Use Hive's Internal Exchange To Get HBD

in LeoFinance5 months ago

There is a liquidity crisis going on with the Hive Backed Dollar (HBD), or is there? Certainly with only a little over 9 million coins available, it is going to be tight. One of the reasons for the introduction of the pHBD liquidity pool is to get some liquidity. Considering the Witnesses recently increased the APR on any HBD in savings, availability is something of an issue.

Many have expressed the issue of trying to buy large amounts. However we break this down, with such a tight float, there is not an abundance of HBD in existence. It is one of the reasons why the increase in interest is sustainable. We need a lot more HBD.

That said, there is an area that we do see overlooked. Acquiring big amounts is a tedious task but it can be done.

It is also something to highlight since there is the potential to expand the amount of HBD floating out there by a great deal.

Hive's Internal Exchange

Hive has its own exchange. This is located through the

Hive.blog wallet / https://wallet.hive.blog/market
. Here we have HBD traded for HIVE and vice versa. Many will find there is some liquidity there to access HBD.

hiveexchange.png

As we can see the sell orders quickly get to over 1200 HBD. This is not a ton but it does mean liquidity exists. The sell order is there by, I am going to presume, HBD Stabilizer. That means if it is filled, another sell order will be placed.

When looking to buy hundreds of thousands of HBD, this could be a challenge. However, for amounts up in the thousands, it is there.

The question is how much can be acquired on a daily basis?

Fortunately, Smooth, the developer of HBD Stabilizer, offered some clarification.

hbdstabilizer.png

There we have it. We have roughly 160K HBD per day that is available through the HBD Stabilizer. There are funds that are in the Decentralized Hive Fund. Thus we can acquire thousands of HBD for 1% over the best sell price. As was pointed out, this sounds like a large premium but when one is looking at 20% or more, not a bad price to pay.

Plus, keep in mind, there are no exchange fees on Hive's Internal Exchange.

We have more good news regarding this.

hbdstabilizer.png

Here we see how the amount available each day will keep growing over time. That is beneficial because it is presumed that the use cases for HBD are going to keep expanding. As that happens, the demand should mirror that.

So there is a resource to get some more HBD into the hands of people. Of course, for this to happen, people need to head to the internal exchange and trade HIVE for HBD.


One note: this is different from the conversion mechanism. No HIVE is destroyed. This is trading. There will be the same number of HBD/HIVE as before. The difference is the HBD is being placed in the wallets of individuals and not in the DHF.


50/50 Payouts

We have another way to generate HBD that every single person on Hive can do. This is simply a way to access the reward pool to assist in the creation of HBD.

Set your Hive payouts to 50/50. This will generate half your rewards in HP with the other half coming in HBD. Even if you are not interested in holding HBD, the internal exchange can be accessed to acquire HIVE.

Certainly this process is a bit more tedious yet it does help the community. If we all do this, half the reward pool each day will be in HBD. From the looks of it, that could be another 50,000 HBD per day hitting the market.

hivepayout.png

Similar to the Hive Internal Exchange, this only works if people set their payouts to 50/50. If people receive their rewards in HP, this does not add to the float. It is something to keep in mind.

Decentralized Hive Fund

There is another factor here to consider.

The Decentralized Hive Fund presently looks like this.

decentralizedhivefund.png

You will notice there is 63 million HIVE in the account. This was the original ninja-minded stake that caused so much controversy over the years. When Hive was forked, it that was put into the DHF to help fund the expansion of the ecosystem. We see, with the HBD Stabilizer, how it is working to get HBD in people's hands.

The key about the DHF is that it pays out in HBD. Hence, the HIVE that is in there will eventually be converted to HBD. The DHF pays out a certain percentage each day. That means, as the price of HIVE increases, so does the value of the holdings in the DAO.

For example, right now the 63 million HIVE is worth about 67 million HBD. If the price of HIVE goes to $2, that would equate to 126 million HBD.

This is why the amount of HBD distributed will increase as the value of the Decentralized Hive Fund goes up. The amount available can keep growing, further helping the cause.

In closing, here is another example of a tool available for the members of Hive to use regarding HBD. Since it is in place, let us try to get some attention on it. Everyone can assist in this process, even if it is getting simply getting partial rewards paid out in HBD.

What are your thoughts? Were you aware of these options for getting more HBD into the open market?

Let us know in the comment section below.


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BTW I also made my own interface for the internal market at https://hive.ausbit.dev/market

There will be the same number of HBD/HIVE as before. The difference is the HBD is being placed in the wallets of individuals and not in the DHF.

