HBD Defense: The Nuclear Option

in LeoFinance11 days ago

The cryptocurrency world was filled with discussion this week about the situation with UST and LUNA. It made the stablecoin market jittery along with getting the usual political folks up in arms.

Before going any further, let us make this clear: this is a mental exercise designed to stimulate discussion. So please partake in it and let your views be heard.

When an event failure like UST occurs, it is best to analyze and try to learn from what happened. This is how we can build better systems.

While it is true that HBD is vastly different from UST, it is worthwhile to investigate all options.

With that out of the way, let us look at the nuclear option to protect HBD and HIVE.


25% Conversion Rate On HBD --> HIVE

As they say in Texas, go big or go home.

The point here is to make the conversion mechanism rather unappealing. Certainly, we want it to exist yet it will be costly to utilize it. This is removing one of the major points of vulnerability that affected UST.

Many feel that algorithmic stablecoins are worthless. This is only true for those poorly designed. If we take the proper approach, we can build something much better.

Is what we have in place enough? This is something we need to keep asking.

Nevertheless, for this exercise, we will put a 25% fee on converting of HBD --> HIVE.

This move makes it very expensive to try and game the HBD system like UST. To stage an attack is going to cost someone in the ways spelled out in the linked article above. However, with this fee, it is really going to turn people away.

After all, the main point of these features is to deter people from engaging in nefarious activities. It is impossible to stop everything. However, we can make it as unattractive as possible.

The 25% conversion rate seems absurd until you think the process through.

Growth Versus Security

This is essentially committing Hive to security over growth. It is putting us on a path of steady expansion of HBD while severely restricting a point of vulnerability. For many converting to HBD is not as attractive with a steep price to move back.

A challenge with these types of stablecoins is when the attacker (or even market forces) moves to generate a great deal of the backing coin. In this instance, a printing of a lot of HIVE would expand the float, driving the price down. While it should not matter in theory since value is simply being transferred, we know markets do not operate like that.

As witnessed, one the backing coin starts to slide, it enters a freefall. This has a similar impact upon the stablecoin as investors run for the exits. Ultimately, both tank.

Having a stiff conversion fee would severely deter someone taking an attack like this. After all, it would be an instant 25% hit along with the 3.5 conversion time on 50% of the trade.

It is rather obvious TerraLabs favored growth over security. While a blend is necessary, we see how important security is.

Community Controlling The Coin Makeup

The idea of the conversion mechanism is to give the community the ability to control how much of each coin exists. Putting a high fee does not totally eliminate this since it is still in place. If one is willing to accept the fee, conversion can happen.

However, there is another piece to this. It puts HBD creation, for the most part, in the Decentralized Hive Fund. Once again, we see the HBD Stabilizer coming into play.

As noted in the past, this application has roughly 150K of HBD to distribute each day. It enters the Internal Exchange to swap HBD and HIVE. This activity generates a profit over time that is fed back into the DHF. This helps the balance of that to grow.

We also have to note as the value of the DHF increases, primarily due to the price of HIVE, the more that HBD Stabilizer could have to play with.

Whatever the numbers, we can see how this could be the primary mechanism for conversions onto the market. Certainly, it is not the only way to create HBD, as we will discuss in a moment.

Of course, other projects could build applications similar to the HBD Stabilizer and submit a proposal. We could then have a number of these bots operating on the Internal Exchange, feeding the DHF.

This makes the Internal Exchange a vital component to the Hive ecosystem.

HBD Generation

As use cases for HBD are built, there is going to be a lot more HBD required. However, it is important to take a somewhat measured approach to avoid the situation similar to UST.

This can be accomplished by looking at the HBD creation features that exist.

  • 50/50 option in reward payouts
  • Conversion mechanism
  • Interest in Savings Program

The first obviously is not going to change much. We also mentioned the conversion mechanism. However, the third does post interesting possibilities.

What does the interest in HBD in Savings really do? Sure it is a great return for individuals utilizing it and, hopefully, will attract more capital over time. That said, there is a basic function this serves:

It generates more HBD and gets it out into the open market.

