Just a friendly reminder that HBD is still trading higher than $2. All blog posts are earning 50% curation, 25% Vested HivePower, and 25% HBD. That means dumping your HBD on the market gets you a net gain of 50% more money than you theoretically should have earned at this $2 price.
Example:
- My payout is $40.
- $20 goes to curators in the form of HP.
- $10 goes to me in the form of HP.
- 10 HBD goes to me... worth $20.
- I now have a $30 payout instead of $20.
It's very clear that the network should be dumping as much HBD on the market as it can to try and maintain the peg. Instead... proposals are being actively defunded now because "they're earning more money than they asked for".
https://peakd.com/me/proposals
You'll notice that the HBD stabilizer are still active, attempting furiously to stabilize the price.
https://peakd.com/@hive.fund/wallet
HBD gets dumped onto the market and returned to the @hive.fund
So when I first heard that proposals were getting defunded I was ready to be outraged. Why would you defund devs from receiving HBD when they can dump the HBD and stabilize the market themselves? But I guess there is some method to this madness. Make sure devs aren't getting more than they asked for and bolster the coffers of the @hive.fund.
There's still 76.5M Hive in the fund due to the ninjamine being pumped in there. It's not like we need more funds but I guess it's prudent to give devs what they asked for? I was gonna say @blocktrades hasn't made a post in for 17 days and we deserve an explanation... but it looks like he just posted one:
Some speculation on HBD price movements and how it impacts proposals
Ah... right on target...
I guess I have to read it now... brb...
I recently unvoted all the proposals that I was voting for (unvoted on a temporary basis only) so that the @hbdstabilizer would receive more funds to fight the price spike in HBD. While I’ve explained my reasons for that action in various places on the blockchain and elsewhere, it seems like it’ll be more efficient to make a post that describes everything in one place, hence this post.
First, I can’t say for certain why HBD price is going up.
But, in my opinion, there are only two reasonable possibilities: 1) a completely random increase by really bad speculators (relatively unlikely I think) or 2) an attempt to pump the price by someone who has previously acquired a fair amount of HBD (this is most probably the reason, in my opinion).
I mean, call me crazy, but considering we've already seen this before in 2017... It's just really bad speculators pumping a thin-liquidity stable-coin and breaking the peg during a mega-bubble year when everyone has money to burn. Everyone knows they are supposed to be dumping HBD right now. Who would buy into this pressure and pump the bags of users trying to exploit our network?
The volume is coming from Upbit. This money is coming from South Korea as it often does. Whether this is a pump/dump attack or simply a matter of pure stupidity is up for debate. Personally I lean toward pure stupidity.
I'm not sure how many of you were in the thick of the #SteemHostileTakeover, but we had many discussions with the SCT community in discord, a very large and powerful faction of South Koreans on Steem. We begged them to stop playing both sides. We begged them to stop attacking the network and voting sock-puppet witnesses. We warned them day after day that their double-agent positioning would only result in an epic backfire. They did not listen to reason, and they were fully under the spell of Justin Sun. They ended up paying the ultimate price of getting no airdrop on Hive for their actions.
The sheer foolishness of their actions was palpable. They could have accomplished exactly the same outcome if they had removed their witness votes from both sides and stayed neutral, but instead they voted both sides and injected themselves into a power a position and attempted to get what they wanted: which was more power (mostly removing downvotes so they could free-farm the network).
To claim that this group wouldn't pump a stable-coin out of ignorance, is ironically in itself ignorant. These guys don't know anything about decentralization, governance, synergy, borderless permissionless networks, etc. They came for the money and power and they stayed for the money and power. They are gamblers.
The reason HBD is pumping is the same reason why BitFinex never printed Tether out of thin air to manipulate the market: THE FLOOD IS HERE!
Allow me to explain:
When BitFinex was being accused of "printing funny money" out of thin air and pumping the price of BTC, guess what was happening to the value of Tether? It was breaking higher than $1. So all these geniuses that claimed that BitFinex was dumping Tether on the market don't seem to understand the basic rules of liquidity: when you dump something on the market, the price goes down. That's not what happened with Tether, is it? The price went up.