This is sort of true, in that nothing changes at the moment of the trade. But the HBD being sold by the stabilizer comes from the DHF, where it counts toward the supply but not toward the debt ratio. The HIVE that the stabilizer accumulates selling HBD is sent back to DHF where it is converted into more HBD. So the net effect is an increase in HBD i.e. increase in supply, and decrease in HIVE (since the HIVE is destroyed when DHF converts it into HBD).

This is ultimately how the stabilizer "stabilizes" HBD (on the up side). When HBD is overvalued, it uses the DHF to create more, satisfying demand. The mechanism works similarly in reverse when HBD is undervalued.

If people want to increase HBD supply, they need to be willing to overvalue it a bit, so the stabilizer pushes back by creating more. The high APR offered (both on chain and from the liquidity pool) provides a motivation to overvalue it.

Thanks for further adding to this. I didnt elaborate enough since I was referring to getting it out in the open and in the float that is outside the DHF.

It is good that the Stabilizer keeps adding to the amount of HBD out there. This is a bit of a slow process but it does get things going in the proper direction.

If people want to increase HBD supply, they need to be willing to overvalue it a bit,

I like how you put this. It is important that many keep adding. Even the 1% on the stabilizer equates roughly to two weeks return when placed in savings.

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I like how you put this. It is important that many keep adding. Even the 1% on the stabilizer equates roughly to two weeks return when placed in savings.

Ultimately it is up to the investor to decide if that is worth it or to keep trying, likely with limited success, to scalp cheap HBD. Neither of us can force people to pay up, even though I think they are foolish if they don't.

I share here my discord's question: is it possible to implement the post rewards option at 100% HBD? This should produce more liquidity. then everyone can decide to convert it to HIVE or aim it in Savings or in the pHBD-USDC pool, for example.

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In a way you could use the service @reward.app, though keep in mind it takes a 1% fee and half will come in liquid Hive which you then have to trade into HBD and the other half of course in HBD.

It is certainly a great alternative, although the service does require a 1% commission. I will do a post to try to advertise it.

is it possible to implement the post rewards option at 100% HBD?

No that option doesnt exist. Part of the rewards are going to be in HP.

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cool, i had forgotten about this. Must need more coffee, working out how much it's costing to buy hbd on internal exchange seems confusing 😀

It does take a little bit to get use to.

It isnt the most liquid but you can add a few. I was able to purchase 70 HBD earlier today.

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Nice to see you back!

lol, never really left just spend most of my time in the splinterlands realm. Good to see ya. :)

I actually wasn’t aware of the stabilizer providing that much HBD daily at 1% premium. It’s not great but it is workable.

There still remains a few issues with that:

  1. If I didn’t even know that was there, how will outside whales figure it out
  2. AFAIK this only applies to buying HBD. So there is no off-ramp liquidity - this is one of the main things turning DeFi whales off from buying HBD

I would love to push this to the hive community though. There’s an opportunity now to buy a bunch of HBD and wrap it into pHBD to provide liquidity that can solve these issues

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AFAIK this only applies to buying HBD. So there is no off-ramp liquidity - this is one of the main things turning DeFi whales off from buying HBD

Off ramp liquidity comes from the conversion of HBD into HIVE. You can do this yourself (unlike the ability to create HBD at <5% premium, which is essentially a privilege of the stabilizer) using the 3.5 day conversion, or you can sell HBD at a small discount and the stabilizer will buy it and convert it.

As with the other direction, people using the pool don't need to know this. They just need to be willing to sell at a small discount and someone else can arb.

What is the thinking with the 5% premium for creating HBD?

I presume it is a security feature to deter manipulation especially since the HBD can be then converted to HIVE and be a threat to governance.

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I think deter manipulation but I suspect also just a desire to generate a profit for the blockchain in the event of large pumps (which it has done in the past). It mostly wasn't my idea, so I can't say 100%.

I think the idea of a spread is good but I would apply some of the fee in both directions and probably also reduce it.

I think most of us regular folks on Hive were clueless about exact details! We really need to have some place (docs, website...) to have all these important stats in 1 place. !PIZZA !LUV

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how will outside whales figure it out

They don't need to. Someone just needs to arb between the pool and the internal market.

I agree. It is the reason for the article. We have to make this stuff known.

This is another solution to aid in the effort. On its own, does not answer everything but it is a way to get some more HBD out there. Even if people get it into savings, that will produce some more HBD. We need to see that number go up a ton.

AFAIK this only applies to buying HBD. So there is no off-ramp liquidity

Only with HIVE and then moving to an external exchange. Again, not great but a workable options. This isnt the billion dollar solution but rather tens of thousands.

