Supplemental funding for HBD stabililzer

in #hbd2 years ago (edited)

By now the HBD stabilizer proposal and supporting automation have been running smoothly for a few days, the algorithm has been published as open source, and both the automation and published algorithm have been slightly updated a few times. Everything is going well.

However, it is now clear that the original level of seed funding is well below what can be used. Therefore this new proposal is for an additional 200 HBD per hour (4800 HBD per day) to be paid out to the same account as the original proposal.

By having one proposal for 100 HBD/hour and one proposal for 200 HBD/hour, stakeholders can choose the level of active funding:

Main proposal approved: 100 HBD/hour
Supplemental proposal approved: 200 HBD/hour
Both proposals approved: 300 HBD/hour

There remains more than ample daily budget in the DAO for both proposals to be approved without displacing other approved proposals. I recommend that both be approved at this time.

By increasing the funding from 100 HBD/hour to 300 HBD/hour, we will increase the amount of HIVE purchased and sequestered into the DAO from about 9000 per day to 27000 per day, while supplying 7200 HBD per day that is being demanded by the market (as evidenced by the market premium on HBD). Numbers are at the time of posting and may be higher or lower in the future based on market conditions.

As a reminder, all funds paid out are immediately returned to the DAO, either in their original form (if HBD trades at $1 or below), or in the form of more purchased HIVE than was originally used to create the HBD. The latter represents an immediate profit to the DAO, and transmission of excess demand for HBD into demand for HIVE.

Proposal number is 159

Hivesigner link to approve

100% beneficiary to @hbdstabilizer


However, it is now clear that the original level of seed funding is well below what can be used.

Is there anyway you can illustrate how this is clear?

Right now it is costing ~3.21 Hive to create 1 HBD but the proposal is returning ~3.82 Hive to the DAO so it's a net gain of 0.61 Hive per every HBD that is funded.

Also the DAO has a daily budget of 11,284 but only 4200 is funded so we have more than enough room to fund an additional 4.8k. Considering that the proposal is returniing all of the proceeds from the trades (plus "interest") it's a no brainer.

It is still possible to sell HBD for well more than what it costs the blockchain to create it.

Are you saying that we could have achieved the correct HBD price in two days, if the original level of seed funding was correct?

Conceivably, if unlimited budget were available, and if there weren't some value in starting a more modest soft-launch level (as stated in the original proposal).

I didn't say in the post that the original amount was "wrong", but that a larger amount can be productively used.

If the increased amount turns out to no longer be useful at some point, it will be returned by the bot, and stakeholders can also cut funding if desired.

It seems like daily trading volumes in the order of $100,000 can move HBD on and off the peg (across all exchanges). How would thousands of HBD have any hope of achieving this?

I am not asking because I know one way or the other. I just don't understand the mechanism.

To start with I don't trust reported volumes at all, and it's really unclear, even if volumes are legitimate, how $X in volume translates into $Y amount needed to move the price (and at what rate). They're really two different things.

In any case, it is possible that it won't be enough, but even if if not, it is still of benefit to be buying HIVE for the DAO at a discount.

Discussed a bit more by @onthewayout here

Interestingly, the longer it goes on, the higher the total profit to the DAO. With more funds in the DAO, the budget can be increased further, essentially without limit. We can actually use profits generated by those overpaying for HBD to eventually reach the necessary budget to restore the peg, whatever that is. But there is no certainty on how long that might take.

Still, the longer it takes, the more HIVE we get to buy and sequester. That is really only a good thing for HIVE stakeholders. Let's hope there are a lot of people who want to spend a lot of money overpaying for HBD for a long time!

I guess you'll just have to take his word for it. Lol

Unpopular opinion as always lol

What about everyone that invested into HBD because it's been known to increase in value now being screwed over because it now holds $1 all the time?

There's an old acronym that kind of applies to those: RTFM

There is still no guarantee it will hold $1 all the time. Nor was it ever guaranteed not to. You pays your money and you takes your chances.

What @pfunk said too.

so what is the point of the stabilizer if it won't keep HBD at 1 dollar?

To create selling pressure on HBD toward $1, create buying pressure on HIVE, and generate a profit for the DHF and Hive stakeholders. That may ultimately end up pegging HBD at $1, at least more often than previously, if not all the time, but either way it is pushing in that direction and accomplishing the other benefits.