Why did it go up?
Because so much money and FOMO was rampaging crypto that there was money flowing into every single token, including Tether. They literally couldn't print Tether fast enough in order to keep up with organic demand of the free market. The same thing is happening with Steem and Hive.
So much money is now being pumped into our respective ecosystems that SBD and HBD can do nothing but go up, because our mechanics for maintaining the peg are hammered dog shit. It doesn't mean anything is sinister is going down, only that our tokenomics are in dire need of some fixing (which is coming soon™).
Hive → HBD conversion operation
This new operation will have more power to pin the price of HBD than the current stabilizer bot, mainly because it will enable faster creation of more HBD. As mentioned previously in the section on the stabilizer, this is the main limitation on its ability to fight a pump in HBD (the budgetary limits imposed on the DHF when it comes to distributing HBD to the stabilizer).
This is a question of intent
Assuming this is a deliberate attack, it's possible that the same users that have been pumping SBD for a while now see that HBD is a target ripe for exploitation in a way that they know already works. They were able to get SBD up to $9 and potentially turn a profit, why not HBD as well?
If this is indeed what is happening they are going to get absolutely wrecked. No one on Hive is going to fall for that BS, so the only possible users to exploit are the trading bots on Bittrex and Upbit that don't know any better. If I'm being honest I'm not too worried about some random trader in a centralized exchange getting wrecked by market manipulation. What I do care about is stabilizing the peg once and for all so users can actually trust it as a stable asset.
Intent is irrelevant
As @blocktrades well understands, it doesn't really matter if this is a malicious attack or not. HBD is broken and needs to be fixed. He's doing what he thinks is right in the moment to bring the most value possible to the network given the situation we find ourselves in, and I respect that. We can use this surplus overflow to pump money back into the dev fund.
Conclusion
For political and financial reasons, it's quite obvious that anyone in control of HBD should dump it when it's trading significantly over a dollar. Anyone who speculates on HBD at these levels is doing everyone on the network a disservice while needlessly making a bet that in all likelihood is a losing one. Dump your HBD now and as soon as your posts payout. I dump mine every day and I have been for a while now.
It will be nice when we can finally put this issue to bed and stabilize the HBD peg for good. Until then we continue to scramble to bandaid the problem. At least we are doing something about it, unlike Steem that just seems to revel in the high payouts without any regard to the purpose of their respective stable-coin.
This is my thought too.. Instead I'm expected to code stuff for free chasing some experimental method of trying to wrangle HBD prices. It fucking sucks.
Is the quote that comes to mind. I trust blocktrades judgement 99.9% of the time, but between you and I think he's totally wrapped up on focusing on the wrong shit (HBD Price) at massive expense to the developer community and thus the health of the HIVE network itself.
"you a net gain of 50% more money than you theoretically should have"
I don't understand where this extra money comes from. Who is losing, so I can gain?
"My payout is $40"
Oh pffffff, your posts never pay out that little! Terrible example :P
January 2021 normal payouts $5-$10.
My how fast things move.
The users losing are theoretically the ones paying more than $1 for HDB.
It's not January anymore! Your payouts are in the $100 range now, a nice clean example number. Maybe 40 was an average.
"The users losing are theoretically the ones paying more than $1 for HDB."
Who pays more than $1 for HDB? I don't understand why they do it, if they're losing money to those of us who are selling. I keep getting told "we're getting extra money right now from the HDB conversion" but I can never figure out where it's coming from. Maybe this question will help. When we AREN'T getting that "extra money", who is?
$40 was an optimal example because it breaks both segments of the author payout into $10 blocks.
Strange question to ask on a network that prints new money inflation on demand out of thin air. No one gets the extra money because it doesn't exist.
The network distributes HBD under the assumption that it is $1.
This value is calculated by the witness price feed average over 3 days.
HBD is minted based on this moving average of Hive determined by consensus witnesses acting as oracles for the network.
When HBD trades higher than one dollar because users are paying more than a dollar for it, the network does not print less HBD. There are no oracles to tell the network how much HBD is worth so it assumes $1. This is where the extra money comes from. HBD assumed to be a $1 value when it's not due to speculators paying a premium.
