hbstabilizer: conversions added

in #hbdlast year (edited)

The original proposal for the HBD stabilizer included the following:

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

This was not originally implemented, and has now been added, with a small modification. Rather than committing to use HIVE to buy HBD, the decision will be made at the time the conversion completes. If the market price of HBD at that time is above $1, the HIVE will be sent to the DAO instead (which performs an automatic conversion assuming HBD=$1).

Because there is some risk of conversion not resulting in a profit (due to market fluctuations during the 3.5 day period), LOW has been set to 0.97. This provides some safety margin.

100% beneficiary to @hbdstabilizer

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A raging yes from me! If stabilizer can keep the price close to $1 it should be able to keep it above 95 cents as well. At 95 cents you've already given up that 5% interest you've been working toward! Thanks for implementing!

Yes that was part of my motivation. It seems like supporting the price when it sags might ultimately help increase demand for HBD as a yield asset, for exactly the reason you stated.

Is it running now this new conversion, or it will be included on the upcoming HF25?

It is running now. The @hbdstablizer bot runs as an application, doesn't depend on the hard fork.

♥️🇵🇭♥️
Thank you for this development.

If the Hive Dollars (HBD) is below $1 USD, then buying it with Hive is probably a good and safe investment, because it will eventually go up to $1 USD. Currently it is $0.9585 USD. This means that if I would buy Hive Dollars (HBD) now, then I would win $0.0415 USD on each Hive Dollar (HBD) I would buy now. This would mean $4.15 USD with 100 Hive Dollars (HBD).

What do you think about this? What do you suggest to those, who are looking for good and safe cryptocurrencies investments?

You'd essentially be acting as a market maker. You can expect that others will convert at such prices, eventually bringing the price back to $1 or above.

It is not without risk.

  1. If Not enough other participants are doing conversions, the price could remain low. You could be forced to sell low or do the conversion yourself (with the associated risks).
  2. There is also the risk that you hold until HBD goes into haircut, when you don't get a full $1 per HBD. This risk should be seen as an unlikely outcome, but you could lose pretty much all the purchasing power potentially.

Buying to speculate and buying to convert both can make sense when HBD is below $1. @demotruk describes some of the risks. Also to consider is that you can earn interest (on all HBD currently, on savings after the upcoming HF25). If you buy at 0.95 and the nominal interest is 7% (as it is currently), you are actually earning 7.4% (assuming the price does go back up to $1).

If the market price of HBD at that time is above $1, the HIVE will be sent to the DAO instead

Why not accumulate some hive in the account.... like a buffer ....

It will do that now, as it's not returning the Hive unless HBD price is above $1.

I don't think it needs to be more than that, as the more Hive/HBD the account accumulates, the more attractive it is to hack/steal. It isn't a trustless system until more is done on the consensus level.

Yea I was thinking some amounts bellow 100k or something ... to be able to push the market ....

You don't need anything like that to be able to push the HBD market. And as the DAO grows, we will probably have larger proposals for the stabilizer, reducing the need for a buffer.

I'd be in favour of a buffer if the system were more trustless. Otherwise a buffer = honeypot.

Seems like adding both credit risk and price speculation to the DAO. Not really the intent here.

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great!

Thanks for your development

Upvoted because I think this is a good thing for the whole platform.

Yeet!

I think this should be after the HF a job for the community. But why not :)

I really don't understand how you decide what to downvote...

I've had a couple posts this week that got way bigger than normal payouts (newsflash votes), and very little conversation or anything...

Then yesterday's post gets more interaction than anything I've posted in months (and most things on trending), is less than half the payouts of those others, and you give it a downvote that removes more than 50% of the payout :-/

If I happen to see something and think its overpaid I will downvote (also plagiarism or such but that's not the case with yours to my knowledge). I'm not a fully time curator so don't expect consistency. I miss a lot.

The engagement he's talking about was actually people engaging with a comment I left there... Just sayin'

Your post didn't get engagement (very little, like usual). The TWO WORDS I left there in the form of a question is what got engagement. My post, under your post, is what people were talking about. That engagement exists because of the conversation I started. You can't take credit for that.

Awesome. Thank you