Here is where we can see the ability to expand the amount of HBD. Since the Witnesses (Block Producers) set the rate, they can determine how fast expansion will take place. This can be done by looking at what is in the Savings and how much is going to be generated.

We discussed time vaults in the past with Hive Bonds. Ultimately, this allows Hive to really expand its offering in the Fixed Income Market, moving towards being one of the most decentralized options in this area.

If the fear of large amounts of HBD being converted to HIVE is reduced due to the high fee, we can look at expanding the float through this path. It also feeds into a more robust Hive Savings Bond program.

HBD Contraction

One of the concerns has to be the ability to contract the HBD supply when needed. Money equilibrium is vital. It is great to expand the money supply yet the reverse also is required at times.

Money ultimately comes down to supply/demand factors. Unfortunately, with the present system we see times when there are shortages since our currency comes from the commercial banking system. When the money creator is for profit while also serving as the distributor, we see money flow to where it is most profitable, not where it is needed. Or actually, a better way of phrasing it is when as opposed to where.

If the HBD --> HIVE conversion mechanism carries a steep price, how do we get HBD out of circulation in times when is low? Hopefully time vaults would negate that to a great degree and an increasing in the interest rate could help to soak up free floating money.

However, in the event that is not enough, we could turn to the HBD Stabilizer again. If people are "dumping" HBD, then that is what it is acquiring. The HIVE from the DHF will be swapped for HBD, which is fed back into the DHF. While that is not technically removed from circulation, it is locked up and distributed slowly. In the end, the effect is the same.

Thus, we have a number of tools available to us whereby money equilibrium can be achieved. This should be a goal of any monetary system.

In Conclusion

One of the primary benefits of this is that it makes the Internal Exchange an important part of the entire ecosystem. How this can be leveraged to enhance the entire ecosystem will be discussed in an upcoming article.

While the rate of 25% on the conversion might not be accurate, the point is clear. If we can shore up one of the points of vulnerability while still having the ability to generate HBD, we could be taking security one step further.

What are your thoughts? Does this make sense to you? Let us know your views in the comment section below.

If you found this article informative, please give an upvote and rehive.

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This is nonsense / an investor with a good amount will never go for it - it scares away people with big money. But you can collect a million homeless people on Hive)! Hurray!

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Why does this deter big investors? Are most investors looking at the conversion mechanisms?

I would say the bigger hindrance to large investors is the 13 week power down time. More are going to stake than mess around with conversion mechanics.

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I would say the bigger hindrance to large investors is the 13 week power down time.

This is also a fact!

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The lackluster ROI on Hive staked doesnt help either.

3% is not real attractive to people especially since most will have no interest in curation.

That is something else that needs to be addressed.

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Agree there should be a way to not have to deal with curation as a passive investor.

But you can collect a million homeless people on Hive

Not even that.

Interesting thoughts and ideas. So first of all, thank you for sharing them.

I would say that the 25% conversion rate is too high. Even a single digit rate 5-10% would be enough in my opinion as you also have to take into account the time delay! 3 days to convert HBD to HIVE is probably the best defense against death spiral.

This is too much of a gamble for whales out there and therefore makes it hard to abuse.

The time-vault on savings is also a brilliant idea.

As you stated, the most important feature we need is a use case for HBD or a way to make the supply diminish in case this stablecoin gets out of hand (let's assume if it represents more than 1/3rd of HIVE MarketCap, this might be seen as systemic risk).

Thanks and take care, let's keep reflecting on the best path forward.

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I agree it is a high fee. It is basically death to most using the HBD --> HIVE conversion. But if someone truly wanted to remove the incentive to use that as an attack vector, that would be it.

I do believe that if there is a fee on the other side, why not have it with HIVE to HBD too. Is 5% enough? Now we are getting into details which nobody can truly know.

But an interesting discussion anyway.

The time-vault on savings is also a brilliant idea.

Yeah it seems like, in listening to one of the core dev meetings, that it will be programmed in the next hard fork (the one after the June HF). How that will look I am sure is going to require some discussion and, of course, then the witnesses will have to set an interest rate for it/them.

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I think the 25% is too high as well, since we throwing ideas out perhaps we try 7% not sure how much of an impact towards security that will make but 25% is quite on the high.

