In the past there was no hive to hbd conversions so hbd/sbd goes up. Now we have this and hbd stays at 1$.... hive supply goes down. From the past we can see that 2019 regular inflation was 8%, with conversions 12% ... so yes more but not so dramatic..... at this moment hbd is in very low supply compared to hive marketcap and we have only 2% debt.... that is rediculusly low .... the hbd supply can expand a lot from here without major concerns ....
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all theory. In general, I agree.
But a swing to 10$, stay some weeks on avg there into bear could end up in major damage.
multiplier under 1$ increase exponential on conversions + conversions = higher MC after = more inflation out of that higher MC for max HBD supply.
So in game theory on max abuse, we have an exponential curve on hive inflation on conversations as the more volatile the market becomes.
I would love to see how luna performs in bear before we see massive increases.
wave algo stable coin losses today 20% for example. MC 1B.
so 200M loss in value. can start panic.
HBD was at 0.6 in the past...the world didnt end....At this point I'm in dilema is a hard peg a good or a bad thing. I mean projects go around such a big hurdle to keep the peg. Maybe it is better to have a loose peg like HBD. Just let everyone knows this upfront and manage their risk this ... if HIVE drops a lot ... then sorry ...haircut... HBD is no longer 1$ .... oh but its not a stablecoin.... well it is like 95% of the time, manage that week, month .... dunno just thinking out loud here
true. but on a big scale, it could be a problem.
and if haircut increase to 30% it can be a problem for the chain.
No risk no gain :)
10% is very conservative, 30% still is, 50% is medium risk
depending on the math.
If we calculate swings in ( remember we have no liquidations), it can end up in a drama inflation for hive.
That would end up in a drama token price. And this end up in " fuck you hive power holder".
I mean first should be a semi-protection of Hive power holder.
If hive inflate on a max abuse curve from 7$ to 0,2$ would mean 200% inflation.
I think you are not calculating in that HBD will not be worth it 1$ if the price of HIVE drops, meaning lot less HIVE can be created from HBD even at lower prices .... 200% is impossible
na I made a post with the math behind it. 200% are possible on max abuse on 7$ hive. Even 50% would suck.
7$ to 0,2$ allow 200% inflation if converting on the edge. In a theoretical move 1% on 1 cent.
Its theoretical.
But every time the conversation finished the market cap increased and allow in the next step a higher amount on HBD in theory to convert.
Makes it exponentially.
In my math, I calculated 100M hive burned for converting into HBD ( so a decent amount) and it ends up in 200% inflation on heavy market swings.
Numbers are right and this would allow attacking the network.
If not all at once, can be also be done to make huge damage as a competitor for "cheap".