Okay, thanks.
Nice HIVE consolidation since the last move up, now testing 0.8 USD as support.. oh how I hope this is only the start of good things for this community!
Hive gonna x10 again while the market stands still before the end of the year.
Easy peasy.
I think so too, but if that happened I'd actually have enough money to do something with (other than buy a few bags of groceries), hmmm. My silver is still worth pretty much about what I paid for it, so HIVE is really my main hope at the moment.
Was thinking, even if the rest of the market stands almost still while HIVE rises...
It's going to take a market cap of about 10B for a crypto to be in the top 20. I think HIVE can be in the top 20 again (like STEEM was, back when all the cool people were there).
Currently, HIVE's market cap is about 0.3B.
I realize this is an oversimplification, but by my very rough back of the napkin estimation, HIVE could do a x20 or x30 from this point.
I think a x10 this year is no problem. That would only take it back to the high from the previous bull market.
All this is very surprising to me, I assumed that the koreans were also behind the recent Hive pumps for the moment when happened and coming from Upbit, but if this is an attack I tend to agree with @blocktrades, i don't think that can be a stupid move but a planned one. And kind of annoys me that we can't see the reasons why they do this or what is their real target.
There have been multiple post speculating about this but since you pointed out is also concerning to see Haejin's return, did you notice that?. Because wasn't even mentioned in the post.
My recommendation would be to have our eyes opened and following the events that may come.
SL seems also involved in this in some way.
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Confirming what I said about Haejin, he hasn't been active, I saw only an upvote from him to an artist and thought that was back but he doesn't post anything and it's powering down, so may be only his account following a trail.
While I'm not happy with the actions of the zzhang group, I've never for a second considered them stupid. You can read their posts and see they are not idiots. But the leadership is very shifty, in my opinion.
Based on my evaluation of them, I have no doubt they understand the mechanics of running a pump. It's not that complicated, especially since you don't have to figure it out for yourself, you can just learn by observation. Nonetheless, that's far from arguing that they are responsible for it.
While I strongly suspect there are elements within that group that are profiting from the pumps in SBD and HBD (more from SBD, for obvious reasons), I believe they are mostly profiting from the arbitrage opportunities between the other markets and upbit (which anyone who trades on upbit can do, I'm sure they're not alone).
But to repeat the point from my post and later comment where I go into a little more detail, I think the best reason to suspect an intentional pumper is the choice of HBD as the coin to speculate on. HBD is really low on most crypto radars as a choice of a token to decide will really go up in price (i.e. selection by a dumb speculator). But like SBD, it's a very likely target for a clever pumper, due to it's low liquidity.
And arguing that zzhang would think that HBD will endlessly go up in price (i.e. blind speculation) make no sense to me, because they've had plenty of time observing SBD and HBD performance over time. The one clear rule for SBD is: what goes up, will come down.
So while you're assuming stupidity of zzhang is the most likely answer, I disagree. Mind you, in many cases stupidity can be a likely answer for many perplexing behaviors. But I think the evidence in this case argues otherwise.
Whelp hopefully we can make them pay for this manipulation.
Money talks and bullshit walks.
Can't let users get away with exploiting our network like that.
Still I have to wonder how such deep pockets could fall for such an obvious scam.
It costs a lot of money to pull this stuff off I'm surprised it's worth the risk.
to be fair, they only use it and make a profit from it.
These are the rules of the game of HBD, so if we don't like it, simply change it to supply on-demand (like collateral one). Nobody could pump and dump. over 1$? simple print more. Under 1$? simple buyback and pay the lockups back.
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sounds sexy, where can i buy? :D
This is imo the most plausible hipotesis, as it hasn't sense if their purpose it's to attack Hive, to pump first Hive and then HBD. Actions that actually benefit more that harms this blockchain. Anyways is good to follow this movements closely.
Always crazy to look at HBD. Because I don't see a real demand for it.
But it is a secure bet for them to purge out the market and dip it over time back. Because where is the risk buy at 1$ ( longterm)?
And this is an attack vector, that wouldn't be there with supply on demand (collaterals/loans).
