I read an [article on CoinTelegraph](https://cointelegraph.com/news/new-cardano-algorithmic-stablecoin-evokes-old-fears-for-the-community) about a new algorithmic stablecoin. It got me to thinking about HBD...wondering how it works. I wrote what's below, am I right? <center> https://images.hive.blog/300x300/https://files.peakd.com/file/peakd-hive/crrdlx/242DhWjFWftfJTGa7WRjgSc62dMrYTqWQxhNkUSURXx9N4gbLvWDDgjfy2HbdA2oxgH5v.jpg </center> #### How HBD works HBD is an algorithmic stablecoin. This means that it is pegged to one U.S. dollar by normal market forces and automated smart contracts. One way that HBD remains pegged to the dollar is via normal market incentives of arbitrage (switching between HIVE and HBD) - HIVE-to-HBD - When HBD is above $1, there is an incentive to change one's HIVE into HBD and earn a small gain. This switch increases the supply of HBD and should thus reduce the value of HBD down closer to $1. - HBD-to-HIVE - When HBD is below $1, there is an incentive to change's one's HBD into HIVE and earn a small gain. This switch decrease the supply of HBD and should thus increase the value of HBD up closer to $1. A second way that HBD remains pegged to $1 is through the HBD Stabilizer. There have been times when HBD has become βunpeggedβ (it is widely away from the $1 peg). To help draw it back near $1, Hive developers set up the HBD Stabilizer. It is an automatic smart contract with funds provided by the Decentralized Hive Fund (DHF). The HBD Stabilizer automatically makes trades when the HBD price strays from $1. - When HBD is above $1, the HBD Stabilizer automatically sells HBD. Normal market forces of selling puts downward pressure on the HBD price. - When HBD is below $1, the HBD Stabilizer automically buys HBD. Normal market forces of buying puts upward pressure on the HBD price. A third mechanism in place to help keep HBD near $1 is the so-called Haircut Rule. >Haven't had time to dig into the Haircut Rule yet.
author | crrdlx |
---|---|
permlink | how-hbd-works-am-i-right |
category | hive |
json_metadata | "{"app":"peakd/2022.11.2","format":"markdown","description":"Trying to figure out for myself and convey how HBD works.","tags":["hive","hbd","stablecoins","finance","crypto","cryptocurrency","leofinance"],"users":[],"image":["https://images.hive.blog/300x300/https://files.peakd.com/file/peakd-hive/crrdlx/242DhWjFWftfJTGa7WRjgSc62dMrYTqWQxhNkUSURXx9N4gbLvWDDgjfy2HbdA2oxgH5v.jpg"]}" |
created | 2022-12-02 18:20:21 |
last_update | 2022-12-02 18:20:21 |
depth | 0 |
children | 8 |
last_payout | 2022-12-09 18:20:21 |
cashout_time | 1969-12-31 23:59:59 |
total_payout_value | 0.444 HBD |
curator_payout_value | 0.427 HBD |
pending_payout_value | 0.000 HBD |
promoted | 0.000 HBD |
body_length | 1,976 |
author_reputation | 53,366,487,452,020 |
root_title | "How HBD works, am I right?" |
beneficiaries | [] |
max_accepted_payout | 1,000,000.000 HBD |
percent_hbd | 10,000 |
post_id | 118,795,877 |
net_rshares | 1,889,127,912,824 |
author_curate_reward | "" |
voter | weight | wgt% | rshares | pct | time |
---|---|---|---|---|---|
onealfa | 0 | 40,912,389,662 | 6.66% | ||
coininstant | 0 | 2,322,185,562 | 100% | ||