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I think whatever mechanism is put in place, it should be self adjusting based on the activity. The amount of conversion happening, the lock time etc. Should auto adjust based on where funds are flowing to etc. Defining these sliding scales is not an easy task of course.

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25% Conversion Rate On HBD --> HIVE

You've missed a somewhat critical component of this issue.
  • It doesn't matter matter what we peg HBD to.
  • The value proposition of HBD is that it's stable.
  • Reducing conversion rate on HBD >> HIVE 25% does nothing.

If we peg HBD to 75 cents worth of Hive... that's exactly the same thing as pegging it to $1. Nothing has changed.

On an incentives level, lowering the conversion rate to 75 cents completely kills HBD because all inflation will cease to exist. There's no reason to take a 25% pay cut on HBD payouts when we can just choose the 100% powerup reward for blog posts.

It's the spread.

Assuming that the 100% power up option is changed to be the exact same dollar value as 75 cent HBD, the real issue is the GAP between the HBD >> HIVE conversion and the HIVE >> HBD conversion. Currently that gap is 5%, which is already too high and will obviously be lowered soon™. 5% was just a good number to test since HIVE >> HBD conversions are new and need to be tested for vulnerability. The goal is to reduce that gap to something like 1% so that HBD becomes even more stable... which again, is the entire value proposition of HBD.

UST played it fast and loose, and they got burned.
HBD has a proven history of non-systemic failure over years.

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UST played it fast and loose, and they got burned.
HBD has a proven history of non-systemic failure over years.

Although I agree you. Others will not see it that way. The prevailing view will be that HBD's proven history is simply the fact that it has such a low market cap that no one has bothered to aggressively test or attack it.

It's sort of like saying my house is secure because it's never been broken into. However, others will point out that there's not much in it worth stealing, thus it's never been broken into.

If we are going to use that metaphor we could say that the UST house was unlocked and had billions of dollars cash just sitting in the front room with the windows open, while HBD has gold bolted to the floor with an armed guard. The gold is heavy, and even if you get past the armed guard you have to unbolt gold bars individually and slowly make off with the loot and hope that other people don't show up to stop you. There are cameras everywhere and a community that's watching.

I mean clearly HBD has been aggressively tested an attacked because we've broken the peg for months to the downside. This created unintended inflation, but surprisingly most of that inflation was created because we broke to the upside and not the downside.

The hysterical irrational comparison of HBD to UST is absurd.
It is only happening because UST failed miserably (which was unavoidable and also predicted).
But now that it's actually happened people think they get to chime in and feed the FUD monster.
Like, it's cool... they don't get an opinion and the people that actually run this network know better.

Which is nice.
I love Hive and the fact that we aren't a democracy.
It's great, and political arguments like this one prove it.

I agree that the comparison does not hold true. However, that will not keep people (i.e. the general public) from making just that comparison.

We need to be eloquent in our speech (as you have been), able to clearly explain WHY the comparison does not hold. The battle for widespread acceptance of HBD has become even more of an uphill one, as a direct result of the LUNA/UST debacle. However, it might turn out serendipitous if we can consistently and eloquently explain the differences.

Personally I would just stick to the basics:

  • 10% haircut rule
  • 3.5 day conversions

At the end of the day I don't think it matters what people think.
Dapps are going to build on top of HBD (for good reason).
People who want to use those dapps are going to need HBD.

Simple as that.

Creating demand for HBD has nothing to do with convincing newbies it's safe.
It's about essentially forcing people to hold our debt out of sheer necessity.

Want to play this game?
Go get some HBD.
No, we don't accept USDT.

thanks for this example between UST and HBD, it helped me better understand the differences between the two stablecoins

If we peg HBD to 75 cents worth of Hive... that's exactly the same thing as pegging it to $1. Nothing has changed.

That was the rationale for my 'locked long-term value' idea (which I briefly explained here) instead of the flat 25% fee.

The "B" in HBD stands for the fact that 1 HBD can be converted to $1 worth of HIVE, automatically, at any time, with zero third-party involvement. However, that also represents a vector for attack.