BTW, how fast will conversations work from HIve to HBD? 24 hours?
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I agree, the semi-floor at $1 does make it attractive for a pumper to accumulate around that price, then try to induce a pump.
This is another reason I think it's an intentional pump: the current blockchain-level mechanics for SBD and HBD do encourage it to some extent, even more than a normal low liquidity coin, where the pumper assumes more of a risk that they may experience a loss on coins they picked up in their "accumulate phase" before they initiate a pump.
So, even while the current action by the stabilizer suppresses the potential rewards from a pump quite a bit, I think it is clear we need to further increase the strength of our pegging mechanisms on the high side (most immediately, we do this by increasing the HBD supply being supplied to the stabilizer).
Also, increasing trading liquidity for HBD will discourage such attacks, because of the higher risk entailed to start a pump. But that's more of a long term thing to accomplish.
Here's the spec for the new conversion operation: https://gitlab.syncad.com/hive/hive/-/issues/129
This seems over-complicated in my opinion, more so if you account for the fact that when the operation is finalized the median price is used to make the conversion.
The comment about doing it in that way because it's good PR doesn't convince me that much. As long as the code accounts for not exceeding the 10% debt ratio it should be good enough.
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Holding the funds in a account vs just having them disappear and re-appear isn't particularly more complicated. It's a pretty trivial difference in the coding, or we wouldn't bother with it, just for PR. PR isn't perhaps the best way to put it, it also makes it easier to track how much has been locked up. Which people might be interested in.
That's a more logical explanation. Being able to track how much is in the process of conversion is a plus.
5% fees look to me high.
It should be cheaper.
To become printing on demand, the fee should be optional. Like 5% fee for instant and 0 for 3,5% days ( or longer).
So pools can play out pumpers with 0% ( can be also 0,3%) and bring the price to 1$ and not close to 1$.
we will only become a stable 1$ coin if it becomes an automatic thing.
With the same mechanic that the stabilizer proposal does. With the difference, the profit will payed out as ROI. The scale would world in an unlimited way. But fees can kill the fun.
Long term I think a replacement with a DAI version / less complex would work better.
The initial mechanics were selected because they are very simple to implement, so the new functionality could be included in the upcoming hardfork. And 5% was chosen to be conservative: it should be sufficient to prevent any big swings in the HBD peg but decreases the chance for any gaming of the system.
After we've had a chance to observe how the new mechanism works, we can consider if further changes are necessary, including more complicated implementations.
Sure it's the easiest for the short/mid-term.
5% is IMO top end for a stable coin. Otherwise, the coin can become out of competition compared to other ones.
We need large Volume, the only way I see to abuse is a pre haircut massswap with higher swings, but there is a big random component also there. There is trading less risky.
So if we don't have a problem with a large amount of HBD, we should make it cheap to create them.
Maybe I will hold some too, because 3% also nice for a stablecoin.
I think it's both market manipulation and stupidity. For every pump and dump there is a sucker that falls for it.
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facts
I just did that earlier today. If for no other reason, then because I believe blocktrades & smooth are determined to fight this, which was never a focus before as far as I know, other than at discussion level (mostly).
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Fantastic blog with great information, thank you. I had no idea idea was occurring. I have felt that I was getting more Hive for my HBD dump. I'm not gonna complain about that one when Hive is at near ATH prices.
Helps me grow and provides me that little extra. I do agree though we need to maintain the peg.
Interesting times ahead
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I would agree this just seems like a pump of HBD.
Like you stated SBD has been pumped for a while now.
I think everyone should be selling to the pumpers and taking the free money.
Why not pump the free money into CUB?? (wink, wink)
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No, no, do a pump of Proofofbrain coin. :)
HBD is still a good coin to hold as a hedge. At the very least it can hold its value at or around $1. If for some reason Hive price drops, this may create a good opportunity to buy more Hive with HBD.
Since, regardless the efforts of the hbdstabilizer HBD price did go up, I have a feeling it will do so again and even higher. I might be completely wrong. But I wouldn't be surprised if HBD went up to $8-$10 one of these days. Total supply is too low for continued dumping to make a big difference if the pockets and interest on the demand side are larger.
