The Hive in that account gets converted to HBD every hour, and that's used to send out to the whatever the DHF is funding.
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The Hive in that account gets converted to HBD every hour, and that's used to send out to the whatever the DHF is funding.
@rishi556, thanks for the answers but you might have created yourself a lot of work on this thread! I have to ask, why create HBD to pay the DAO fund and then buy back Hive? This all sounds more and more bizarre lol!
The DHF pays in HBD so that it pays proposals in a more stable form (to avoid under/over-rewarding for the work being done).
The stabilizer proposal is taking advantage of the current over-priced value of HBD on the market: 1 HBD = $1 dollar worth of Hive, but HBD is trading for around $1.3 to $1.5 right now. But the DHF is able to produce HBD from Hive for only $1 (it's true worth). So the stabilizer is creating HDB for $1 worth of Hive, selling it for 1.3 to 1.5 dollars worth of Hive, then sending the purchased Hive back to the DHF. In practice, I think this ends up reducing the supply of Hive (Hive is burned).