You are viewing a single comment's thread from:

RE: What is HBD? AKA: currently free money! (AAKA: Don't be the bagholder....)

in LeoFinance8 months ago

Other - non hive - articles I read but also on hive some say that SBD (and therefore neither HBD) are NOT really pegged meaning that there is no asset of the same dollar-value. I still find it difficult to understand who guarantees the 1 USD worth of Hive.

Sort:  

The conversion function is the guarantee, it is the only use case for Hbd. Much in the same way that DAI is pegged by the ability to redeem for ETH via smart contract.

Granted, it isn't a hard peg (hence the deviation), but other than the redemption ability it has no instrnsic value. Long term, it has either value of 0 or 1 Usd.

Wow. years ive been on the blockchain and ALWAYS wondered what the exact guarantee is thank you for putting it so brilliantly!

My pleasure, and glad it clarified things for you!

Of course, it is only so simple if you are denominated in USDT or other currencies like BTC (selling to other fiat/crypto immediately). If you are going to denominate in HIVE instead, then there is a different layer of WHEN you will try and game the conversion/exchange for maximum HIVE. But that is much trickier, and the market will swing this way and that whilst you are trying to time it!