Another, Bigger HBD Stabilization Proposal Needed
This isn't looking good. We're hardly even halfway through the mega bull market. What that might do to the price of HBD is unfortunate. Also, HIVE could use some support when the bear market hits. In early 2018, STEEM was hit hard while SBD remained well above 1 USD until the summer of 2018. I'm afraid something similar will happen to HIVE and HBD this time around as well.
If you look at the proposals for HDF funding:
https://peakd.com/me/proposals
you'll see that there are three proposals (#158, #159 and #166) being funded whose main function is to stabilize the price of HBD by dumping it to the markets in order to bring its price to as close as 1 USD as possible while turning that demand into demand for HIVE.
You can read more about the HBD stabilization proposals here:
https://peakd.com/hbd/@smooth/hbd-stabilizer-proposal
@smooth, could you please consider launching yet another proposal?
What are the implications of HBD staying above a dollar? I know it is supposed to be a stable coin but what's the impact on hive? and asides from dumping, what other measures can be implemented to regulate the price of HBD?
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Some of the potential demand for HIVE is redirected to playing with our stablecoin that unfortunately has always lacked an upside peg.
Not much that wouldn't require precious developer time.
But if developer time were available, I think the best possible solution would be a stablecoin that used HIVE as well as many other coins as a collateral the same way multi-collateral DAI, the algorithmic stablecoin on Ethereum, does. DAI has attracted a lot of capital because it allows a holder of ETH and ERC20 tokens to use them as collateral for a loan taken out in the dollar-pegged stablecoin DAI.
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I think a better comparison to HBD current system is to Haven(XHV) USD. It basically a $1 token equal to $1 in Haven(XHV). However they have a two way peg system. You can redeem $1 of XHV for 1 Haven USD but you can also convert 1 Haven USD to $1 of XHV. Right now HBD "peg" is one way HBD to $1 hive. No can arbitrage this natural peg. However when the Hive to HBD is added this would help arbitrage traders print more HBD fast. As $1 in Hive to 1 HBD would be the game-changer
Exactly right.
All available DAO budget is being used (#166 isn't even getting its full request because the DAO budget is exhausted). The only way to increase funding (and even then, by a relatively modest amount) would be cutting off other funded proposals. There is a plausible economic argument for this, despite the obvious disruption, but there hasn't been wide stakeholder support for doing so and I'm not sure if I would support it.
There are three other approaches:
IMO the current funding of >10000 HBD/day is very significant (relative to the circulating supply of HBD) and is helping to stabilize and restrain the price of HBD even if it isn't quite enough to keep the price stable at $1. We aren't seeing a huge pump to $10 or higher as we have before, and as SBD has seen. It is also channeling 15000 USD per day of buying pressure into HIVE and removing that amount of circulating HIVE from the market. So it is well worth doing and has large benefits even if not quite fully effective (yet?).
Thank you for taking the time to write such a thorough reply!
That's pretty good as it is. Thanks for putting together the proposal and managing its implementation.
That's a good idea. There is no harm in sacrificing a small part of one's author rewards to a good purpose.
That's another good idea.
This comment has @hbdstabilizer set as the recipient of 100% of its rewards.
https://hive.blog/hbdstabilizer/@smooth/supplemental-funding-3-for-hbd-stabililzer
Thank you!