I agree with @taskmaster4450 that we need to take any such attack vector seriously. There are at least two ways to deal with that. One way is to exact a high fee for the conversion; however, as has been pointed out, that in effect just makes it a HIVE 3/4-backed Dollar instead of a HIVE Backed Dollar, which just adjusts the peg from $1 to $0.75.

My thought was: What if I can always get $1 back for every HBD, and that I can do that automatically, at any time, without a middleman (so that it remains a truly HIVE Backed Dollar) but that when I invoke that feature, it pushes a portion of my liquidity out into the future?

It shouldn't matter, from an invested-principal standpoint, as long as HBD remains stable. I will still earn interest on my suddenly-illiquid HBD, I just can't spend it until some future time (I initially suggested one year, but maybe 6 months or even 3 months would suffice).

The point there is that if my intent is to wreck the value of HIVE by attacking the automatic-conversion mechanism, I have to forfeit a large fraction of my principal to accomplish that. Make doing so painful enough that it won't be worth attempting (or at least much less so).

First of all, thank you @taskmaster4450 for this informative post. I'll always learn something new!
The way I see it is trying to avoid or de-risk the vulnerability and volatility of the HBD or Hive ecosystem. It's about growth or security. Long term vs short term. I think it's great to build the security at the cost of the growth. Because a massive growth without correct stability is bound for a freefall. But I guess we have to keep the investors in mind ;)

It is a process of weighing and there is truly no "right" answer. How to balance the two is a difficult question to answer. Nevertheless, it is something we must figure out.

Going to have to be some trial and error.

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Is it just me who thinks that HBD is under detected and not much accepted in an exchange is now a good thing? lol. I know it's not that good but it gets protected against purposefully made attacks. I wonder if not getting much popular is a good thing?

Certainly it is helpful at the moment. We have time to build resiliency for HBD. To me, some of this starts with building use cases for it.

But I would agree. As with a lot of this, being under the radar and overlooked can be helpful.

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I think there should be a fee % on HBD to Hive conversions.
As safety is as important as growth.
Nobody want something to happen as did now what we saw this week.

We need to find the right balance in this. Discuss this even more.
The fee can’t be to high also, as some people on Hive won’t want to convert anything anymore when it is to high.
So you loose on that, and we don’t want that either.

Further the bond for holding HBD longer in savings is a great idea, like I said before, to generate more HBD. I’ll jump in on that for sure 😎

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the 25% conversion rate would discourage an investor in my thinking. It could be an option for those who decide to have liquidity within 3.5 days or set a weekly / monthly safety limit of HBD to be collected while maintaining a tax rate of 5%, increasing to 25% if that limit is exceeded.

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Could there be more than one conversion percentage?
25% for large transactions but 5% for everyone else for example. The 25% rate as a “circuit breaker” for emergencies and the 5% rate for routine transactions? With a mechanism to prevent large transactions disguised as thousands of small transactions.

I would presume that could be programed in.

Or a change in fee based upon some other metric such as how close we are to the haircut. If it is within, say, 5%, the fee jumps greatly.

Although there is the haircut to prevent massive amounts of HIVE being created so we do have defenses.

But ideas like this could be viable to. Again, simply operate as a deterrent.

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What you are proposing is raising the upper peg of the HBD. The upper peg is more important to the chain than it might seem.

1 HBD is always $1 in the perception of the blockchain. So when HBD is trading for $1.25, Hive blockchain still prints HBD assuming the $1 rate. What does this result in? Overinflation of both HBD and HIVE by creating a fake haircut limit.

This fake market cap situation happened on Steem when the SBD price went up to $10-$15. The actual market cap of SBD was 10-15 times bigger than the internal market cap for SBD. When SBD hit the haircut limit at that point, it was too late. The excess SBD got converted into STEEM and printed 10x more coins than intended. As a result of the excess printing, STEEM and SBD both experienced a downward spiral that tanked the price of both tokens. SBD was under $1 for months and STEEM dropped to $0.1 during that time. It took 3 years to kinda recover from that. I would say HIVE price would be much higher if we didn't have that overinflation in our history.

