RE: HBD | @dlux-io | Aureal | CubFinance
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With the Hbd thing... Seeing as it is only redeemable for 1 Usd of hive, just let it inflate. At the end, someone is going to be holding a vastly overvalued bag and it will unravel.
I do see many people still holding Hbd. It might be beyond the ability for most to sell in the internal market (not many external markets for Hbd) so they might not realise they can essentially 'double' their money in one transaction!
It might seem obvious to some of us... But this is a new world for many!
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It's not obvious to me. I only have a little bit and I just sit on it. I don't get the whole HBD thing at all. 😂
!ENGAGE 10
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Yep, I think if everyone used HBD like it was supposed to, it would would start to track the peg a bit better! It's not easy for most people to grasp at the moment.I'll try to explain, but I'm going to bed soon (preparing for a middle of the night IDO...).
HBD is redeemable for 1 USD of HIVE at whatever the market price is at that time (using the Convert HBD from your wallet). This is similar to how DAI maintains a peg by using redeemability with ETH, except DAI works better because people use it as it was supposed to!. So, if you "buy" HBD for 2 dollars, you are buying the right to redeem for 1 dollar!!! Makes no sense to do that... yet enough people are, and they will get a rude shock!
You can sell HBD for Hive on the internal market (click market from Hive or HBD, should send you to hivewallet). There, the relative prices of HBD and HIVE are pretty much priced in.
Making up numbers for example:
On external markets let's say HIVE~0.5 USD, and HBD is 2 dollars. On the internal market, you will be able to buy HIVE for around 0.25 HBD/HIVE, which nets you 2x the amount of HIVE that you would get compared to "conversion" (the redeeming of 1 HBD for 1 dollar of hive). You can then send that HIVE to an exchange of your choice and sell it for the "external" price of 0.5 USD/HIVE.
Or I think that Bittrex has a HBD/BTC listed, and then you can sell it directly at the inflated price.
Current example:
1 HBD converted (redeemed) for 1 dollar of HIVE would be around 1/0.724 = 1.(something) HIVE...
On the internal market, 1 HBD is 2.5(something) HIVE.
Of course, irrationality might still prevail and the peg will drift further... but at some point (hopefully...) people will start to realise that they are bagholders of a 1 dollar redemption!
Nice explanation!
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Great information @bengy
Thanks, I have fleshed it out into a proper post for today!
Leaving HBD to do what it wants could bring a crazy summer and dark winter. I like that it's trying to be controlled but the market will do what it wants :)
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Agreed, but we are missing the untapped potential of educating the users of the HIVE platform. We could also show people (or make it easier) how to sell HBD (or convert when the price is under 1 USD), as it was designed to do. In addition to the blunter tools that currently being employed. I have no numbers to be sure of this impact (you are the data guy!), but if people used HBD as it was intended (because it was easy to), then it should track the price a bit better!