There is little doubt we need to get more flowing.

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At the end of the day I'm hoping we don't see HBD fly past that peg because that would be bad marketing if we're to sell HBD as a stablecoin. Nevertheless the 1% seems new to me, different from what pHBD is offering.

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Anyone can create unlimited HBD at 1.05 by converting HIVE. So any big pump in HBD past the peg not only results large amounts of HBD being created quickly, but in enormous HIVE demand, making HIVE deflationary and sending the price moonward. This has happened in the past, and may happen again.

This has happened in the past, and may happen again.

We can only hope. That would really open the doors.

Either way, there are a lot of pieces in place. Over time, we simply will see the amount of HBD keep increasing, especially with the attention it is now getting.

After being completely overlooked for so long, it is refreshing to see action being take surrounding it.

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It would be great if it did that. We would see a number of people be able to convert HIVE to HBD. That would end up producing more HBD. Hitting $1.10 for a little while would be of help.

But the HBD stabilizer is working on it.

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But the HBD stabilizer is working on it.

Would be great if we actually get that to happen, more stability will suggest we're doing the right thing.

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A lot of the stability, believe it or not, comes from us right here on chain. As long as we are solid with things and keep seeking to grow things, it will happen.

Unfortunately, time takes time.

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If everyone uses Hive's internal market to buy HBD, then the price of HBD will rise above $1. To maintain the peg the winesses will have to sell HBD for Hive...

Is this a cunning plan to force the witnesses to sell all their HBD to the community? :-)

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Witnesses don't even receive HBD (unlike regular payouts). All witness rewards are HP. To get HBD, witnesses would have to buy it like anyone else.

To maintain the peg the winesses will have to sell HBD for Hive...

The HBD Stabilizer is what brings the HBD price closer to the peg, not the Witnesses.

It is regularly buying and selling on the internal market.

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I didn't know HBD stabilizer sold HBD on the internal market. That's very good to know. I am planning on converting some Hive to HBD when and if Hive goes above $2 again. Anything below that and I feel like I'm wasting the Hive I've earned

That is the choice. Do you speculate on HIVE or convert to HBD. There is a lot betting on HIVE.

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Why not 100% HBD update. While HP there is 100% payment. this might be considered.

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I am not sure what that all would require. But it is a thought.

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Consensus among witnesses and a hard fork.

I would be ok with 100% HBD payouts but feel they should come with a fee - 1% burn to get your posts fully liquid. Thus, you get a (very) small bonus for accepting vested rewards instead of fully liquid.

Edited: doesn't appear to be active

You can already do exactly that with the @likwid service. Of course it is not built into the chain (and doesn't increase HBD supply) but from the end user perspective, same thing.

Doesn't look like it's active anymore, there's another service myself and @cardboard created which has that function as well that I mentioned in a comment here but yeah it doesn't increase HBD supply.

I prefer the 50/50 payout. Currently I have delegated to the curators so I am getting the hive but I need to work on the 50% payout for HBD. I listened to your advice and now saving the HBD on regular basis. I hope that it works out by the end of this year with some good nest egg in the process :)

Whatever you put in there is generating 20%. That is nothing to sneeze at.

It will be good to get things expanding. Unfortunately, it is a process.

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Once again this is a fantastic wealth of information. I just may do something with this 😉

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I have checked in peakd, it's set at 50/50. Didn't know about this until now. I also started buying Leo. After I write this comment, I shall buy some more !

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I'm doing my little bits of stuff and things to help out. It's definitely not much, but it gives me what I'm looking for at the moment, and I guess it, in some ways, help someone to get their hands on some HBD.

  • 50/50 Payouts.
  • Selling HBD for Hive.
  • Buying LEO for Hive.

Now, I just need to aim for more rewards in general so I can continue to buy LEO for my HBD rewards. lol

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If 10,000 people did a little bit each day, it would really help.

Perhaps even taking a few H-E rewards and converting them. It all adds up.

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That is correct. Everything adds up at the end of the day. I think people want to hold HBD in their savings since the interest rate increase though.

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I am not sure there is any increase in the amount in HBD. We will see what the numbers look like when @dalz brings them out. He is usually good about putting together oversight on that type of stuff.

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I was thinking how to get HBD with outside funds away from Hive.
I guess the picture is right in front of me.
Got to go back to Hive. Good riddance.
As long the amount is within reach, 1% will not hurt much.
At the end we are all earning.

!BEER

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HIVE is easier to get a hold of than HBD on the outside. So bring that on chain and then use the Internal Exchange. That will help things out a bit.