We implemented HIVE to HBD conversion mechanism to help the upper peg and not have that shit show again hopefully.
Edit: I wrote this thinking the proposed fee is on hive => hbd conversion. This comment doesn't make sense otherwise.
Edit2: A fee on HBD to HIVE is meaningless. You are changing the peg from $1 to $0.75 essentially.

We implemented HIVE to HBD conversion mechanism to help the upper peg and not have that shit show again hopefully.

That is unaffected by what is mentioned here.

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Sorry. I thought you meant 25% fee on HIVE => HBD.
Got confused there. My bad.
This is much worse. It breaks the peg right away.

Yes but the 25% fee makes it less useful in that regard. It allows HBD to reach $1.25 without much resistance. Assume HIVE's market cap is $10 billion. The haircut rule won't print more than 3 billion HBD (considering the next hardfork). But HBD being $1.25 means 25% overprinting. $750 million more HIVE.

You are changing the peg from $1 to $0.75 essentially

I don't agree with this because there are other places that the peg applies, such as choosing between 50/50 and 100% HP payouts. If HBD gets too much below $1 posters will switch to 100% HP en masse and the supply of HBD will dry up.

A 25% fee would make the downside peg weaker but it isn't quite the same as moving it to 75.

Maybe in theory.
There is no practical peg without an actual conversion to the $1 value. There is no guarantee for the peg. Thus you lose the trust of investors and holders in the value of the coin. And the trust is your only hope of holding the peg anywhere near $1 in this case.

You have to consider that the HBD supply won't dry up as long as it's trading above $0.75. Because there are no conversions to burn it. You are just printing more HIVE with posts.

So the lower peg essentially becomes $0.75 because conversions won't take effect until HBD hits that price. And as we all experienced with UST, higher APR can't save your speculative peg.

UST had burning (conversion). That didn't save it either, so that's not a good argument.

With conversion at 75, that would be a hard-ish lower bound, but that isn't the same as a peg. This effectively forms a range (band), as we see with the upper conversion at 1.05. That doesn't mean HBD hits 1.05 and stays there. It usually trades in a range around 1.00 to 1.05 (can go a little above or below before market forces and conversions bring it back).

In terms of market forces, it would definitely make sense to buy at 75 because you're backstopped. And it could run to 1.05! What about buying at 76? Well, 1 cent risk, 29 cent upside, still not too bad, and until you get to 1.00, no new supply pushing it back down. So probably a pretty good bet. How about 77?

You're right though, it would work better if there were more sinks for HBD, beyond just not creating more. The only one right now is creating proposals for DHF, obviously that is very small.

Buying in hopes of a higher price is a speculative value. I can say there is nothing pushing the price above $0.75 other than that. But there are HBD coming from DHF and post rewards pushing the price below $1. So HBD tends to hit the lower bound more often than the upper bound.

You are not wrong though.

There's nothing pushing it down to 75 either. It's all speculative value within the band, and currently the band (according to conversions) is 1-1.05.

HBD hits the lower bound at $1 frequently because it keeps getting printed at a high rate as long as it is $1 or more, but if it stopped getting printed at $1, it wouldn't necessarily trade down to $0.75 regularly. There's nothing to push it down except speculation, and that can go either way.

DHF is a good point. That keeps getting paid out (essentially printed) even <$1 since there is no option on payout. That's much smaller than post payouts though (excluding stabilizer which returns it).

Anyway, I don't think the fee is the way to go.
I don't know what problem it is trying to solve by weakening the lower bound. In the case of UST, even if there was a 25% fee, it wouldn't matter. I would argue it would even make it worse. Without the fee at least there's a promise of $1 value that keeps the panic farther away.
We have $1 value promise as long as the haircut rule is not in effect and I would say that gives enough confidence in the HBD to not cause any sort of panic. Even if panic happens, we assume the HIVE market can absorb the debt because the debt is not that huge.
I think you could argue 25% fee is protection against the HIVE price going down. So we let HBD go down to not print more HIVE. But I don't think it's worth the trade-off.

Edit: The haircut rule is doing exactly that though. It keeps printing less and less HIVE per HBD when it's in effect. So you could say we already have this mechanism.

To be clear I don't think the 25% fee as presented here is a good idea. My only point is that doing so does not "move the peg" and make no difference, as has been claimed. There are multiple aspects to the peg, and moving only one of them is not the same as moving all of them.

