD held in savings account, which is being discussed, I think it's worth implementing.

Your thoughts?

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8 comments
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I am not really sure. Pegs are very difficult to keep in place. Even the Chinese had a tough time pegging the Yuan to the USD.

The proposal makes sense and cant hurt in the sense that it should help to avoid the major run ups like we saw with SBD in the past.

Will it push HBD to the ultimate goal that it was designed to? I am not sure.

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Yeah, I took it progressively.

It won't fix the peg, but it will probably attenuate the volatility in normal market conditions + I mentioned the potential collateral benefits, like buy pressure for Hive or potentially HBD interest on savings account.

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It is hard to tell how things will turn out with unintended consequences. Of course, it always could surprise us and work.

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Interesting points - and speaking of interest the interest gained on holding HBD in savings I think will actually end up being a larger part of stabilisation than some people think.

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Yes, I agree, that's a good direction they introduced to the discussion.

Because if people will be incentivized to hold HBD instead of trying to maximize their returns when HBD is out of peg, that's less pressure to break HBD's peg.

But the incentive will have to be higher than 3%, most likely. Comparable to the returns offered on other stable coins.

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Completely agree I know with a rise of % it increases risk of inflation (hive side) but at the moment the returns offered on some other coins (DeFi LP included) are just astronomical

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I happen to agree with taskmaster on this matter. Inflation rate, no matter how high it is, doesn't matter if it's below the growth rate.

Growth will absorb inflation, but growth needs to be the focus then, and has to be higher than inflation.

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