What does this mean in english? And why is one of the highest awarded posts of all time?

Do you have any idea who buys HBD? Is it algos, idiots, or whales that need to convert to hive but don't want to push the price up?

Speculators betting they can sell it for even more than what they pay would be my guess. These probably overlap with some or all of the groups you suggest.

Ultimately it doesn't really matter except that it's a good thing if we have a product people want to pay a premium for. There can be multiple reasons why that may be so.

A big side bonus of this seems to be that there would be a great trading volume and liquidity, wouldn't it? It seems like an important bonus to point out, as liquidity seems to be so valuable and people are paying really well to liquidity providers, and here we are getting liquidity for free.

Yes it serves a sort of liquidity stimulator and liquidity reward.

I like my HBD at 7$

I like my HIVE at $7

I support this 100%

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You raised your level and are now a Dolphin!

Check out the last post from @hivebuzz:

Hive Tour Update - Communities
Hive Tour Update - Advanced posting

HBD Hard pegged to USD is one of the big step forward!


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You Earned 0.300 WINE As Curation Reward.
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WINE Current Market Price : 1.300 HIVE

Good information lets success together


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You Earned 0.100 WINE As Curation Reward.
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ITO Total Purchase : 0.000 & ITO Last Price : 0.000

WINE Current Market Price : 1.300 HIVE

hope you'll publish results so users can learn to profit from exchanging HBD without recycling funds back into the same circles that control everything

I can stabilize HBD and increase the value of HIVE for half that price.

This is nothing more than wasting resources that create a false economy. It costs more than the value it returns

The proposal has already taken out of circulation more than 150k hive from the market in just a few days. All the funds are immediately returned back to the DAO so the cost to the stakeholders is zero.

That is 150K not in circulation that will be needed. You need the HBD there to allow for people to be able to use it as a currency. That's why it has a peg, Pointless trying to make HIVE a currency.

Removing HBD to prop up the value is a joke. For that same 150K, we could be returning up to 2K per month for infinity to the DHF

Removing HBD to prop up the value is a joke

I don't think you understand how this proposal works or the economics of maintaining the peg. In it's current form there is only one incentive to maintain the peg...when HBD goes below one dollar traders can profit by converting them to hive. To do this they need to buy HBD (which helps bring it back up to it's intended value) and then sell the hive obtained (which puts downward presure on the price of hive).

However, when HBD is trading above one dollar there is no economic incentive to bring the price back down. This proposal gives an economic incentive for traders to buy hive on external markets and sell it to the DAO in exchange for HBD. They then can sell it on the open market and profit from the trade which helps bring the price down.

Right now the proposal is removing Hive (not HBD) from circulation. Your comment is either a typo or you have no idea what is going on (or you are trolling).

All algorithmic stablecoins have similar structures that incentivize increasing or removing coins from circulation.

You mentioned that you could do this for less. Instead of just giving negative comments why don't you submit a proposal to the DAO explaining how you would do it.

Working on the proposal. Some issues around governance of accounts seems to be the hold back. solutions needed there

If your solution is good enough I will support it.

gran información la e leído como 3 veces.

Can authors get their 10% back now that we have carried the devs past that hurdle?

Authors should focus on making contributions that raise the price of HIVE (and downvoting rewards to those who don't), thereby increasing rewards that way. Price changes are easily more than 10%, often on a daily basis.

Price changes are easily more than 10%, often on a daily basis.

Not many authors can control that.

I was laughed at when I suggested that putting 'quality' content on the chain increased its value, in a certain discord.
And, just recently, I've been stopped from serializing arcane books, for profit.
As if curating good works has no value.

If we are trying to grow our network other things may take priority over fattening an already well funded part of the ecosystem.
One of those being the authors that sacrificed when 'asked'.
Another could be incentives to liquidity pools.
Or HBD stabiliztion.

Decentralize the decentralizing, iyam.
The faster the coin spreads farther the better.

I was laughed at when I suggested that putting 'quality' content on the chain increased its value, in a certain discord.

I'm not saying you were wrong, but if you were, then it's pointless to be paying authors.

Clearly that was the opinion of the person laughing, a not uncommon sentiment in the discords.