RE: Request for comments: HBD stabilization DHF proposal

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RE: Request for comments: HBD stabilization DHF proposal

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ats-david in #hbd • 5 years ago

I gave this a little more thought after my initial response last night.

4 - If the price is below LOW, use the HBD to convert into HIVE (takes 3.5 days). Upon completion of the conversion, use the HIVE to buy HBD and send that back to the DHF

One of the reasons I would support this would be to limit the printing of HIVE, particularly through HBD conversions. After the conversion is run, instead of sending all HIVE back to the DAO, could a portion be nulled? This could push some value into HIVE rather than creating more inflationary pressure.

If this system is then combined with an HBD "DeFi" solution that's paying out yields for holding HBD (maybe only to those who hold HBD in their savings account), then both HBD and HIVE would gain tremendous value over where they are today. Yields earned from holding HBD would also help keep at least some downward pressure on HBD prices as holders sell off those returns, so there's a little less risk of runaway prices.

The interest on HBDs, if only paid to that amount held in savings, would also limit how much would be going to exchanges that hold the tokens. On the other hand, some exchanges may want to list HBD as a "DeFi" option where customers can essentially stake HBD on their exchanges for a share of the interest payments. This brings more visibility to Hive and additional listings/pairings would help with exposure to and liquidity for HBD, which is sorely needed.

5 years ago in #hbd by ats-david

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tuck-fheman 5 years ago

Bro, ever since you gave me that great tip on Cardano and then it went m00n, I'll believe whatever you say!

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smooth 5 years ago (edited)

I think sending back to the DAO is fine. If stakeholders want coins from the DAO burned, they can vote a burn proposal. As you say, it is essentially de-printed and out of circulation in any case.

Sending coins back to the DAO is not inflationary pressure. It is that PLUS payouts from the DAO getting voted which could be inflationary.

The reason I'm not a huge fan of automatically burning the rewards here is that it makes a vote for this proposal into a vote to stabilize HBD and also a vote to burn funds from the DAO. To me those ought to be separate.

If the DAO contractor doesn't do the converting, someone else will, and they won't burn the resulting HIVE either. At least the DAO contractor will send them back to the DAO, getting them out of direct circulation.

Finally, your suggestion as written wouldn't actually help the peg significantly. If the price of HDB is too low, you need to buy HBD on the market and/or remove HBD from public circulation, but your suggestion does neither. It takes HBD from the DAO and effectively burns that, which doesn't affect the circulation or market price in any direct way.

I actually agree with only paying interest on savings. It makes interest into a form of staking rewards (though the stake period is short, 3 days, it is not zero). And if that encouraged exchanges to put their HBD in savings (maybe paying out to customers as "staked" returns, maybe not) that would be a positive in terms of being protective against exchange hacks.

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cryptonfused 5 years ago

Instead of burning HBD from the DAO, wouldn't it be better to sort of recycle it into the daily reward pool thereby decreasing the amount of new Hive/HBD created by the blockchain.

Please note that I'm a bit rusty here. I've not really read in details the proposal so my suggestion could be a bit off but I will hope you are able to get the idea.

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smooth 5 years ago

There isn't any mechanism to access the reward pool.

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