HBD stabilizer proposal

in #hbd4 months ago (edited)

Please review my earlier request for comments post on this topic. The details of the proposal are primarily contained within that post.

Per feedback from @marki99, I have made one adjustment: We will table LOW (situation where HBD is below 1 USD) for now. Instead, any time HBD can not be sold for >1 USD, the HBD will just be sent back to the DAO. There are various complications brought up with the sliding peg when the debt limit is reached (resulting in a "fair value" of HBD below 1 USD), and overall, as @marki99 points out, under-peg situations are already reasonably well-handled by the structure and incentives. It is the upper peg which is the most serious deficiency, so it is being prioritized. We may revisit below-peg situations later.

The proposal will pay out to, and the stabilization process will occur within, the account @hbdstabilizer.

Donations (including beneficiary) may be made to that account, and will be used to stabilize HBD upon receipt (if needed) and then the proceeds donated to the DAO.

The initial proposal is being submitted to run for an initial period of 90 days. If conditions dictate, we may submit a revised proposal sooner (for example with a higher budget). If not, then the situation will be reevaluated after 90 days and a renewal may be submitted at that time.

Proposal number is 158

Link to hivesigner to approve

100% of rewards will be donated to @hbdstabilizer

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One thing that I really like about the mechanics of this proposal is that it effectively creates I "sink" for hive while not depleting the treasury of the DAO.

I remember way back in the steem days we had a conversation about creating a mechanism to help the peg of SBD although it was in the context of supporting it from the downside.

After monitoring the effects of the proposal on the market for the last couple of days I would be very much in favor of increasing the amounts involved since it is not doing much for the price on the external markets given the current volume.

Yes increasing is in the plan. Stay tuned.

I would slightly disagree in the theory sense that it is always hard to know the counterfactual effect on the market. Perhaps without the activity created by this proposal over the past few days, the price of HBD would be even higher and the price of HIVE lower.

Hmm, looks like I messed that up. I had originally set it to hive.fund and then decided to change it, but I guess the beneficiary got dropped. I will edit the post.

Heh, no worries.

Would a $10 Hive and $100 HBD not be preferable? Why keep HBD only at $1 if there is more demand? I just want to understand the function more. Any explanations are appreciated!

There is no inherent connection between demand for HBD and demand for HIVE. Yes you could have $10 HBD but that wouldn't imply $100 HIVE or even $1 HIVE without some way to channel demand for HBD into demand for HIVE.

Of course, it could happen as you say. Despite the fact that HBD and HIVE are largely two independent tokens, crypto markets (as with many markets) often move together. But even in that case, channeling demand for HBD into demand for HIVE would tend to increase the price of HIVE even more than otherwise.

Right now we are buying about 30000 HIVE ($10000 worth) per day, taking it out of circulation, and sending it to the DAO. That likely has an impact on the price of HIVE. It is roughly half of the amount of HIVE created per day (inflation) in order to pay rewards. If HBD did go to $10, we would be buying $70000 worth of HIVE (about 200000 HIVE at the current price) per day. That would likely have an even bigger impact.

I always vote your crazy ventures and this one is no different. :0)

Link to Hivesigner to approve this proposal.

Thanks I added this to the post

Voted. Thanks for the mention!

Voted.

An excellent proposal!

Based on some conversations around HBD, my understanding is that, its primarily used by people who are seeking funding for projects and would accept HBD. HBD being stable will guarantee that, they get a stable funding. How is it going to benefit the hive investors ?

Well, the benefit is quite obvious - there will be no additional inflation.

Look at it this way.

Hive is worth $10 usd - as author you earn 100 hbd.
At that time, you can buy 10 Hive with 100HBD - via conversion. If you decide to wait a bit longer and the price of hive sharply falls down to let's say $1 usd, now with the same amount of hbd you can convert it to 100 Hive tokens - 1000% newly tokens are being minted, thus increasing the inflation above predetermined rate.

