HBD Stabilizer temporarily disabled due to possible blockchain bug

in #hbd3 months ago (edited)

A potential bug was reported by onthewayout

The HBD balance with the DHF/DAO (@hive.fund) is not supposed to count toward outstanding supply for purposes of the haircut calculation, but apparently this may not be implemented properly. If this checks out, HBD will not be properly pegged at 1 USD until the HIVE price recovers or the HBD supply shrinks.

Because the actions of the stabilizer involving underpriced HBD would result in a loss to the DHF (and Hive stakeholders) without the peg in pace, I have disabled these functions. The stabilizer will still sell HBD if the price is above 1 USD, but in all other cases it will simply return the HBD or HIVE to @hive.fund.

Once the issue is fully diagnosed I will decide what if any further adjustments to make. If market conditions adjust back out of the haircut zone, I will reenable the disabled stabilizer functions.

100% beneficiary to @hbdstabilizer

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It is indeed a bug, discovered and fixed a while ago (see issue 140), but the fix will only become active with HF25.

Yes it looks like that will probably fix it, and relatively soon too. Good news.

do we need it after HF25? i would say we can stop after and give it in the hands of hive stakeholders in form of a pool. would be a usecase for liquid hive :) And we know it has currently not the best usecases :D

I don't see the stabilizer as currently constructed competing for the HIVE->HBD conversions. But for <$1.05 it can do the same thing as now.

is there a 5% fee on converting on the fork?

Yes. For $1.05 of HIVE you get $1 of HBD.

plus 3 days time to converting or instant? I think it would not need both and 3 days would average out most time.

Or is there a reason i don't see? The best case would be we print a bazillion HBD and burn Hive with it. So defi platforms can use it as a stable coin.

Edit:
I ask because why should someone do it? If I can sell 1,05$ of Hive for 1,05USDT that's available on a lot of exchanges and easy to transfer. Why is HBD better in that case?

I guess the fee is a more direct money grab from speculator/pumpers than merely using it to buy HIVE would be. Which ends up benefiting Hive (stakeholders) more, I can't really say.

It takes 3.5 days to complete but the HBD is delivered immediately. To account for price fluctuation there is a overcollateralization.

I was thinking, why not use the DAO even if it is losing?

As in, convert the HBD received from the proposal to hive no matter what. Whether the conversion will be profitable or not it doesn't matter.

Then sell the hive for HBD.

And repeat till we get to 1$.

The goal is not to save up money in the DAO but to stabilize HBD.

I don't think a few days makes much difference to stability.

If the price drops you should really just buy because the peg will work again after the fork in the absence of a big price drop. Of course, one does have to factor in the possibility of the fork not going as planned as noted by @demotruk. I think that's pretty unlikely but you never know.

In the long run it can only work if it's sustainable, which means the DAO needs to profit in doing so or we are just releasing as much or more inflation into the market as if private traders do the conversions. Over the course of the period until HF25 any profit/loss won't affect its long term sustainability though, but we may also not want to run it just ahead of hard fork in case there are any hard fork related bugs not accounted for yet.

Well I agree it is inflationary, but I don't agree it is the same as if traders do it.

When traders do it they usually try to get it a profit, so it is very inflationary. However, if the DAO does it at a loss, it would be less inflationary, because that loss is technically a burn of HBD which won't get converted to extra hive.

Edit- actually the HBD burned are already in the DAO, so I think I'm wrong about that


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