HBD As One Of The Top Stablecoins

in LeoFinance3 months ago

Is it possible for HBD to become one of the top stablecoins?

This is something that might seen unlikely to most people. However, when we consider all that is taking place, we can easily conclude the potential of the Hive Backed Dollar ranks up there with any stablecoin on the market.

For something that was overlooked for so long, HBD is one of Hive's greatest assets. As things keeps evolving, the range of what can be built utilizing this coin starts to reach epic proportions. This is coupled with the fact that HBD is tied to a truly decentralized blockchain. From this perspective, it instantly puts it in a completely different category.

How can HBD conceivably compete with the likes of Tether or USDC? These are listed on so many exchanges whereas HBD is next to impossible to find. Here again we see can easily conclude how this is just another aspect to Hive that doesn't amount to much.

The reverse of this is, like most things tied to Hive, this is an undiscovered gem. HBD has the potential to eclipse any stablecoin that is in operation. Throughout the rest of this article we will delve into the reasons why this is so.

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Transparency

Algorithmic stablecoins got a black eye due to the UST/LUNA fiasco. This has ratcheted up the talk of regulations even further. It is likely that we see all coins of this nature banned by any US based exchange (and likely EU).

A big part of the question is what is backing the stablecoins. Even with the top coins, we see debate about how much they have in reserve. Once again, the mainstream establishment believes that reserves mean something in monetary and financial matters. It is a con the central banks keep trying to run in spite of the commercial banks rejecting them.

Unlike Tether and USDC, there is no audit required. We know exactly what is backing HBD and if the ratio is getting out of proportion. At any time, we can look up the HBD-HIVE ratio. If it does get out of kilter, there are precautions in place to allow it to realign.

Who Controls It?

One of the problems with the fiat currency system is that most people hate the fact that the government or central bank controls the money supply. Leaving aside the fact that this isn't true under fraction reserve banking, it does show how people want sovereign money.

There is a challenge in the stablecoin market: this does not exist. USDC is backed by Circle, who already applied for a banking license. Tether has a foundation backing it. BUSD has Binance. USDD is on Tron which means what Sun says is all that matters.

Do you want another coin that is controlled and susceptible to be taken over? With HBD, none of this exists. The production of HBD is driven solely by the community. Anyone can utilize the conversion mechanism to create or destroy HBD. It is a money supply that is at the discretion of the market.

One of the reasons why governments will hate HBD is because it cannot be controlled. Wallets cannot be blocked. If one has HBD in the wallet, it can be sent to someone else. There is no way to prevent this since nobody is in control of the blockchain.

Building

The biggest advantage to Hive is we are not leaving the future of our ecosystem to someone else. In other words, we are building what is needed.

This obviously extends to HBD.

Here is a simple example. What does it take for USDC to be the main trading pair on a DEX? The answer is that the project team behind the development of the DEX has to decide to use that. Naturally, they could opt for Tether or any other coin they wanted to use. The point is the USDC team has no say in that.

With HBD it is different. This coin becomes the trading pair on a DEX simply because we build it. Consider what the SpkNetwork is constructing. Do you think they are going to opt for USDC or Tether as the stablecoin on the platform or will it more likely be a derivative (wrapped version) of HBD?

The answer seems pretty obvious to me.

Where this really takes on a greater meaning is when we consider the building of more advanced financial features. If we consider lending, bonds, synthetic assets, and derivatives, what is going to be used to conduct those transactions?

Since we are building these systems, we are the ones making the decisions. USDC and Tether do not have this advantage.

Hive develops at a slow pace. We know that without venture capital funding, things tend to take time. The difference is that people on Hive are trying to code actual solutions as opposed to just engaging in hype.

That said, we are able to put Hive's assets in the middle of all we build. Since Circle and the other foundations are focused solely on their stablecoin, HBD offers the advantage of building out an entire ecosystem.

The only one who appears to follow this model is Binance and BUSD.

Solves The Need For USD

We are now in a financial system that is starved for U.S. dollars. People do not believe this. A lot of this extends from the fact that most do not understand the difference between de-dollarizing versus de-dollared.

When China sells US Treasury's it is not because they are de-dollarizing. That country is tied to the USD more than any other outside the U.S. itself. It carries a $50B-$70B monthly trade surplus. This is the net of the activity between the two countries. When they sell anything to the U.S., they get paid in USD. The reverse is also true. All Chinese purchases of U.S. products use the same currency.

