The haircut goes into effect when the USD value of HBD reaches 10% of the USD value of HIVE. These are total market caps.
We will see this raised the next hard fork to 30%. The only thing the interest does is generate more HBD. If the price of HIVE stays the same, we have plenty of room. The problem could be if the price of HIVE drops, a great deal. If that happens, the HBD is not printed so 50/50 payouts will be in liquid HIVE until the ratio is restored.
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that i think i understand maybe :) what i was thinking and i think i remember it was talked about after the drop of steem from 4 to 0.2 was that there were some that had a good amount of SBD and they converted it to steem. so it was an "instant" boos of inflation for steem.
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The challenge there was that SBD got way out of whack compared to the supposed peg. So things were all over the place.
With HBD we are seeing the HBD stabilizer keeping it pegged closely. So that means the only real variable is the movement in the price of Hive.
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