It seems like a win win scenario whichever way you look at it. If you can achieve peg, great, it works. If you can't achieve peg, still making profit for DHF.
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Not to mention post rewards for the rest of us.
Always always always, calculate the price they are giving you before you decide to trade. The centralized exchanges that will custody your coins often have better pricing. Just don't leave anything significant on them. I leave only dust. The internal market is the safest way to trade HBD for Hive, you may get less than some centralized exchanges. Shop around.
Update: I just read your post. When making trades use only limit orders. The internal market uses only limit orders. If you put a market order, orders can be cancelled new prices can be put in before you execute your trade. With a limit order, you can attempt to buy from the books and if they do the same thing the trade just starts waiting for them to restore their orders to the price you set or until some other user creates a limit order that matches yours.
lol. Are you saying you sold HBD at 80 cents per HBD?
How did you manage to sell below market price? Is that even possible?
I was glad to see the post today that gave reason behind why it's being done etc. However I still don't agree with it but I made that clear by not voting for any of those proposals or upvoting any of those posts. Sorry it's just not something I believe in and I feel it should be corrected on the code based end during the hard fork and publicly announced. Communication on all of these things because this will be the first of many is VITAL to the trust and stability of the HIVE platform.
We all have our own opinions and thoughts and luckily we can use our voting weight to show that no matter how little or small it is. It's the system we have. Now of course most devs hold a huge majority of that share lol but it is what it is. I full agree it's a band aid solution and there are better things to be working on in the mean time. Even though devs via proposals are being over paid so are we as writing articles right?
It's not hurting anyone since I'm sure most of us dump our HBD earned because we know it should be $1 so anything higher than that = I can buy more hive and power it up which is exactly what I have been doing.
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Yeah, Hanlon’s razor does seem to be a likely suspect. SBD is above $8 right now, very reminiscent of the mega-spike from a few years back. If memory serves, it crashed hard from that.
Idiot traders are going to get rekt again. Too bad, so sad.
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I just tried to go over there (steemit) and see how much my wallet was worth but can't access the site, it keeps coming up internal server error. Eight bucks a pop...I surely have to see that before it's gone....lol.
I just tried to go over there (steemit) and see how much my wallet was worth but can't access the site, it keeps coming up internal server error. Eight bucks a pop...I surely have to see that before it's gone....lol.
I waited the night so I guess I speculated but it's dumped now.
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Well, there is an interest on HBD as well - you should consider that in your calculation 😀
More Hive for posts, good IMO :)
but with 10$ HBD, imagine how much hive it would be :O
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I thought Coin Market Cap was playing April Fool's on us.
I am selling all of my HBD to buy HIVE and LEO. That's it. I am doing my part.
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Fully agreed. Dumping like a MOFO. Those greedy little idiot speculators deserve to get their wallets drained once the reverse conversion is implemented.
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So if the HBD price is high I do effectively earn more if I sell the HBD to Hive?
I thought that payouts are adjusted based on market prices....
So they are not or how does this process work exactly?
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Assuming the price of HBD will eventually drop back down to $1 (which it will) then yes.
The value of Hive is determined through oracles via the witness price feed. The average price of Hive over 3 days is the official price of Hive. This price of Hive is then used to determine how much HBD get printed. The higher in value witnesses oracles claim the price of Hive is, the more HBD we print to match half of author rewards to HBD.
The network assumes HBD is $1, so when HBD trades higher than $1 that's just free money and you should dump it. Conversely, when HBD is under $1 you may want to wait for value to pop back up.
Ah okay, now I understand, thank you very much for your help!
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Really interesting post...
Right now, I am thinking I shuold have setup sell orders of HBD on ionomy for $3/each when this pump started. You cannot know where the top will be when a pump starts. So you can end up a bag holder if you do this. There isn't enough inflation from posting rewards to correct this.
I never understood the dynamics of HBD nor did I know how to react to price variations. Nevertheless, a simple question: is this a good time to sell HBD for HIVE or sell HBD for USDT or other crypto?
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How can we get HBD?... I mean I receive only points, no Hive and no HBD