I think the idea that 3% interest would drive the price of HBD to $3 is completely nonsensical. It's not even been advertised much, except to a small extent on Hive sites themselves, so even if 3% was somehow a super attractive rate (it's not), I think you will find that many current buyers don't even know it pays interest.
I'm also very tired of the argument that HBD can't be pegged. It's also a ridiculous argument, in my opinion. There's been no strong effort to make the peg work since it was created. The only attempt I can even think of was the hbdpotato effort, and it never looked like it would be strong enough to do too much.
Also, I know for a fact that you can create a peg just by market activity alone. That's basically how USDT works now.
But we're trying for something a little more interesting: a trustless stablecoin. While it's not yet proven, I think we can setup all the mechanics to make it work.
For the rest, I felt smooth gave a fairly straightforward answer, so let's leave it there.
I think that interest being offered would certainly drive demand upwards a bit would it not? (assuming anyone outside our community even realizes it's yielding interest, as you stated)
Sure HBD can be pegged.. And has somewhat been pegged in the past, but the built in mechanisms within HIVE to perform this pegging leave much to be desired for lack of a better term. Not sure USDT is a great example as they print and burn tokens at a rate reminiscent of central banks (the printing part anyway).
The whole concept of HBD stabilizer is neat. I'm totally down with the idea..! But I'm not sure it should be at the expense of developers trying to make a living populating our network with use cases. Seems a touch counterproductive and may infer to potential developers in the future that happen to yield successful proposals that their funding is secondary to attempting to wrangle a pegged token price against a volatile market.
Partially playing devils advocate, partially expressing my observations. Either way I'm quite interested in the outcome of this and seeing if the attempt to stabilize HBD is going to play out as intended. Hope it does honestly else this was all fruitless. :/
Yes, a little. It's just that buying at $3 risks $2. If you hold a whole year (with no price change), you earn an extra $0.09. It would take 20 years for the potential upside of interest to match the potential downside of price drop to the peg). I don't think anyone cares about this much (assuming they even know about it, which is often questionable as @blocktrades stated).
Ah. Yeah when you put it that way it certainly seems like a -EV move.
Does one only get interest on HBD on Hive? Are we seeing inflows from the relatively few external places it trades?
I don't think so, but I don't know. Absent that I'm pretty sure nobody is buying $2 HBD looking for 3% in a year while there is so much talk of how to drag it back to $1.
You get interest on Hive Power as well. Not sure what is driving the market to be honest.
You may be right. sounds silly when you put it tthat way but I don't thinnk it's someone in the community buying up the price.
The exchanges earn the interest if the HBD is held on an exchange. In theory they can pay it to the users (or only do so if users put it into a staking pool or such) as they do for other coins, but no exchange currently pays interest to the users for HBD. The users would only earn interest if they withdraw from the exchange, which doesn't seem to happen a whole lot if one looks at the balances on exchanges (high and stable if not growing).
So this is another reason why hardly anyone if anyone is buying and pushing the price up due to interest.