For now, it makes sense to discuss the idea of adding the 5% fee to the HBD--> Hive conversion. This will help to deter gaming the system on the downside of the peg also.
Sorry, but this is a horrificly bad idea. I'm really surprised that it's even being discussed to be honest. It would have a similar effect to as if the peg of HBD were set to 95 cents per dollar which makes absolutely zero sense for a stable coin.
Completely untrue.
This applies only to conversions, it has nothing to do with the peg. The peg is freely floating and set by the market.
Arbitrage, as stated repeatedly, still occurs throughout the different LPs and exchanges that have HBD (or wrapped versions).
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At 20% interest rate, the problem doesn't seem obvious. But lets say the interest rate is 5% and the fee to convert from HBD to Hive is 5%. You buy HBD for $1 USD but you would have to keep that one HBD in savings for one year just to break even if you wanted to convert that HBD back to $1 worth of Hive.
In such a scenario, in a liquity pool like PHBD/USDC, people who need liquid funds would almost always choose converting PHBD to USDC, which means the PHBD would never be able to hold at peg of around $1 but be around $0.95. This means that eventually the pool would empty of USDC or conversely PHBD would always be around $0.95.
It would be pegged to a range of 95 to 1.05, which is not meaningfully worse than being pegged to a range of $1-$1.05 which is the current situation. There are other mechanisms that tend to push it toward $1 such as people choosing 50/50 HBD/HP or 100% HP for rewards, and speculation pushing it away from the bounds (makes more sense to sell HBD at 1.05 than to buy it, and likewise buy at 0.95 than sell).
I really hope you're right. I think it would tend to stay in the lower range of $0.95 more often than not as buying HBD at $1 would mean taking a certain time commitment to make up for the 5% fee. Around 3 months before ROI if the savings rate was 20% like currently.
Only converting would incur the fee. If you buy from the market you're not paying a fee. Likewise selling. If you buy from the market at $1 you have essentially symmetric risk, since you can lose 5% if it drops to 0.95 but you can also gain 5% if it rises to 1.05. Neither of these would inherently dominate.