Hello everyone, we are powering into February and still Building and Growing here on HIVE, the true #web3 blockchain. Great power comes with great responsibility, and I want to take a moment to remind everyone to take a look at Proposal 206, and why you should vote for it.
I read @empoderat's recent update, where he refers to HBD as 'Hive's Killer App', and I agree. HBD is way more powerful than we probably give it credit at first. Notice that all the new defi platforms have a stable coin attached? Yeah, HIVE did it first (and better) with HBD.
Read (or read again) @edicted's breakdown of HIVE AMM about how value is determined through liquidity. We have an opportunity here to test the theory within the protocols that already have been developed and are being used here on HIVE, let's break down the issue.
Stable coins are increasingly important in the growing understanding of Decentralized Finance. This is because crypto values can be volatile, and this is primarily due to low liquidity. Swap Pools (AMM technology) are superior to order books in a number of ways, on Hive-Engine we have both, the best of both worlds.
Stable Coin Pools work a little differently than regular pools. You may have heard about 'Impermanent Loss', it might be a controversial topic, but when it comes to Stables, I am happy to report there is nothing but 'Impermanent Gains'. If the pool get's out of whack, LPs actually end up with more dollars than they started with. This is a powerful and safe pool to begin experimenting with.
Currently the SWAP.HBD:SWAP.BUSD pool has 120k worth of liquidity, which yields a 0.165% slippage when trading $100 dollars.
This post provides a critique of our efforts. It is appreciated. The first idea is that we don't need to be so deep as long as we are slow, and there is truth in this. I trade 100 dollars, wait 5 minutes, and trade 100 more. I could do this all day! But do I really want to? We need to get deeper if we want people moving in from binance and out to binance at will. No matter how deep we get, using 'chunk trades' will always be better than all at once, something we should all learn. We are not ETH - we can easily do 2-3 tx without worrying about TX fees.
Don't we want thousands of dollars to flow in and out of our platforms?
Yes we do, and for that we need deeper liquidity pools.
The second critique is that 130k is a lot of money for this. And with 130k 'we' could do something else. And this I agree, of course, and hope that other people do propose to do other things, all year long. After all, that is what the DHF is for - make your proposals!
Not all proposals deserve to be funded, that is the decision for each voter to make. But 'something else that hasn't been proposed is a better idea', to me is not a great excuse, because for sure there are infinite 'unproposed ideas' that may be better or worse than a proposed idea, but of course we can only vote on the proposed ones.
So far we have 26% of the votes required to get funded. We need quite a bit more. If you think, like I do, that this proposal could be a game changer for bridging to HIVE, I encourage you to vote, and tell all your friends to vote.
Can't get enough HBD
One of the issues with HBD is that there really isn't enough of it. This is a problem in practice only during certain moments, in times of high HBD demand.
In order for HBD to have a high demand, we need appropriate 'HBD sinks', and these uses have been growing. When there is high demand for HBD, the price can go over one dollar, allowing us incentives to print more HBD on demand, this doesn't happen until HBD goes over about $1.05.
When @empoderat sold his SEED token only for HBD, HBD pumped above $1. Coincidence? Maybe, maybe not. All I know is that the more uses (sinks) for HBD, the better. This is our stable tool, and we need to learn to put it to good use.
@brianoflondon has created a @v4vapp - Bi-directional bridge to connect lightning network with HIVE. We have talked about how HBD might be the easiest stable coin for El Salvadorians to get their hands on. HBD:BUSD is another bridge, and bridges are important not just so people can come in, but because they generally don't come in if they feel like they can't get out again.
Proposal 206 is an experiment, yes. There are some things to test, like - Will people really come? Will HBD and BUSD find a home in this pool? Or will we just 'pay too much' for low liquidity?
But it comes with amazing precisions, since we can remove funding at any time, we are not committing more than 329 dollars per day to this venture, if we don't like it after a month or two, it can lose funding and fade into obscurity. But....
What if it works?
If it works, we will quickly trap 500k HBD and 500k BUSD. This is a serious amount for HBD, even for BUSD! Could we leverage this into a Binance listing for HBD? We sorely need that - it would be another sink! This was an idea from @empoderat - he thinks @lordbutterfly might be the right one to ask about this.
500k HBD is north of 2% of the total 23.5 million HBD supply currently (at the time of posting). If funded, this proposal will start pulling up on the HBD price through demand almost immediately, but surely over the first month funding as the APR climbs.
Who's voting so far?
So far we have a nice number of Orcas and Dolphins coming out to support the project. We also have the support of the Splinterlands project, through their main account @steemmonsters.
But we need more votes. And we probably need more posts about this. I would invite anyone who has already voted and has some knowledge to make a post, like a @forexbrokr post would be great.
Who's not voting yet?
This proposal has only existed for a week, and I think its safe to assume that most of the non-voters have just not had a chance to see it yet. I want to invite @theycallmedan to take a look at this project and provide some feedback.
Who else? Let's tag people! I am willing to give out HIVE SBI bounties to accounts that tag people who might be interested and actually get them to vote. This is how important I think this is.
As a reminder, I am not making any money on this and neither is @gerber. I benefit the same way you all benefit, by growing this ecosystem and helping it be and remain competitive across a growing crypto landscape. We need to be more interconnected, not an island in the ocean, to reap these benefits.
Please provide feedback
And of course Cast your Vote for Proposal 206!