webdeals | 0 | 691,721,656 | 3% | ||
uwelang | 0 | 1,873,088,088 | 0.9% | ||
seckorama | 0 | 29,405,078,501 | 12.5% | ||
pouchon | 0 | 160,698,186,819 | 5% | ||
eliel | 0 | 12,488,938,569 | 5% | ||
scooter77 | 0 | 1,770,758,940 | 0.9% | ||
ew-and-patterns | 0 | 13,725,002,460 | 5% | ||
taliakerch | 0 | 108,040,750,009 | 85.6% | ||
adambarratt | 0 | 11,852,153,313 | 10% | ||
shebe | 0 | 687,349,310 | 8% | ||
bucipuci | 0 | 50,516,054,373 | 20% | ||
cranium | 0 | 2,488,753,685 | 10% | ||
prettysnake | 0 | 778,981,461 | 100% | ||
dobroman | 0 | 1,284,520,840 | 100% | ||
koment | 0 | 621,881,649 | 100% | ||
komentator | 0 | 502,737,909 | 100% | ||
rodent | 0 | 1,954,224,483 | 9% | ||
sd974201 | 0 | 1,388,870,008 | 3% | ||
gadrian | 0 | 31,397,542,513 | 5.5% | ||
andruto | 0 | 917,589,469 | 100% | ||
achim03 | 0 | 246,512,099,926 | 25% | ||
pixiepost | 0 | 10,671,419,349 | 10% | ||
setik-001 | 0 | 771,059,721 | 100% | ||
oakshieldholding | 0 | 1,236,309,946 | 10% | ||
khan.dayyanz | 0 | 4,587,791,238 | 5% | ||
jacuzzi | 0 | 4,271,459,278 | 2.5% | ||
mrsbozz | 0 | 13,969,530,631 | 60% | ||
apokruphos | 0 | 3,580,922,888 | 1% | ||
cryptofiloz | 0 | 42,933,249,003 | 25% | ||
happyvoter | 0 | 28,504,599,499 | 80% | ||
mybiel | 0 | 7,128,366,948 | 80% | ||
travelwritemoney | 0 | 12,378,245,812 | 22.2% | ||
onealfa.leo | 0 | 17,507,444,448 | 3% | ||
taskmaster4450le | 0 | 241,029,942,017 | 10% | ||
pouchon.tribes | 0 | 10,704,302,944 | 8% | ||
lnakuma | 0 | 3,246,246,964 | 10% | ||
cranum | 0 | 817,842,729 | 100% | ||
craniuma | 0 | 832,566,799 | 100% | ||
kingneptune | 0 | 1,719,737,922 | 12.5% | ||
kran1 | 0 | 623,656,811 | 100% | ||
kran2 | 0 | 626,075,154 | 100% | ||
kran3 | 0 | 614,517,917 | 100% | ||
kran4 | 0 | 764,422,484 | 100% | ||
kran5 | 0 | 764,517,217 | 100% | ||
kran6 | 0 | 778,722,146 | 100% | ||
kran8 | 0 | 770,437,819 | 100% | ||
kran9 | 0 | 770,406,628 | 100% | ||
kran10 | 0 | 623,453,956 | 100% | ||
craniums1 | 0 | 6,788,908,358 | 100% | ||
crabank | 0 | 146,770,787,619 | 100% | ||
kran11 | 0 | 571,311,474 | 100% | ||
kran12 | 0 | 572,509,979 | 100% | ||
kran13 | 0 | 570,413,229 | 100% | ||
kran14 | 0 | 570,568,417 | 100% | ||
kran15 | 0 | 571,176,156 | 100% | ||
kran16 | 0 | 570,417,996 | 100% | ||
kran17 | 0 | 571,729,919 | 100% | ||
kran18 | 0 | 575,576,828 | 100% | ||
kran19 | 0 | 576,869,166 | 100% | ||
kran20 | 0 | 537,016,418 | 100% | ||
kran21 | 0 | 569,092,430 | 100% | ||
kran22 | 0 | 569,125,686 | 100% | ||
kran23 | 0 | 569,067,970 | 100% | ||
kran24 | 0 | 569,154,520 | 100% | ||
kran25 | 0 | 568,478,027 | 100% | ||
eddie-earner | 0 | 553,334,185 | 10% | ||
leoline | 0 | 9,539,536,175 | 50% | ||
lbi-token | 0 | 27,545,928,214 | 10% | ||
godfather.ftw | 0 | 3,129,623,961 | 5% | ||
cranium.leo | 0 | 612,810,096 | 100% | ||
hykss.leo | 0 | 14,044,893,771 | 1.5% | ||
solymi | 0 | 9,819,728,842 | 12.5% | ||
liotes | 0 | 1,842,108,849 | 25% | ||
liotes.fund | 0 | 4,007,259,763 | 100% | ||
liotes.voter | 0 | 453,724,241,231 | 25% | ||
horstman5 | 0 | 999,711,967 | 25% | ||
alokkumar121.leo | 0 | 3,573,097,891 | 100% | ||
leoball | 0 | 557,141,399 | 10% | ||
princessbusayo | 0 | 7,286,370,912 | 41% | ||
