The problem is the conversion is too slow, it takes 3.5 days to convert Hive to HBD, this is an eternity for traders, in the meantime the price of both HIVE and HBD can change drastically. I think to improve the peg the conversion has to become faster via a hardfork.
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The conversion is instant in the sense that you get the HBD instantly.
The only part that is slow is the return of collateral.
You get 50% instantly but you have to pay a 5% fee and wait 3.5 days for the other half. That is too slow for serious day trading.
Correct this operation is not intended for day trading. The purpose is to obtain HBD to sell because you think that HBD will ultimately return to $1. If you are day trading, you don't really care about that, you might even buy HBD at $1.30 because you think it may tick up to $1.35 within the next hour or two. So these are two completely different goals and methods of trading.
Great answer!!