RE: HBD: The Ultimate Stable Coin
You are viewing a single comment's thread:
Can you dumb this down a little please?
Hive's worth $1.
I send 100 Hive to my Savings? I can create 33 HBD, which will be worth $35 worth of Hive a few years later.
I can then spend/send this HBD but that 100 Hive collateral stays locked up.
Do I then need to acquire 33 HBD in order to unlock the Hive?
0
0
0.000
Yes. The only way to unlock Hive is to have a CDP with a higher collateralization percent than the required percent. In this case you are assuming 300% collateral like I did in my examples, but if HBD started trading 'significantly' higher than $1, the collateral percent would be lowered to encourage Makers to create more HBD.
If the network lowered the required percent to 200% you'd be able to unlock 34 Hive without doing anything because your 100 Hive would be fully collateralizing 50 HBD. Therefore in this situation you could either create 17 more HBD or remove 34 Hive, leaving you with 66 Hive and 33 HBD (200% collateral).
Even if the collateral requirement was 300% you'd still be able to unlock 1 Hive (99 Hive / 33 HBD) assuming the value of Hive is still $1.