What does the interest in HBD in Savings really do?

Providing the most interesting part and the main selling point of the Hive Dollars (HBD).

Well from the blockchain perspective (or ecosystem), it is a means to get more HBD out there.

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The DHF can be a central unit of stabilizing force if its budget gets way bigger and it's well connected to all relevant third-party DEXs and CEXs for arbitrage operations. It'll probably not be able to pull all the weight by itself, but that's not a bug, but rather a feature.

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Don't you think devaluation risk is amplified when the stablecoin supply is linked to valuation of the governance token of the blockchain?

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Ultimately the value of a stablecoin comes down to its use cases. That is what it is lacking throughout. But the backing of a governance token is not a problem. In fact, it gives more reason to hold the backing one, which should help the price.

We still need more reasons to hold Hive.

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We still need more reasons to hold Hive.
Agree on that..

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Bang, I did it again... I just rehived your post!
Week 105 of my contest just started...you can now check the winners of the previous week!

HBD = shitcoin

I see not a single adavatage to other stablecoins. Not a single one.

Sure free transactions are super cool, but thats hive and not necessary HBD.

Smart contract, get other stable coins in = better.

Hive is way to complex with all that shit.

Sure free transactions are super cool, but thats hive and not necessary HBD

Well it's both. It IS an advantage of HBD over other stablecoins unless they have some way to do free transactions.

Moar features I want for it!


With use cases being built for HBD, is that taking over the role of Hive Engine?

Hive-Engine is a side chain that provides smart contract capabilities. This is what allows for token creation.

The use cases tied to HBD are not really a threat to that from what I can see. There are, however, other projects being worked on that will provide the smart contract ability.

That is going to give HE some "competition" if you will.

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I wonder if both conversion fees should be settable by witnesses within a hard-coded range. The range itself could only be changed via hardfork, but the conversion fees HIVE <-> HBD should be options that witnesses can change depending on market conditions within the hard-coded range.

An approach would be to relax (lower) the HIVE -> HBD conversion fee during a bear market and tighten it (increase) during the bull market. For HBD -> HIVE, the conversion fee would be relaxed during the bull market and tightened during the bear market. Tightening (higher fees) should be correlated with market dynamics and relaxing (lower fees) should be inversely correlated. Hopefully, I'm making sense!

What you are proposing, a 25% conversion fee on HBD -> HIVE is definitely too high under normal conditions, but it's an option if the blockchain is under attack. And witnesses can act quicker than a hardfork can be implemented, tested and nodes updated. And your proposal doesn't take into consideration a pump and dump attack in a bull market, while these settings being available for witnesses should be more flexible in all situations I can think of unless the governance is compromised. The stabilizer can only make a difference up to a point in both directions.

Also, think about this: the conversion mechanism is the blockchain's guarantee that HBD is 1$ worth of HIVE. If you add a 25% conversion fee to it (or any fee for that matter) then you de facto reduce the guarantee to 75c worth of HIVE. Probably why no fee at all was included on HBD -> HIVE conversion. But probably we should have an option, just not use it on HBD -> HIVE unless we are forced to.

What about selling HBD on the internal market for hive. Is there a fee for that?

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No. There are no fees tide to the internal market.

The fee mentioned here is only on conversion. The Internal Market doesnt change the make up of other HBD nor HIVE.

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ok, good. that's where I play when I play

Correct me if I am wrong, but when @blocktrades wrote about introducing the HBD to Hive conversion before the Hard Fork he talked about limiting it to only work above the haircut line, was this not implemented or is it in effect?


HBD->Hive conversion existed before the HF. This conversion is no longer a pegged conversion after the haircut line is reached (in other words, you get less than $1 of Hive for 1 HBD at the haircut level, this was also true for a long time. So protection against a death spiral has been around for a long time.

What was added in the HF was a conversion in the opposite direction (Hive->HBD). This conversion was created to enable Hive holders to prevent speculators from driving up the price of HBD too far above the peg value (because Hive holders can create new HBD for just $1 and sell it for a profit if HBD goes above 1.05). And we've since seen that this new mechanism was very effective at preventing a big upside move of HBD.