HBD is good tool during uptrends and has been designed on a premise that crypto in general will rise in price - long term.

Good explanation - thank you - he should have included a link to the proposal here.

The only fix for HBD is taking it out back and shooting it.

Even if this doesn't work, it will still represent added buying pressure for HIVE, taking that HIVE out of circulation and putting it into the DAO where it will likely stay for a good long time (approvals of DAO proposals have been quite limited in terms of budget). This will likely be good for HIVE stakeholders. If people want to bid up HBD to fundamentally unsound levels, as long as they do, we can take advantage of that by channeling the demand to HIVE.

agree, not a fan but better than nothing.

I would vote for it, but I hope we can remove the inflation HDB version and transform it to a scaleable loan version (onchain).

It would be super secure and cool and would give me a reason to power up larger amounts.

That would be theft

I hope it doesn't end up in an HDB potato thing :D

Without commenting specifically on potato, which I haven't followed closely for the past six months at least, I can point to one major difference which is that there are no coins being accumulated by this. Everything is processed quickly and then sent back to the DAO. You can see the past half day of activity since the proposal went live here, as well as the current balance being zero despite 100 HBD/hour being paid out for the proposal

https://hiveblocks.com/@hbdstabilizer

Donations (including beneficiary)

How does it handle the HP. Power down and then handle accordingly?

Yes the bot will automatically power down at the maximum rate and then deal with the resulting HIVE accordingly (immediately send to DAO currently, may be used to buy HBD to send to the DAO if we add support for below-peg later).

what's wrong with HBD being higher than 1 dollar?

It's suppossed to be pegged to the value of one US dollar. It's whole purpose is to be a "stablecoin". When the market overvalues HBD it means that we have miss-allocated demand. That extra demand shold be redirected to Hive instead.

This proposal increases the supply of HBD on the market and reduces the one for Hive. In theory it should bring the value of HBD closer to it's intended price and by reducing the supply of Hive it will contribute to increase it's value.

The higher price of Hive will result in more HBD being payed out for authors. So it is in the best interest of all the stakeholders for this to happen.

thanks for explaining it to a dumb dumb like me

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@smooth,
This might be the best thing we should do.
!wine

Cheers~


Congratulations, @theguruasia You Successfully Shared 0.200 WINE With @smooth.
You Earned 0.200 WINE As Curation Reward.
You Utilized 2/3 Successful Calls.

wine-greeting
HURRY UP & GET YOUR SPOT


WINE Current Market Price : 1.300 HIVE

Lets see how that works out over here. Still me thinks that this is a mess. What do I know, I am just messing around with my prior loosing investment. Lets see, still down $2000 american. Thanks for the tokens, can not believe I just said that, considering my tremendous loss from "steem" or should I say "steemit". Well anyways you can see I am powering down and being really cautious.
By the way, how do I get rid of my previous rug burn that came here from the Steem end? Kind of shows how pissed off I was. I spent my own funds to cover up some really nice "original thought and awesome music" but what do I know.....I am a end user

Proof of donation

smooth author reward: 22.968 HBD and 100.752 HP for @smooth/hbd-stabilizer-proposal 2 minutes ago

https://hiveblocks.com/tx/77f88066a707af3a91fc2a7a2be01ab7e1e2a1ea
https://hiveblocks.com/tx/a8b8c69c9f9261e88723e19731b7634b56929da8

and here we have sbdpotato v2....

Add to the fact that witness are paying interest to HBD when the price is above 1 USD, I see two possibilities:

  • You guys definitely didn't took the time to learn basic economics
  • This might be a big and elaborate whales scam...

I suggest you look closer. The balance of the account is zero and it has never transferred anything anywhere except back to the DHF. Where is the scam?

I said i MIGHT be. Don't want to spend my time on this to find the answer.

It if isn't a scam, is just a rebrand of an idiotic idea.