The reason nobody knows how it works is because it doesn't work. 20% annum is not sustainable, lol. If it were every vc.. investment fund in the universe would be on here lol.
The reality is the answer lies in the instability and it's worse for hive because hive can't grow. It's not like if ethereum or bitcoin somehow attempts it they would have hive volatility as well but hive does'nt even have the liquidity to absorb anything. It's because you all haven't focused on growth like bitcoin myk.. as bitcoin myk grows the pricing charts show it gets more valuable and more stable keeping in mind btcmyk suppose to be a growth model not an income fund but anyway i think you guys will soon naturally figure out why nobody knows how these products work.
Nobody really understands the inflation level of hive or anything they pretend they do and they all don't it's insane. Everybody understands bitcoin myk deflation and it's amazing how the price can only physically go so low simply because the supply is shrinking not growing. So bitcoin myk went form .000025 to it's around like .00034 or so.. over a 10x but it's not amazing it's math.. now what will eventually happen is people will figure that out and the more come in the more the supply will shrink so they being bottlenecked.
I know you guys won't listen nor understand because you all may not think. THe problem is hive is not growing but it's created all these mechanisms and equations that don't mean anything without significant growth. inflation models are for growing economies you all aren't that. Anyways i think you all gotta go through this to truly know how it works. Then like terra luna and celsius it won't be any questions left.
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Of course 20% is sustainable.
It's the debt ratios that become unsustainable.
Market cap of Hive has to go up just as much as people want to hold the stable coin for it to work.
Hive and other crypto's can't expand 20% year over year?
obviously they can.
Bitcoin is doing 100% a year.
DEBT... RATIO
Look it up.
You're uninformed.
People aren't even taking the deal; of course it's sustainable if no one is even taking the deal.
Duh.
I dont know nuffing, but im scared. You cant assume anything, like if there is an assumption that nobody has 2 billion dollars or a malicious heart to break something, think again. If its theoretically possible to break, it will be broken. What ever is happening is because some entity spotted a way to collect free money and abuse a system. Maybe something more sinister. The debt ratio might be a thing, but 20 percent infaltion does not seem sustainable, unless Hive is growing. It isn't.
Having said that, iv been waiting for people to see the 20 percent and start buying HBD and locking up hive. It will push the price of hive up and keep it locked up, i like this but iv no idea if it is sustainable or not.
The most obvious flaw in the logic that it is unsustainable is the implied assumption that this 20% yield is static and can't be changed. Witnesses can lower it to 0% if they wanted to in an instant. It's a dynamic variable that improves monetary elasticity and stability.
If Hive spikes x10 because everyone is buying HBD and burning Hive and increasing the debt ratio and creating massive leveraged risk... then yeah... lower the yield because it's unsustainable. What we are seeing right now is the opposite of that. The 20% yield gets better and better as the price of Hive crashes. Don't even need to consider lowering it while debt ratio is below 5%.
ok, so it makes it seem easier to understand knowing that only if Prices are rising its risky and it can be altered, this is good news. Im still not comfortable with systems like these though only because i like things that just run themselves, they are so beautiful. I dont like governments or banks so the Hive system just doesn't seem decentralised enough for me personally. Might be a while but i think at some point it will be evident.
If the debt ratio is rising it's risky. Unless our higher demand for debt is sustainable. For example if the ratio is going up simply because we are offering 20%, that's bad. But if it's going up because someone built a successful business on Hive, that's fine. These things can't be run by an algorithm. They require a lot more analysis than plugging some numbers on a screen into an equation.