RE: Why are all (mostly) proposals unfunded

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I don't believe those funds were put there for the intention of manipulating the market. Which is kind of what you all are doing here. You're kind of telling me that the HIVE price is scaling up because of money flowing into HBD so in a way it's being artificially propped up?

  • The funds in the DAO should be used for any project that is deemed worthy of funding by the hive stakeholders. I think that most stakeholders would agree that "fixing" the peg and (as a side effect) increasing the buy preasure for hive are worthy enough.

  • The concept of market manipulation doesn't apply here. There is excess demand for HBD hence the price of HBD being above the intrinsic value (if we can use such a term). As stakeholders we are doing what any rational participant would do in an open market (of any kind)...if the demand shifts the price the supply is increased to account for that.

  • There is no "artificial" price being created here. It is just a market opportunity that we are taking advantage of. If market participants cannot take those opportunities then who will?

...consider other options and pros and cons such as calculating the value of HIVE on payout and paying out the HIVE value to USD value.

I don't understand what you are proposing here. The rewards are based on the scheduled inflation rate and payed out according to the predefined distribution on the blockchain code (65% to posts, 15% as "interest" to stakeholders, 10% to the DAO and 10% to the witnesses). I don't see how the dollar value plays any role here. Unless if you are proposing to track the value of HBD and pay more of it when it's price goes above the peg and viceversa.

Now that I think about it I believe there is a witness parameter that can be modified but there maybe some long term risks by tampering with that.

May I also ask what do you mean when you say that we should "fix the backend" to stabilize the peg? The price of any asset is determined by market forces and not by "backends". I believe that perception plays a larger role when it comes to stablecoins...USDT is traded at one USD because people believe that it is backed by an equivalent amount of real USD. DAI is traded at one dollar because traders are confident that they can redeem it for 1 USD's worth of ETH (or the other assets that are used as collateral).

When traders see HBD on exchanges they don't see a stablecoin. The way the trading pairs are setup may play a big role in that perception.



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Thank you for the feedback on this. I don't know much in terms of the coding and how things are structured as I'm sure a majority of people who use Hive don't. But I believe it's always important to learn and understand how anything functions that you are a part of so again thank you for your time on this.

Is there no way to Peg HBD as $1 at all times based on collateral like other stable coins? Again not sure how that works. In terms of payouts I was referring to the proposal system which uses HBD per day. If HBD won't ever be stable then why use it? Why not pay out in HIVE from the pool and calculate what the $1 value to hive is each day on the payout to those projects? Thus removing HBD (most likely can't do this though since there's a good amount of capital behind HBD and it's been in the system since it's birth)

I don't know best, this is why I vote for proposals you all are the devs and know it better than me but it just doesn't make sense how we can't code HBD in a way to make it stable if that is in fact what we want it to do and be for payouts on proposals and dev work. Maybe I'm totally wrong and the HBD proposal funder is really the only solution it just seemed really odd to me to me that this was the "best" or only option.

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HBD works pretty decent when it goes below 1 dollar. The reason for that is that when the debt ratio is below 10% you can always convert it to ~one dollar's worth of hive. Under those conditions traders can buy them below the peg, then do a conversion and sell the hive for a profit. That creates buying preasure for HBD that brings the price back up.

There is no way to create new hbd on demand when the opposite happens. That is what is wrong with the pegging mechanism. It looks like that will finally be included in the code on the next hardfork. In the meantime the hbd stabilizer is basically converting hive to hbd but the demand is too high right now for it to be 100% effective but it's better than nothing.

image.png

Here you can see that HBD was tracking the value of one USD for most of last year. The moving averages ranged somewhere between 0.95 and 1.00 most of the time. It is not as good as other coins in my opinion due to the low marketcap and the lack of exchanges where you can arbitrage away the deviations.

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