RE: CONVERSION ROLLBACK!
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Isn't this the exact idea of these conversions -
No, the idea of these conversions is to have the right amount of HBD printed. It has nothing to do with stabilising HIVE price.
If the price recovers in the next 3.5 days you'll lose half of your Hive in the conversion
It is the other way around, You buy HIVE off an exchange, convert HIVE->HBD and get HBD cash. If HIVEUSD recovers, the conversion result is that you sold HIVE for the recovered price so you get almost all of your colateral back (making huge profit on the rest as you got disproportionate amount of HBD 3.5 days ago).
But it is not "at no risk".
The actual risk is that if the price fails to recover, HBD depegs. Not only old HBD loses a huge amount of backing (debt ratio shoots up) but you and your peers printed lots of new HBD to make things worse. In fact market is going to expect this situation so in practice, HBD does not wait for the conversions to settle, it depegs instantly. No time to dump the newly converted HBD even though you get it on the spot. If your gamble on HIVEUSD recovering fails, you are getting your "profits" in USTerra.
Thanks for the explanation, I had to do the math earlier. I still don't see how you'd get huge profit as the actual amounts are calculated at the end of the conversion. Perhaps I'll understand it better after playing around with it
Say you convert when HIVE is worth $0.50 and HBD is worth $1.25 - that means HIVE trades at 0.40 HBD at internal market.
You convert HIVE into HBD expecting to get 0.475 HBD (for every HIVE that is kept from collateral) when you settle (if the price stays the same). It may end up lower (or higher) but as long as you get over 0.40 HBD (ie. price feed stays above 0.421), you are fine.