Hence, the Chinese need a lot of USD. So they are not de-dollarizing as much as being de-dollared. The selling of Treasuries is the remaining avenue to get their hands on USD. This is what they are doing.

Of course, this is not only the Chinese. Throughout the world, there is a shortage of USD. It is both in the general economy and the Eurodollar system. Hence, we need more exposure to USD and USD denominated securities.

USDC does not provide this. While it is back by USD and cash equivalents, it is not creating any more. Tether is in the same boat if their stablecoin is actually 1:1 backed.

Here again, we can see how HBD solves the issue. While the currency is backed by a USD denomination, it has no tied to actual USD. Each HBD can be converted to $1 worth of HIVE. This means that each HBD generated provides access to the USD since there is the peg yet has nothing to do with it.

Those who are in nations such as Nigeria and Venezuela understand this situation very well. HBD is an excellent option for those countries to protect themselves against the fluctuations of their native currencies.

This is not where the story ends. HBD also has the ability to address the collateral problems. We discussed Hive Bonds on a number of occasions. One of the reasons for this is the fact that US Treasuries are the only form of high quality collateral to the international and banking system. All the rest was proven to be less than desirable.

By creating bonds tied to the staking of HBD, we can provide collateral that has known cash flow, timestamped on the blockchain for full transparency, and very little counterparty risk.

Do you see this being discussed regarding USDC, Tether, or even BUSD?

Building A Legitimate Currency

It takes time to build out a new currency that is legitimate. This is something lost on much of cryptocurrency. There are a number of factors that have to be addressed when looking at creating something akin to the world's reserve currency.

For this to even be remotely possible we need:

  • liquidity
  • depth
  • sophistication
  • infrastructure

Without these components, any currency is destined to be niche at most. With HBD, we are working on this. That is the difference. Since we are putting attention in this area, the potential is to actually get things in place. What other currency do we see this being done with?

The bottom line is that HBD will become one of the top stablecoins if we achieve progress in each of these areas. There is simply nobody addressing all of them at the same time.


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In principle, everything stands good for HBD. But we relly need to reassure that it has the perfect characteristics of a stable coin and not a kind of mild speculative coin, even though it benefits many, in fact, the safest bet is always HBD in comparison to Hive. Because in the long run HBD value is indeed 1 USD or better but in the short run, it keeps hovering around ! USD, sometimes below 1 USD. Even a stablecoin with +/- 5 % deviation is huge. That may not qualify for a stablecoin. But yes, it has all other attributes in good standing with the principle of decentralization. Even the mainstream stablecoin would one day suffer from inner contradictions. So we can say HBD has a bright future to replace those coins in future and it may establish itself as stablecoin, but it has a long way to go.

Is it possible for HBD to become one of the top stablecoins?

For me, it is already the number one stablecoin. I currently have $223.10 HBD in savings. This is already more than my income in real life, which is around 80 000 Hungarian Forint (HUF), which is currently $202.33 USD, because $1 USD is currently 395.40 HUF.

The estimated interest since the last payment (20 days ago) is currently $2.25 HBD. Nowadays I am regularly transfer HBD to savings. I am planning to build this for long term (for years/decades).

I realized that HBD is really a stablecoin.
My currency PHP is getting weaker so I decided to move my PHP to HBD.

I started building my HBD savings this November.
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My main goal before end of the year is to get it to 200 HBD at least.

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A good goal. Earning 20% per year is hard to pass up.

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20% plus being a Stable coin hmmm seems like a no brainer for sure

I'll definitely go for HBD instead of keeping my deflating PHP

Thank you for affirming my shower thoughts lately about adding more HBD savings.

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Just keep going.

That is a sound idea. As long as we keep building out what was discussed in this article, it will be a shrewd move.

We can influence the results through our action.

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There are a lot of HDB to be build up, wild guess, it'll take couple of billions to get generally DEX Liquid.

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Yeah going to require a great deal more.

Consider the conversion that is required to achieve that number and what the price of HIVE will need to be.

It is mindboggling when you think about it.

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How can we get there? How can we squeeze the HIVE supply and Demand by amounting HBD in Pools? Seems like it'll snowball pretty hard from some point on.

Marketing and APY are probably a way, creating affiliate programs for sure, get easy to digest media out there.

