RE: Hive Backed Dollar-to-Hive Ratio To 30%?
You are viewing a single comment's thread:
Except in that instance, people would likely start to convert HBD to HIVE, providing a floor in how far the price of Hive could drop while also reducing the supply of HBD.
Just like we saw "massive" printing of HBD when it was at $1.20, we will likely see the opposite on the downside as the price drops in relation to Hive.
Posted Using LeoFinance Beta
0
0
0.000
Wrong logic.
No floor.
Converting means more supply into more dump.
Special if the haircut is close to coming into place. Market movements would become more extreme because this is like leverage trading.
If we have 30% or 20% and we jump to 10$/ Hive, we will see hive will be the first failed chain in terms of stablecoin. If we are increasing it by more than 30%, tokenomics would bust. Think about 50%.
Price goes to 10$. Stays there some days. Pumps to 12 because of massive demand for hive to converting.
Price falls back to 2$. MC would be at this point 800M so we could have 400M HBD.
Could be 200M Hive by converting. Dangerous as hell if we think DAO only holds 70M and we have around 130M powered up.
I see only negative effects. Special it will never work with the peg to an dynamic asset.
Collateral versions are dangerous too, but would only affect the collateral. Not the hole chain.