Since the last HardFork a few months ago the option to convert HIVE to HBD was enabled. The blockchain is offering a HIVE to HBD conversions for a 1.05$ fixed price for HBD. With this option the idea is if there is more demand for HBD and the price is going above the peg, everyone has an option to “buy” HBD with HIVE for a 1.05 price and sell the HBD on the external markets. If the price of HBD is higher than the 1.05, a profit is made. The conversion process takes three days and half the HIVE is taken as collateral, while the other half is converted to HBD instantly.
Let’s take a look at the numbers.
At the moment of writing this according to https://hiveblocks.com/, there is 368.8M HIVE in circulation, the HIVE market cap is at 228M. There is 17.8M HBD in circulation (excluding the 5.5M in the DHF) and the debt ratio is 7.8%.
The HIVE to HBD conversions might be a hot new thing for the Hive blockchain, but the opposite conversion HBD to HIVE is there from the beginning. Since the last HF we now have the options for conversions in both directions depending on the market conditions.
HBD To HIVE Conversions
For context, first let’s take a look at the HBD to HIVE conversions in the last five years.
The above is the amount of HIVE created by date from HBD to HIVE conversions. We can see a lot of spikes in the chart. Those usually happen when the HBD price is low and users can convert it to HIVE for a higher value. The last spike is recently in July 2021 when there was a drop in the market and the HBD price went bellow one dollar.
Here is the yearly chart for HBD to HIVE conversions for a more clear representation.
We can notice here that the conversions peaked in 2020, when there is almost 24M HIVE created from HBD conversions. 2021 is not over yet, but in the first eight months there is 7.8M HIVE created from conversions. A total of 72.8M HIVE was created from HBD conversions since the beginning of the blockchain (including the old versions 😊).
HBD Converted
The previous charts were for HIVE created from HBD. Here is the yearly chart for the amount of HBD that was converted in the process.
Interesting unlike the HIVE chart, the peak in terms of HBD was reached in 2019. This is because of the lower price of HIVE in 2020, when a smaller amount of HBD created more HIVE.
A total of 22.6M HBD was converted t HIVE, creating a 72.8M HIVE. A 1 to 3 ratio.
HIVE To HBD Conversions
Now let’s take a look at the recent addition where we can convert HIVE to HBD.
Here is the chart.
We can notice that at first in July 2021, there is not a lot of HIVE converted to HBD, because of the market condition, low price of HBD. Then since the mid of August 2021 the HBD price increased and HIVE started being converted to HBD. The record high is on August 26th when there is almost 1.8M HIVE converted to HBD.
A total of 11.5M HIVE was converted to HBD in the months July and August.
Note on the data above: I’m using the @arcange SQL database and the VOFillCollateralizedConvertRequests table. The amount of HIVE converted above is the HIVE that is effectively converted, excluding the excess HIVE that is locked at first as collateral.
If we compare the opposite conversions (HBD to HIVE) for the same period as above we have this.
I have left the y axis on the same level as the previous chart, for better comparison. We can see that there was some HBD to HIVE conversion in July 2021, when the price of HBD was lower. Around 3M HIVE was created from HBD to HIVE conversions in the period. Still the numbers are much smaller to what is happening these days in the opposite directions.
HBD Created From HIVE Conversions
In terms of how much HBD was created from conversions here is the chart.
A total of 5.7M HBD was created from HIVE to HBD conversions. Most of it in the second half of August 2021. The record was 860k HBD per day.
Note that this is not the only way HBD is created. The authors receive rewards in terms of HBD, and the DHF pays workers in HBD as well. The stabilizer is also receiving funds from the DHF specifically to maintain the HBD peg.
Top Accounts that Converted HIVE To HBD
Here are the top accounts that converted HIVE to HBD.
The @mika account is leading by a lot. A total of 5.5M HIVE converted to HBD in July and August. Next is @alpha, followed by @smooth-a.
Top Accounts that Converted HBD To HIVE
Here are the top accounts that converted HBD to HIVE.
The @hbdstabilizer is almost the only one that have converted a significant amounts of HBD to HIVE. This was in July 2021, when the HBD peg was bellow one, and the stabilizer was trying to maintain the peg. Almost 3M HIVE converted from the stabilizer.
Overall, quite an interesting development for the HIVE to HBD conversions. More then 11M HIVE was effectively converted to HBD, creating a 5.6M HBD. In the same period for July and August there is 3M HIVE created from the opposite conversions HBD to HIVE.
Historically there was 72.8M HIVE created from HBD conversions and we are now at 11M in the other direction. If we want to be neutral from the HBD conversions, there is a lot more space for HIVE to HBD conversions. Still the amount of HIVE that is being converted in this short period of time is amazing. It remains to be seen how things progress in the future, as there should be higher liquidity for HBD and therefore a bit more stability. Also the real challenge will be in a bear market conditions when the price of HBD drops. This was already tested in July and the stabilizer “bought” a 3M HIVE worth of HBD. The peg was around 0.97 at the time and it hold well.
All the best
@dalz
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The only problem i see is its basically just 3 whales who are going Ham with it. If it was hundreds of people id be more positive about the long term effects. Not sure this will really change anything but hey ho less hive on exchanges is certainly a good thing.
There is a lot with more than 1k hive, but more than 100k ... a dozen. I guess that is the number of whales willing to participate.
I knew I would pale in comparison to @mika but I honestly thought I'd be in top 3 of this list 😅
You have been doing quite great :)
Interesting to note how tokens work in tandem, or are able to be used to smooth out rough patches when they appear. Nice piece on learning more @dalz 👍
@tipu curate
Upvoted 👌 (Mana: 60/100) Liquid rewards.
Thanks!
👍 Pleasure!
Sincerly, the new peg with HBD makes it very profitable especially for people who Wants to keep trading it. Loving how I can use it as a stable coin lately as well.
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SO much to learn from this blockchain.
Always something to amaze the holders.
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Yes, quite a complicated thing .... you can tell engineers design it :) Need more sales people
When the stabilizer sends HIVE back to the DHF, that implicitly gets converted HIVE->HBD so that is another mechanism that adds to the explicit conversion transactions. Currently that is around 100K HIVE per day being converted.
Yea I noted that, but those a bit of specific conversions, similar to the premine that is being converted.
Will take another whole post to add those :)
P.S. Looks like we will hit the debt floor soon... any plans for that?
Not short term, as it would require a hard fork and there is a view that it is too soon to bug exchanges again, so it will limp along. The stabilizer will continue to work and convert HIVE into HBD (as long as HBD remains overvalued) due to the fact that HBD inside the DHF doesn't count toward the limit and the donation function (and ninja) doesn't observe it. In the past the stabilizer has been enough to eventually bring the price down, although not necessarily quickly, so maybe that will be enough.
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STOPCheck out the last post from @hivebuzz:
Good information.Keep it up.You have taught many what we don't know.thanks
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All welcome to this platform,am happy to here
Thanks for this breakdown. I was having a tough time wrapping my head around it, but I have a better understanding of it now. !LUV
<><
@dalz, you've been given LUV from @tamaralovelace.
Check the LUV in your H-E wallet. LUV changes soon. (1/1)
Thanks!
In 2020, the trend of HBD to hive was high but in reverse HIVE to HBD is less compared to previous year. Surprising thing is the conversion from HBD to hive is done by single account remarkably. Thanks for showing all those statistics. Its very beautiful to watch the chart by your presentation.
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