nfter | 0 | 7,850,320,593 | 100% | ||
foreverhero | 0 | 4,544,207,638 | 100% | ||
artpromo | 0 | 929,822,662 | 100% | ||
kran26 | 0 | 618,935,794 | 100% | ||
kran27 | 0 | 619,031,023 | 100% | ||
kran28 | 0 | 618,980,426 | 100% | ||
kran29 | 0 | 618,873,203 | 100% | ||
kran32 | 0 | 765,189,741 | 100% | ||
kran33 | 0 | 765,127,104 | 100% | ||
kran34 | 0 | 765,155,969 | 100% | ||
kran35 | 0 | 764,101,951 | 100% | ||
kran37 | 0 | 769,978,972 | 100% | ||
kran39 | 0 | 765,131,753 | 100% | ||
kran40 | 0 | 765,085,069 | 100% | ||
kran41 | 0 | 765,090,242 | 100% | ||
kran42 | 0 | 764,961,427 | 100% | ||
kran44 | 0 | 765,091,979 | 100% | ||
kran45 | 0 | 620,098,921 | 100% | ||
kran47 | 0 | 764,958,137 | 100% | ||
kran48 | 0 | 764,994,892 | 100% | ||
kran50 | 0 | 764,995,933 | 100% | ||
krann | 0 | 765,068,357 | 100% | ||
hyun-soo | 0 | 504,467,503 | 5% | ||
gejzep | 0 | 10,810,487,216 | 5% | ||
helios.feeder | 0 | 3,673,235,688 | 100% | ||
ykretz.leo | 0 | 1,251,402,436 | 100% | ||
hannes-stoffel | 0 | 7,891,367,862 | 50.6% | ||
helios.dev | 0 | 3,475,651,412 | 100% |
HBD on the internal Market is values in 1$ of Hive, using external price oracles to set that is supposed to be to USD denominated Hive price. So HBD is 1$ of Hive, not one Dollar out of thin air. Iβm also struggling with the a smart contract assumption, the DHF is operating casual code.
author | manniman |
---|---|
permlink | re-crrdlx-rma3ru |
category | hive |
json_metadata | {"tags":["hive"],"app":"peakd/2022.11.2"} |
created | 2022-12-02 19:35:54 |
last_update | 2022-12-02 19:35:54 |
depth | 1 |
children | 4 |
last_payout | 2022-12-09 19:35:54 |
cashout_time | 1969-12-31 23:59:59 |
total_payout_value | 0.016 HBD |
curator_payout_value | 0.016 HBD |
pending_payout_value | 0.000 HBD |
promoted | 0.000 HBD |
body_length | 289 |
author_reputation | 78,497,888,894,033 |
root_title | "How HBD works, am I right?" |
beneficiaries | [] |
max_accepted_payout | 1,000,000.000 HBD |
percent_hbd | 10,000 |
post_id | 118,797,759 |
net_rshares | 69,861,473,039 |
author_curate_reward | "" |
voter | weight | wgt% | rshares | pct | time |
---|---|---|---|---|---|
crrdlx | 0 | 69,861,473,039 | 100% |
I understand the idea of using market incentives to lead to lower/higher supplies and then, as it should be, slowly driving pressure toward $1. I've just got more to think on regarding the haircut. !LUV<div><a href="https://engage.hivechain.app">![](https://i.imgur.com/XsrNmcl.png)</a></div>
author | crrdlx |
---|---|
permlink | re-1670014070038 |
category | hive |
json_metadata | {"app":"engage"} |
created | 2022-12-02 20:47:39 |
last_update | 2022-12-02 20:47:39 |
depth | 2 |
children | 3 |
last_payout | 2022-12-09 20:47:39 |
cashout_time | 1969-12-31 23:59:59 |
total_payout_value | 0.000 HBD |
curator_payout_value | 0.000 HBD |
pending_payout_value | 0.000 HBD |
promoted | 0.000 HBD |
body_length | 292 |
author_reputation | 53,366,487,452,020 |
root_title | "How HBD works, am I right?" |
beneficiaries | [] |
max_accepted_payout | 1,000,000.000 HBD |
percent_hbd | 10,000 |
post_id | 118,799,427 |
net_rshares | 0 |
