HBD stabilizer update November 2023

in #hbd15 days ago (edited)

The May update to the stabilizer funding proposal has just about run its course so it is time to consider what path to take going forward.

The reduced funding provided in May has proved to be largely sufficient. During occasional periods of dislocation (which have not been frequent nor severe during this time), some independent traders have entered the market to take advantage of the deviation and in doing so, assist the stabilizer to quickly restore the peg. Most of the time the stabilizer has been the most active participant in the market, and has kept the internal market reasonably stable around 1.00, often even within 0.1%.

While we have not yet seen additional stabilizer proposals, I've been approached for advice by a few parties who have considered it and may be working on it.

For the next period, I propose to make another step down in funding, from 1000 HBD per hour to 500 HBD per hour. This will continue to push HBD toward the peg and will continue to generate profits for Hive (via additional funds returned to DHF which can be used as stakeholders see fit). However, it will further widen the opportunity for additional stabilizer proposals and independent traders, the presence of which strengthens the decentralization and can contribute to a more robust system.

In addition, the stabilizer continues to receive a few thousand HBD per day from daily votes on the ten @hbd.funder comments, by which the global reward pool funds can be directed to the stabilizer and then back to DHF to be used for other projects, or retained to possibly be used in the future.

I've been involved in several discussions with stakeholders who feel that the global reward pool is too large given the size of the user base and organic demand for content. The @hbd.funder comments are one way to address that, and I would encourage stakeholders who agree with the reward pool not being that efficient in helping Hive relative to the cost to vote for those comments. It is also another way to decentralize funding decisions for HBD stabilization.

Funding from the reward pool also has the advantage of providing both HBD and HIVE tokens to the stabilizer, which helps it stabilize in both directions (DHF funding only provides HBD, which can be converted to HIVE when needed, but this process adds friction.)

As a general observation on HBD, in parallel with the improved stabilization performance and we've seen steady growth of both HBD savings, as well as large increases in HBD being used daily for transactions, particularly within the Hive Sucre community. I would encourage the Hive community to continue to expand use cases for HBD as well as developing new ones. These can add a lot of value to Hive both directly and indirectly.

Many people were skeptical that we would be able to stabilize HBD at all, now that we have done so quite effectively for over two years, let's show the world what it can be used for!

The existing proposal will end and the updated continuation proposal will start in a few days. If you support continued operation of the HBD stabilizer, please vote promptly for the new proposal:

Proposal number 288

Hivesigner link to approve
Peakd proposal link
Ecency proposal link

100% beneficiary to @hbdstabilizer


Hi smooth I made a question post few days ago about HBD daily for transactions but didn't get so many answers. You may be the right person to answer my question/doubt.
Besides the cool thing of pay a coffee with hbd using mobile phone, and according to how the things exactly work at the moment for the generic cases, we are talking about 60 or 70 example but it can be 1000 or 2000 in the future (someone pay in HBD, local store convert HBD to Hive on internal market and send to Exchange to buy fiat), in practice don't you think this ends always in sell pressure to Hive?

The sell pressure comes from the payouts. If you pay out HIVE and people want to cash out their rewards, it's sell pressure. If you pay out HBD and people want to cash out their rewards, it's sell pressure for HBD, which then the stabilizer or someone else has to buy and convert to HIVE, ultimately becoming sell pressure for HIVE. So either way it is sell pressure for HIVE. When you pay people out in something they don't want, there will be sell pressure.

Where HBD can help is the stable value removes the urgency to sell it. You might still want to cash out, but it becomes less important to do so right away to not being taking a lot of risk. So perhaps you let it accumulate in your account for a while, or perhaps you stash it even longer term in savings to earn interest. The stable value is key here because otherwise it is just another speculative token people want out of if they aren't in the mood to gamble. So as HBD has become more stable we should see people more ambivalent about rushing to sell it.

Also, people using HBD for transactions gives them a reason to hold it without cashing out, since they can spend it to someone else who can spend it to someone else, and so on (though ultimately someone along the chain of spending may want to cash it out, the longer that chain, the less intense the selling pressure).

Thanks for the reply. I understand and agree with you, it's all about sell pressure, at some point everyone will sell, unless they want to plant the assets in the garden.
This is the theory, in practice the HBD businesses are all converting HDB to Hive and then to fiat but it may be different one day.
About the stabilizer I've also one doubt.
If more exchanges list HBD and HBD start having more liquidity, sell pressure, etc, it will not be a great pressure to stabilizer to keep the peg on internal market?

I don't actually see that. If you look at the Hive Sucre businesses, at least some of them just sit in the HBD they receive without selling it. I'd guess they'll sell it eventually but they don't appear in a hurry to do so, which is downstream of the value stability being good.

I don't think exchanges make much difference to this directly, though the would give it more exposure which is overall a positive.

This is the theory, in practice the HBD businesses are all converting HDB to Hive and then to fiat but it may be different one day.

Have you run the numbers on that?

By observation but if you have numbers it would be awesome if you share with us. From the 60 or 70 business right now in hive accepting HBD, how much of them are sending money to exchanges and how much are keeping the HBD. I'm not criticizing, they have to pay for what they sell to suppliers.

The 51 businesses on my list are collectively holding 1,998.512 HBD + 9.8 in savings. That's about 9 times the weekly average value transferred (based on 13 week MA). It will take a much more complex query* to compare overall flows, ie. how much is sold each week, how much is kept in business accounts, how much cycles back into local Sucre HBD economy.

Edit: A better comparison is that it represents more than the last 7 weeks in transfer value summed.

*It would have to not just track transfers but also market orders, savings etc.

So it means that those 51 are holding 9x more than transferring, right?
My idea by observation was not that but I believe more in your numbers, that's great! 👍

Many people were skeptical that we would be able to stabilize HBD at all, now that we have done so quite effectively for over two years, let's show the world what it can be used for!

Hear hear! Hive Sucre have been doing a great job showing the world the power of Hive and HBD, hope to see it scale!

I would be ok with lowering post rewards and increasing staking rewards. A controversial statement for sure.

What a great initiative!
nice work.

Hi @smooth . I am happy to be a part of this community and hope to make many friends here. Now I start my new life after prison. I will be grateful for your support.

Wow i like this 🤯

This is very good to see, and I am glad things are getting better. The HBD value is appreciated in some countries who truly see the value, and very soon, many others will see too.

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Awesome. I have convinced all my friends and family to buy HBD and earn some nice APY for the. Next 100 years or more. It’s a very good Retirement Income. Definitely better than any of our old Dividend Stocks. Here’s to HBD Stabilizer … and a Solid Retirement.

I hope you are aware that the HBD savings APR is dynamic and can be changed and even set to zero by witnesses at any time.

Yes… we are all aware of this. Lots of Risk putting anything into HBD or any crypto these days. I lost quite a bit of $$$ with Terra … but now I have thousands of dollars in Capital Losses.

Please can someone explain how we can use/spend/convert HBD in the real world?

You have to sell it on an exchange, and after the fall of Bittrex, soon to be Binance, there won't be anywhere to sell it. But you can always come back here and circlejerk with everyone and tell each other how clever you all are.

The more I read about HBD From different users the more I understand the bigger picture about it.
I was going to talk about all I have been able to understand about HBD but with the looks of things there are still more things to learn.

I am so excited about countries that have been able to use HBD as a means of transaction and thanks to the various steps and initiatives everyone is taking to make this more stable.