A few things pertaining to this:
The HBD stabilizer is always at work so it is out there working to prevent such as massive drop. As the selling begins, it is buying, an increasing amount with each leg down.
The haircut limit is still in place meaning there is only so much that can be redeemed.
We have a lot of whales who are now watching this situation. If there was a lot of dumping, they could help to reverse the selloff by jumping in and picking up some cheap
This situation is looking at HBD through the limited lens. It is natural since we do not have use cases. That is why development of commerce surrounding HBD (utility) is crucial. In that area, people will have less incentive to use the conversion mechanism because they will not care.
Here is where time locked vaults really come into play. When taking our yield seekers and giving them incentive to lock up HBD, the threat of conversion is reduced.
Finally, as more non Hive people enter, most are not going to know or care about the conversion mechanism. They are looking for the 20%. So, if they decide to exit, they will do so through exchanges and LPs. The conversion feature will used, for the most part, by big players. This is what some of the security features are meant to impeded.
By the way, do not be surprised to see a fee similar to the one on the upside proposed for conversions. This would help deter the ability to manipulate on the downside too.
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