@manniman, @crrdlx<sub>(2/4)</sub> sent you LUV. <a href="https://peakd.com/@luvshares/about" style="text-decoration:none"><img src="https://files.peakd.com/file/peakd-hive/crrdlx/AKU7oyCXxGwYyudB42kJ7JtoZ63bdeHvm4icoT9xdGNxA4i4BwudGyPvTQrEwPd.gif"></a> <a href="https://tribaldex.com/wallet/" style="text-decoration:none">wallet</a> | <a href="https://hive-engine.com/trade/LUV" style="text-decoration:none">market</a> | <a href="https://crrdlx.websavvy.work/" style="text-decoration:none">tools</a> | <a href="https://discord.gg/K5GvNhcPqR" style="text-decoration:none">discord</a> | <a href="https://peakd.com/c/hive-159259">community | <a href="https://ichthys.netlify.app" style="text-decoration:none"><>< daily</a> <br> <center><a href="https://crrdlx.websavvy.work/wiki" target="_blank"><img src="https://files.peakd.com/file/peakd-hive/crrdlx/23sxEPgMNuQ5YPsuGungJ25Dpd6BjwgUmNkFAGCNnsKABBpUPXuRVgahFnwuZm9Qnf8Eh.png"></a><br><a href="https://crrdlx.websavvy.work/wiki" target="_blank">HiveWiki</a></center> <br> <center><a href="https://peakd.com/nftforpeace/@hivebuzz/nft-for-peace" target="_blank"><img src="https://files.peakd.com/file/peakd-hive/luvshares/242henrWsje7ivLwY3jxy15af3LJqvUzEmrEKAViGAowE1XsPqkDUuQ6QnwYpVJUWKN7c.gif"></a><br><a href="https://peakd.com/nftforpeace/@hivebuzz/nft-for-peace" target="_blank">HiveBuzz.me NFT for Peace</a></center>
author | luvshares |
---|---|
permlink | re-re-1670014070038-20221202t204759z |
category | hive |
json_metadata | "{"app": "beem/0.24.26"}" |
created | 2022-12-02 20:48:00 |
last_update | 2022-12-02 20:48:00 |
depth | 3 |
children | 0 |
last_payout | 2022-12-09 20:48:00 |
cashout_time | 1969-12-31 23:59:59 |
total_payout_value | 0.000 HBD |
curator_payout_value | 0.000 HBD |
pending_payout_value | 0.000 HBD |
promoted | 0.000 HBD |
body_length | 1,379 |
author_reputation | 5,176,006,074,737 |
root_title | "How HBD works, am I right?" |
beneficiaries | [] |
max_accepted_payout | 1,000,000.000 HBD |
percent_hbd | 10,000 |
post_id | 118,799,442 |
net_rshares | 0 |
The Haircut ππΌ is devastating tool that prevents the inception of an out of control dept ratio. Itβs tricky and novel.
author | manniman |
---|---|
permlink | re-crrdlx-rmaa48 |
category | hive |
json_metadata | {"tags":["hive"],"app":"peakd/2022.11.2"} |
created | 2022-12-02 21:52:57 |
last_update | 2022-12-02 21:52:57 |
depth | 3 |
children | 1 |
last_payout | 2022-12-09 21:52:57 |
cashout_time | 1969-12-31 23:59:59 |
total_payout_value | 0.016 HBD |
curator_payout_value | 0.016 HBD |
pending_payout_value | 0.000 HBD |
promoted | 0.000 HBD |
body_length | 118 |
author_reputation | 78,497,888,894,033 |
root_title | "How HBD works, am I right?" |
beneficiaries | [] |
max_accepted_payout | 1,000,000.000 HBD |
percent_hbd | 10,000 |
post_id | 118,800,837 |
net_rshares | 69,449,745,516 |
author_curate_reward | "" |
voter | weight | wgt% | rshares | pct | time |
---|---|---|---|---|---|
crrdlx | 0 | 69,449,745,516 | 100% |
Plus, there is incentive for the community to stabilize the peg. If you can sell HBD when it is higher than $1 and buy it back when it is below $1, you have locked in a quick profit. You know that the price will always fluctuate.
