In August this year, HBD was trading above 1$, and HIVE to HBD conversions were massive. There were days when 2M HIVE was sucked in and put into HBD, removing HIVE from circulation and making HIVE deflationary. 

However, the situation has changed now, HBD is trading below the peg and it is being converted to HIVE, creating additional HIVE in circulation. 

*A reminder that HIVE to HBD conversions were not available before the last on June 30, 2021. Before that only HBD to HIVE conversions were available, making the conversions one directional, basically constraining the supply of HBD, creating conditions for HBD to pump without removing HIVE from circulation, but then adding much more HIVE when the prices were down.*

This year this was fixed, enabling conversions in both directions and making HBD much better and the overall Hive ecosystem much better.

Let’s take a look at the numbers. 


![01.png](https://images.hive.blog/DQmUZDNyU2TM6yAXPDmh8BjVyba8jkQqf7yVD7RxyLKjfUJ/01.png)



At the moment of writing this according to https://hiveblocks.com/, there is around 365M HIVE, 17M HBD in circulation, (excluding the 7.1M HBD in the DHF), and a debt ratio around 5.3%. 


# HBD To HIVE Conversions
For context, first let’s take a look at the HBD to HIVE conversions in the last five years. 


![image011.png](https://images.hive.blog/DQma9kZNd9Xxpf66nzyBHoEKa7oh2TRMzbnmbZuHm9QjpEG/image011.png)


The above is the amount of HIVE created by year from HBD to HIVE conversions. We can see that the record high was in 2020 when a total of 23.5M HIVE was created from HBD conversions. 

Up until 2021, all the HIVE that was created from HBD conversions remained in circulation. Since the last HF and the ability to convert HIVE to HBD, the net HIVE conversions in 2021 are actually negative. As we can see from the chart a total of 16.5M HIVE was created from HBD to HIVE conversions, but at the same time a total of 24.7M HIVE was converted to HBD. Up until now in 2021 a total of 8M HIVE is removed from circulation due to conversions. 



### HBD To HIVE Conversion in 2021

If we zoom in 2021, we get this. 

![image001.png](https://images.hive.blog/DQmPAz8gEh4LBpMcUrv8mbY7ai5BYYt8tyNa4Y2djCGmVQ9/image001.png)
 


We can see that in the last month there is a lot of HBD converted to HIVE. This is because HBD is trading bellow the peg and HBD is converted to HIVE because the blockchain is always providing a 1$ price for the HBD in terms of HIVE. In theory you can profit if you buy HBD on the external markets at prices below the peg, convert it to HIVE and sell the HIVE at profit. 

Although most of the conversion are from the @hbdstabilizer account that is receiving funds from the DHF to peg the HBD on the internal market. When HBD is below 1$, the stabilizer receive funds in HBD, convert them to HIVE and then buys HBD on the internal market trying to push the price for HBD. If HBD is above 1$, then it will sell HBD. 

### HIVE Created From HBD Conversions in 2021

The previous chart was about the amount of HBD converted to HIVE, now here is the chart how much HIVE was created from those conversions in 2021. 

![image003.png](https://images.hive.blog/DQmXZsR5E5Nsc1dmW38GCs3LZ8xvNoujEUkNi7c7KM4USMb/image003.png) 


Here again we can see the increasing trend in the last month for HIVE created from HBD conversions. 

A total of 6.5M HIVE was created in October only from conversions, reaching a half a million HIVE per day on a few occasions. Even with amounts of additional HIVE created in October, the price of HIVE still performed quite well. 


# HIVE To HBD Conversions

Now let’s take a look at the recent addition where we can convert HIVE to HBD. 
Here is the chart.

 
![image005.png](https://images.hive.blog/DQma1QjK6xbzs9JTBYFJM5Kc5GD2F5mk9q5zMqWp1ArGTnJ/image005.png)


I have included the whole 2021 on the chart, but these types of conversions were technically possible only after June 30, 2021. 

We can see that the HIVE to HBD conversions were short and volatile. Most of them happened between August 15th and September 15th, resulting in significant amount of HIVE converted to HBD and removed from circulation. A total of 24.7M HIVE was converted to HBD in the period, on a few occasions 2M HIVE per day was converted to HBD. More than 14M HBD was created in the period. 

This was happening mostly because HBD was trading above 1$ mostly because of speculators on the Korean Upbit exchange and converting HIVE to HBD was profitable. 


# Top Accounts that Converted HBD To HIVE

Here are the top accounts that converted HBD to HIVE in October 2021.

![image015.png](https://images.hive.blog/DQmZnU3T3DEMeEa577p5xJsqjtSKeW52Zgm22wZe4jYYRv5/image015.png)
 

The @hbdstabilizer is dominant on the top with 3.3M HBD converted to HIVE in October 2021. As already mentioned, this account is working to peg HBD to 1$ on the internal DEX. @mika is on the second place with 370k HBD, @hyochan third with 320k HBD. These are accounts that trade HBD on Upbit. 




----

Because of the low liquidity and most of the HBD supply and trading volume on the Korean Upbit, HBD is often in the hands of speculators on Upbit. However since the introduction of the HIVE to HBD conversions and the @hbdstabilzer account, we have seen HBD trading in the range of 0.95$ to 1.2$ . Just a reminder that in the past these swings were much higher up to 8$ and down to 0.6. There has been improvement. 

I still personally believe that the Hive ecosystem can benefit a lot from HBD and in the long run, a stablecoin would trap value in the system making HIVE deflationary. HBD is better today than it was a year ago, but it still has a lot of room for improvement like increased liquidity, USD to HBD listings on big exchanges, better and faster conversions, etc … that should result in  more use cases and adoption.



All the best
@dalz


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