RE: HBD is demonstrating its potential against UST as an algorithmic currency.
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Yes, it would get burned. You can read more about it here. Nothing is set in stone but I think it's good to protect the network.
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Wouldn't this fee affect the peg since you are effectively trading HBD to $0.95 worth of it?
It's more of a protection mechanism and you can still get $1 worth of Hive off of the internal market for no fees. The conversion mechanism isn't the only way to turn HBD into Hive.
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The point is that the internal market would also be selling hbd for $0.95. Nothing says that the internal market is obligated to sell at $1 and since people can only convert 1hbd to 95c that's what they will sell it for.
Well, it's possible but the HBD stabilizer is supposed to work on that end. At the same time, if it's 95 cents then arbitrage with the pHBD pool would also happen.
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All of this is as clear as mud to me. Gonna have to figure this out soon :-)
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Well, I think all you need to know is that Hive is different from Terra and there are some safeguards put in place. The conversion isn't instant for the first difference.
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