author | travelwritemoney |
---|---|
permlink | re-crrdlx-2022124t10595963z |
category | hive |
json_metadata | {"tags":["hive","hbd","stablecoins","finance","crypto","cryptocurrency","leofinance"],"app":"ecency/3.0.29-vision","format":"markdown+html"} |
created | 2022-12-04 16:59:06 |
last_update | 2022-12-04 16:59:06 |
depth | 1 |
children | 2 |
last_payout | 2022-12-11 16:59:06 |
cashout_time | 1969-12-31 23:59:59 |
total_payout_value | 0.016 HBD |
curator_payout_value | 0.016 HBD |
pending_payout_value | 0.000 HBD |
promoted | 0.000 HBD |
body_length | 230 |
author_reputation | 25,156,379,909,375 |
root_title | "How HBD works, am I right?" |
beneficiaries | [] |
max_accepted_payout | 1,000,000.000 HBD |
percent_hbd | 10,000 |
post_id | 118,844,489 |
net_rshares | 71,505,744,759 |
author_curate_reward | "" |
voter | weight | wgt% | rshares | pct | time |
---|---|---|---|---|---|
crrdlx | 0 | 71,505,744,759 | 100% |
Absolutely. Incentives yield results. !LUV
author | crrdlx |
---|---|
permlink | re-travelwritemoney-rmdo84 |
category | hive |
json_metadata | {"tags":["hive"],"app":"peakd/2022.11.2"} |
created | 2022-12-04 17:50:27 |
last_update | 2022-12-04 17:50:27 |
depth | 2 |
children | 1 |
last_payout | 2022-12-11 17:50:27 |
cashout_time | 1969-12-31 23:59:59 |
total_payout_value | 0.000 HBD |
curator_payout_value | 0.000 HBD |
pending_payout_value | 0.000 HBD |
promoted | 0.000 HBD |
body_length | 43 |
author_reputation | 53,366,487,452,020 |
root_title | "How HBD works, am I right?" |
beneficiaries | [] |
max_accepted_payout | 1,000,000.000 HBD |
percent_hbd | 10,000 |
post_id | 118,846,033 |
net_rshares | 0 |
@travelwritemoney, @crrdlx<sub>(2/4)</sub> sent you LUV. <a href="https://peakd.com/@luvshares/about" style="text-decoration:none"><img src="https://files.peakd.com/file/peakd-hive/crrdlx/AKU7oyCXxGwYyudB42kJ7JtoZ63bdeHvm4icoT9xdGNxA4i4BwudGyPvTQrEwPd.gif"></a> <a href="https://tribaldex.com/wallet/" style="text-decoration:none">wallet</a> | <a href="https://hive-engine.com/trade/LUV" style="text-decoration:none">market</a> | <a href="https://crrdlx.websavvy.work/" style="text-decoration:none">tools</a> | <a href="https://discord.gg/K5GvNhcPqR" style="text-decoration:none">discord</a> | <a href="https://peakd.com/c/hive-159259">community | <a href="https://ichthys.netlify.app" style="text-decoration:none"><>< daily</a> <br> <center><a href="https://crrdlx.websavvy.work/wiki" target="_blank"><img src="https://files.peakd.com/file/peakd-hive/crrdlx/23sxEPgMNuQ5YPsuGungJ25Dpd6BjwgUmNkFAGCNnsKABBpUPXuRVgahFnwuZm9Qnf8Eh.png"></a><br><a href="https://crrdlx.websavvy.work/wiki" target="_blank">HiveWiki</a></center> <br> <center><a href="https://peakd.com/nftforpeace/@hivebuzz/nft-for-peace" target="_blank"><img src="https://files.peakd.com/file/peakd-hive/luvshares/242henrWsje7ivLwY3jxy15af3LJqvUzEmrEKAViGAowE1XsPqkDUuQ6QnwYpVJUWKN7c.gif"></a><br><a href="https://peakd.com/nftforpeace/@hivebuzz/nft-for-peace" target="_blank">HiveBuzz.me NFT for Peace</a></center>
author | luvshares |
---|---|
permlink | re-re-travelwritemoney-rmdo84-20221204t175052z |
category | hive |
json_metadata | "{"app": "beem/0.24.26"}" |
created | 2022-12-04 17:50:51 |
last_update | 2022-12-04 17:50:51 |
depth | 3 |
children | 0 |
last_payout | 2022-12-11 17:50:51 |
cashout_time | 1969-12-31 23:59:59 |
total_payout_value | 0.000 HBD |
curator_payout_value | 0.000 HBD |
pending_payout_value | 0.000 HBD |
promoted | 0.000 HBD |
body_length | 1,387 |
author_reputation | 5,176,006,074,737 |
root_title | "How HBD works, am I right?" |
beneficiaries | [] |
max_accepted_payout | 1,000,000.000 HBD |
percent_hbd | 10,000 |
post_id | 118,846,045 |
net_rshares | 0 |