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Putting all the love for HIVE aside..

HBD is sort of like stablecoin but not really. For big dollar amount a stablecoin needs to be liquid and convertible to the referenced currency easily and cheaply.

For our day to day in this community, sure it works as we internally arbitrage it back to the market value, sort of.

It may eventually work when there are cross chain adoption and more volume and real time arbitrage to keep the value at $1, a much larger marketcap and volume will be required for the stability and liquidity.

It is a work in progress. As stated, we need liquidity, depth, sophistication, and infrastructure.

The last part is something people are working on. Of course, there needs to be a lot more than that but it is a first step.

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Definitely grateful for my HBD holdings.

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The stability held up fairly well meaning that the 20% earned is a sensational return with little counterparty risk.

As we see in crypto, that is rare.

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USDD as said has Sun behind it, that guy can literally wipe out many projects to save his.
I literally hate this thing but this also make sure that he won't allow any damage for USDD.
HBD >> USDD, my opinion.

Centralized trails decentralized.

Sun controls USDD, that negates it from serious conversation in the areas described in this article.

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HBD definitely has a bright future in the stablecoin industry given that it's built on the Hive blockchain. I think one of the main problems that we have to solve to unlock its potential is liquidity. HBD is still short on liquidity when compared to other stablecoins.

HBD has a lot more problems then liquidity. Build out some of the other stuff and the liquidity will be there.

After all, it is easy to create, simply convert $HIVE.

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"...very little counterparty risk."
What risk is there?

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The blockchain stopping is a risk. Highly unlikely but something that could remotely happen.

HBD not backed by $1 worth of HIVE. There are safeguards in place with the haircut rule and other mechanisms but it is something to keep in mind.

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We’d need to have a lot more HBD for this to happen.

Need a lot more infrastructure for it to happen also.

That is the main priority.

As mentioned in no particular order:

  • sophistication
  • liquidity
  • depth
  • infrastructure.

So it is all in there.

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Hbd is the best thing in the industry in this bear market but getting to this list is not the problem but to building what is sustainable, by the time we get to this level we can maintain it.

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I am not sure it is the best thing. Still a lot of work to be done. But for something that was completely overlooked, we are making some progress.

A lot more to do though.

2023 will hopefully see huge strides made in this area.

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This is a detailed analysis on the possibility of HBD becoming a stable coin.
For me and my friends, we already see HBD as a stable coin.... it appears more clearer now with this blog that HBD has a bright future. Yeah, we all hope forward to that time....... The future is bright.

I have no doubt HBD will be one of the top Stablecoins at least on the DEXs which is purely fine, as it keeps gaining use cases and infrastructures being built around it, it stands a chance to be the go-to Algo-stablecoin.

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It will be on the DEX we build; not sure on others.

But we can only focus upon what we can influence.

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it have a lot of potential but we need more HBD for that

Yes , it's very possible to HBD to become a stable coin 🤩

I think HBD is already an excellent stablecoin, still little known, but I think over time it will become more and more popular


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Very informative post about hbd, thanks for sharing.

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It would be incredible to see a hive dollar in powerful exchanges like Binance

It is more important to get on the DEX.

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I am hard pressed to come up with counter point to this post. The thought of bonds thought within the ecosystem is to technical for me.

This means more reading.

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Your post is quite educative.
Thanks for sharing.

I agree that HBD has the possibility of becoming the stable coin but there is going to be a lot more liquidity and use cases out there for people to get on board with it. it would be nice if those people also became part of the Hive ecosystem. Either way, it's at least a few years out before it can even happen.

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HBD is an excellent option for those countries to protect themselves against the fluctuations of their native currencies.

I can´t imagine saving in my native currency when I see the future possibilities of HBD as a real stablecoin. I am happy with my savings in HBD which is generating 20% for me.

With HBD, there are no fluctuations as long as we can keep maintaining and being positive that it will continue to eclipse other coins out there.

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Like many I too converted my altcoins to HBD because I felt, it was a lot safer. That's the first characteristic met by HBD. And I'm hopeful.

Waooh. I have never found an in-depth article that explains the various advantages of HBD on the hive ecosystema and blockchain in particular. I already have some HBD in my savings. But now, I am motivated to save more. Am reblogging this stuff asap.

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Se a mantenido bien su precio. Tiene potencial