HBD->Hive conversion existed before the HF.

I must have confused them.

you get less than $1 of Hive for 1 HBD at the haircut level

That is great to hear, and also means that we are already protected from the scenario that @taskmaster4450 talked about.

Thanks a lot for all clarifications.


@blocktrades! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @flaxz. (8/20)

The tip has been paid for by the We Are Alive Tribe through the earnings on @alive.chat, feel free to swing by our daily chat any time you want.

@taskmaster4450! You Are Alive so I just staked 0.1 $ALIVE to your account on behalf of @flaxz.ctp. (1/20)

The tip has been paid for by the We Are Alive Tribe through the earnings on @alive.chat, feel free to swing by our daily chat any time you want.

Hi task, I'm a regular reader of your posts and I admit that the question of how to prevent HBD from killing Hive has been bothering me for weeks, even before the moon crashed into terra, if I may be allowed this sad joke.

It's a very complex problem, but after a lot of thought I came up with the following ideas, although I don't know if they are feasible.

  • If a HBD person seeks liquidity after increasing his savings... HBD at that moment is worth $1, person A wants to sell $1000. A swap with stable foreign currencies is enabled. That is, the person will exchange 1000 HBD for 1000 BUSD. The cleanest way without affecting the 1 - 1 relationship against the dollar is to burn the 1000 HBD immediately afterwards. Could we contractually avoid the purchase of HBD in these networks so that we would have full control of the peg?

  • It seems to me vital, once the above mechanism is successfully developed in several networks to hinder with that 25%, or with 50% or directly eliminate the hbd conversion mechanism -----> hive, which is the one that would cause an increase in the supply of Hive disastrously in attacks on our currency. If the person gets his liquidity through a swap with another foreign stable and wants to convert to hive, he has no choice but to buy hive, which would cause an increase in the price of hive, i.e. the opposite effect!

  • The conversion mechanism hive ----> hbd would remain intact, as it would also help in this case to burn and shortage of hive, with the consequent price increase.

I have been studying the case for weeks because it seems to me to be the cornerstone of our whole system. That stone could crush us, or we could use it to our advantage. If we add these strong external stable currencies, we add to the confidence generated by our ecosystem the confidence of these strong currencies. If we lean on a giant, we can see further.


I think there should be a fee but 25% seems a little excessive to me. I think 5% is enough to keep the price within 5 cents from the peg. However, I think a lot of people are still using HBD -> Hive conversion so would this happen after a hard fork?

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I was shocked by what happened to the blockchain TERRA. If I am not mistaken TERRA is a DPOS blockchain like HIVE and that scares me. I don't know the technical details but most likely TERRA and HIVE have few things in common. I think this TERRA crash should become an incentive to improve and protect HBD, even though HBD has always performed well so far.

the amount of things i learn from you is incredible

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What about having a variable conversion fee. Where it increases with the amount converted. Or it increases with each conversion and the total amount one converted within a given time. And maybe it recovers to lower levels with time. Sort of similar to the voting power one has. Or based on the toal amount converted by the complete ecosystem in 24 hours.

Having it variable would make it very flexible yet safe when designed properly.

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btcmyk and bbd coin look better everyday

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LOL they are even bigger shitcoins than lassecash, that says a lot.

and what is luna? nah bbd coin market value like probably a million times higher than luna and lassecash lol now i know you full of shit

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bbd and btcmyk makes lassecash look amazing and lassecash is the biggest shitcoin I know.

I think you're a strange person. I'm not sure why you'd think it's a bad idea to have an easy ui with a wallet so people can onboard easily and the vote system be intuitive based on what they do. i don't do that the system gives btcmyk or bbd coin for your activity and so far over 18,000 people have registered although they use it more like a currency and not for blogging.. the market orders in bbd coin are not my market orders.. i'm not selling any and others putting up buy orders so hive is full of strange weirdos like you which is why i'm glad we're multichain and will have many communities others can use..i just jive with the free transactions on hive i think all your other apps are shitty and never will a significant amount of people use it

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Gets serious" i got a pulse warchest. i can break you m8!

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LOL, your war chest is probably my transaction fees.