And with no transaction fees, this does help to offset the 1%.

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I know DHF control the market but never known that with 1% extra premium, you can get nice chunk of HBD.

I am focusing more on Hive to build my HP so I am always selling my HBD. I still take HBD as post payment as I want to keep some "liquid" money.

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We all have our priorities and it becomes a difficult one to pull off. Most of us want to add to both but only so many resources.

That is why we all just have to keep pushing what is important to us. Collectively we will be able to fill in the gaps.

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Putting enough HBD in savings is the goal now

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For some. There are others who are still trying to build their HP.

It is an endless battle with all the different options. But then, that is a very good thing.

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This post was indeed informative as i read through, i tried understanding every bit of it.

I recently found out about the 20% increase in hbd savings interest rate.

I never knew that setting tge payout option to 50% hbd 50%hp has an advantage to the blockchain or helping to get more hbd into the open market.

I would like to understand that part.

I've not been keeping up with these kind of information, hence i feel so clueless.

It's sounds good to know that there are other ways one can earn hbd.

So what you are saying is that, if more people set their reward payout to 100% hp, it won't help the open market ?

The point was made in terms of HBD. Since we are discussing the liquidity and access to HBD, more of it is needed. So by setting the rewards to 50/50, half of a person's reward is in HBD, thus on the open market. Someone could put it in savings for further HBD generation.

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Oh, okay, I think I'm getting it.
The essence is to enable more generations of HBD, right,?

Pardon my questions, and thanks for sharing the information again.

Certainly, the 50/50 payout for HBD/HIVE to create hello create more HBD in circulation didn't strike me but that's when learning comes to play.

Hopefully placing payouts at 50/50 would be embraced because more people are geared to raise their hive power.

This post needs to get out to more people in various communities to assist in creating more HBD because it would still reflect in a high price for HIVE which we all want.

Thank you. It is important to pass these ideas on to all. There are tools available so we have to utilize them.

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Knew about the internal market but already thought it to be a kind of hidden almost secret place. There's some ways to get there apart from hive.blog I think through peakD wallet and hive tasks but way less than most other stuff and it's hardly ever mentioned.

Didn't know about the specifics of how the DHF works and fills orders and for how much daily, interesting stuff.

I actually traded some 1k hive on the internal market when it spiked, as I was holding it for a purpose but didn't need it just yet. Allowed me to get some HBD from savings (at 12% at the time) and buy back into more hive when it dropped back down too.

It certainly can be used for trading. When the price HIVE of pumps, it is not a bad idea to lighten up.

Sharing with people some of the tools that are available on Hive is always a good idea. Many were not even aware that it exists.

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I wasn't really sure about the stablizer providing HBD out but it's nice to have options. It still requires quite a bit of time to get the HBD and it doesn't help when someone jumps in front of you to get that HBD as well.

I like the 50/50 payout structure and I prefer to move that HBD into the savings because it's a lot simplier. Rather than doing the math on PolyCUB, I just plan on watching in the Hive Wallet right now.

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There is nothing wrong with that. Putting HBD in savings is helping to grow it at the same time.

It all feeds into what we are trying to achieve. There is no one right approach. And it is hard to ignore that 20%, low risk return. It is a foundation for what many should be building.

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"not a bad price to pay"

It depends. I am still waiting for some 1000s HBD to buy. But at this low Hive price I am hesitant. If Hive jumps to, let´s say 1,2$ only - which could happen anytime - then to buy HBD now would have turned out costly.
My gut tells me rather to sell HBD at this low Hive prices and buy back later much cheaper once Hive is higher.

That is the challenge. What is one trying to do. If those are the only two options, then you are probably right with your gut.

However, if HIVE is being used as a pass through to get the HBD, from another currency, fiat or crypto, then it is a solid approach.

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thank you very much for this information it is very useful for us..


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This is good, the prospects of having an internal DEX platform which is decentralized. It comes with so many advantages and convenience to all users, just the user friendly in-built exchange feature on the https://atomicwallet.io/ application.

feeless is the big factor, i hate the idea of cexs leeching off my money even just in principle so lower liquidity is no big deal.

I think that something that should also be solved is the change from HIVE to HBD, I think it should be like in Terra, that you change LUNA to USt immediately, of course I know that there may be some development needed and the approval of the witnesses, but that would solve the liquidity quickly.

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Well, I'm not sure how I can take advantage of this opportunity because I'm still at my early stage on Hive and have very little Hive or HBD to take chances with.

Could I be missing something?

I read your article and it’s amazing .I just wanna know where it is possible to get HBD

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